Houston Defender: Financial Edition April 2015 by Defender Media Group |DefenderNetwork

FINANCIAL

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APRIL 23 | 2015 | DEFENDER

Special Edition

Benefits of

ownership You have the opportunity to create equity, stability. Owning your own home may be a great way to create equity for the future and provide stability and security for you and your family (provided you stay in it for a number of years and home prices remain relatively stable). You may have some tax benefits. You may be able to deduct the interest on your mortgage and property taxes. These tax savings may offset a portion of the cost of owning your home. Your monthly payments will remain stable. With fixed-rate mortgages, your monthly payment will stay the same for the entire period of the loan, making it easier to plan and budget – whereas rental rates rise over time. (Remember that if your real estate taxes or hazard insurance premiums go up, your escrow will go up – increasing your monthly payment.) You can create the home you want. You will have a place that is uniquely “yours” that you can customize, from paint colors to major remodeling projects. Source: Freddie Mac

Homeownership can

increase Black wealth NNPA News Service

Researchers studying the effects of public policy on the racial wealth gap estimate that the median wealth of Black households would rise 451 percent if Blacks owned homes at the same rates as whites. The report was released by the public policy group Demos and the Institute on Assets and Social Policy (IASP). “With policies that advance the rate of Black and Latino homeownership to the same rate as white households, Black median wealth would more than quadruple and Latino media wealth would more than triple,” said Catherine Ruetschlin, a senior policy analyst at Demos. According to the report, the median Black household had $7,113 in wealth holdings, compared to the median white household, which had $111,146 in wealth holdings. “Black households hold only 6 percent of the wealth owned by white households, which amounts to a total wealth gap of $104,033, and Latino households hold only

8 percent of the wealth owned by white households, a wealth gap of $102,798,” stated the report. “In other words, a typical white family owns $15.63 for every $1 owned by a typical Black family and $13.33 for every $1 owned by a typical Latino family.” Thomas Shapiro, the director at IASP, said that the racial wealth gap is one of the most critical issues facing the United States. He said home ownership can help. “Homeownership is the largest reservoir of wealth and financial stability that American families have,” Shapiro said. “It’s just that it is so inequitably distributed at this point in time in the value of wealth that it creates.” With the creation of the Federal Housing Administration in 1934, the United States government sanctioned lenders to use “redlining” to systematically deny Blacks access to that reservoir of wealth for decades. “While redlining was officially outlawed by the Fair Housing Act of 1968, its impact in the form of residential segregation patterns persists with households of color more likely to live in neighborhoods characterized by

“Homeownership is the largest reservoir of wealth and financial stability that American families have.”

higher poverty rates, lower home values, and a declining infrastructure compared to neighborhoods inhabited predominantly by white residents,” stated the report. “Discriminatory lending practices persist to this day. When households of color access mortgages, they are more often underwritten by higher interest rates,” the report continued. “We know that lower-income homeowners can afford homes, stay in their homes and not be subject to foreclosure, if they have safe, traditional mortgages,” said Tamara Draut, vice president of policy and research at Demos. “The defamation of wealth and the resulting foreclosures were really due to the aggressive marketing and selling of toxic mortgages to communities of color that directly put their homeownership status in danger.” In order to close the wealth gap, Ruetschlin said that policies that perpetuate differences in homeownership rates and returns should be changed. The report recommended stricter enforcement of housing anti-discrimination laws, authorizing Fannie Mae and Freddie Mac to make it easier for struggling homeowners to modify loans and lowering the cap on the mortgage interest tax deduction.

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FINANCIAL

DEFENDER | APRIL 23 | 2015

Table of Contents

Irregular income?

Manage money better

f you’re a solo entrepreneur, dealing with an inconsistent income is one of the hardest and most stressful aspects. One minute it’s a feast, next a famine, and it’s hard to predict which is coming next. While an unpredictable income might not ever go away, according to the SBA, there are ways you can better cope with the highs and lows. Keep personal and business finances separate. Maintaining a separate bank account for your personal expenses and business finances is essential. Not only does it make record keeping and tax preparation a lot easier, it also helps you manage and arrange your finances. If you have an online accounting system in place, you can also sync your business bank account with it and automatically import and track expense transactions, providing a dashboard view of your cash flow. Draw a salary. Once you have your business account set up, make a habit of drawing funds from it on a scheduled basis, much like claiming a salary. Perhaps once a week or twice a month, transfer funds into your checking account to pay your personal bills. How much you draw depends on your household budget, but a good rule of thumb is to calculate the bare minimum amount you need to pay off your personal expenses and other non-business obligations, like health insurance.

Set money aside for lean months. If you do land a windfall client, set aside the money in your savings account (not your personal checking account) so that you can draw on those funds to help tide you over (and alleviate stress) during lean months. You will pay your bills from your personal checking account, deposit payments from clients into your business account and use a separate savings account to deposit whatever’s left over after you’ve paid yourself a salary. Get an idea of your trending income. Predicting cash flow isn’t easy when you don’t know where your next client or project is coming from. However, historical analysis should give you some idea of what your average income is over 12-24 months and give you a better sense of the levels of income that you need to maintain moving forward. If your baseline income tracks lower than your personal budget, consider cutting expenses or finding new business.

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Safe mobile banking: Protect yourself

Prepaid debit card users lack protection

BB&T Bank

Mortgage options to meet your needs BBVA Compass Bank

A commitment to diversity and growth

4B 6B

Wells Fargo Bank

Steps to securing financial aid for college 8B Stop living paycheck to paycheck Capital One Bank

Ensure your children stay fiscally fit

10B 12B

Cadence Bank

Establish, maintain and protect good credit 14B Amegy Bank

Consider SBA lending for a loan

16B

Know the facts about life insurance

18B

JP Morgan Chase Bank

Digital banking transforms industry Allegiance Bank

19B

A focus on church lending

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Five spending tips for tax refunds

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Older adults beware of scam artists

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Message from the Publisher

Take control of your finances

o you feel like your finances are out of control? Are you tired of living from paycheck to paycheck? Then this special edition is for you. Once again, the Defender is pleased to provide our readers with information on something that affects us all – money. Whether you earn $20,000 a year or $200,000 a year, worrying about money is a terrible feeling, especially if you keeping asking yourself, “How will I make ends meet after paying my rent or my mortgage?” Or, “How can I get these creditors off my back?” Or, “Why can’t I save any money?”

In this edition, financial experts share their extensive knowledge. They talk about the signs that indicate you’re in trouble. They discuss the importance of home ownership. They give you tips on saving money. Also in this edition, you will find important information from our partners, who we would like to thank for their contributions and caring enough about educating our readers. They are: Allegiance Bank, Amegy Bank, BB&T Bank, BBVA Compass Bank, Cadence Bank, Capital One Bank, JP Morgan Chase Bank and Wells Fargo Bank. So make a vow to be fiscally fit, starting today. You and your family will be glad that you did.

Sonceria Messiah-Jiles

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FINANCIAL

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APRIL 23 | 2015 | DEFENDER

Safe mobile banking:

Protect yourself

sing a smartphone, tablet computer or other mobile device to manage your finances can be convenient and help you monitor your money from practically anywhere. At the same time, it’s important to take steps to protect your account information. Here are some tips from the Federal Deposit Insurance Corporation (FDIC). Be proactive in securing the mobile device. Depending on what security options are available on your device, create a “strong” password (consisting of unusual combinations of upper- and lower-case letters, numbers and symbols) or PIN (with random numbers instead of, say, 1234 or the last four digits of your Social Security number) and periodically change it. Never leave your mobile device unattended. And make sure you enable the “time-out” or “auto-lock” feature that secures your mobile device when it is left unused for a certain period of time. Be careful about where and how you conduct transactions. Don’t use an unsecured Wi-Fi net-

work, such as those found at coffee shops, because fraud artists might be able to access the information you are transmitting or viewing. Also, don’t send account numbers or other sensitive information through regular e-mails or text messages because those are not necessarily secure. Take additional precautions in case your

device is lost or stolen. Check with your wireless provider in advance to find out about features that enable you to remotely erase content or turn off access to your device or account if you lose your phone. Quickly contact your financial services providers to let them know about the loss or theft of your device. Research any app before downloading it. Just because the name of an app resembles the name of your bank — or of another company you’re familiar with — don’t assume that it is the official one of that bank or company. It could be a fraudulent app designed to trick users into believing that the service is legitimate. The best place to download an app is from the official website of the bank or company that you are doing business with or from a legitimate app store. Beware of unsolicited e-mails or text messages appearing to link to a financial institution’s website. Those could be “phishing” messages containing some sort of urgent request (such as a warning that you need to “verify” bank account or other personal information) or an amazing offer (one that is “too good to be true”) designed to lead you to a fake website controlled by thieves.

Prepaid card users lack protection NNPA News Service

From mortgages to checking accounts, credit cards and more, regulations for these products establish the “rules of the road” for consumers and creditors alike. Yet one financial product with growing popularity has no comparable consumer protection – prepaid cards. For example, if a consumer has an account with a bank or credit union, their monies are federally-insured by the FDIC up to $250,000. Even when employers use prepaid cards for payrolls or when government benefits are issued on these cards, consumer protections are lacking. With each card issuer also setting its fee schedule and assessments, multiple added costs for usage can widely vary. Fees can include some or all of the following typical transactions: ATM cash withdrawal, balance inquiry, bill payments, card cancellation, inactivity, monthly usage, replacement of lost or stolen cards, and overdraft fees. According to FDIC, the largest users of prepaid cards include 25 million unbanked consumers and an

additional 68 million who are underbanked, preferring these cards or other alternative financial services to traditional institutions. The term “unbanked” describes consumers who have no existing relationship with a traditional financial institution such as a bank or credit union. Unbanked and underbanked consumers are also disproportionately consumers of color – Black, Latino and Native American. The combination of growing prepaid usage and lack of financial regulation has caught the attention of the Consumer Financial Protection Bureau (CFPB). In remarks before a No-

vember 2014 field hearing, Richard Cordray, CFPB director, stated the agency’s concerns. “Many of these prepaid [card] consumers are living paycheck to paycheck, and are engaged in a constant battle to make ends meet,” Cordray said. “They are some of the most economically vulnerable among us, and most of them have no idea that the prepaid cards they choose to purchase are largely unregulated at the federal level and carry few if any protections under federal consumer financial law.” To remedy this regulatory gap, CFPB has proposed rules for prepaid cards that would increase the consistency and clarity around the product. Key requirements that CFPB is proposing include: • Provide public disclosure of applicable fees in a uniform format. • Provide better access to balances, customer service account transactions and other information. • Require basic protections from fraud for both prepaid cards and mobile versions. • Establish limits on overdraft fees on all prepaid cards.

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FINANCIAL

DEFENDER | APRIL 23 | 2015

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Addressing your mortgage needs By BB&T BANK

hether you are a firsttime homebuyer, a seasoned homeowner or somewhere in between, your needs are unique. Partnering with a dedicated and experienced mortgage lending professional from BB&T ensures you find the right loan to match your needs. You can trust BB&T to provide the most appropriate financing options, expert advice and superior client service to make the loan process flow smoothly. BB&T’s Home Mortgage vision is to be the best home Kathryn Jones-Hunter Marcus Doaks lender guided by integrity, fairness, Builders Association (GHBA). and caring enthusiasm. “Kathryn and BB&T are my go-to mortgage Your home is one of the most important inbankers,” said Nancy Furst, president of HAR.” vestments you can make, and our mortgage loan Kathryn is available, answers her phone immediprofessionals are committed to guiding you and ately, and is by far the most knowledgeable resihelping you close your loan efficiently. dential mortgage banker I have encountered in the Kathryn Jones-Hunter and Marcus Doaks are past 10 years. She knows her products, the market, two of our highly skilled mortgage officers with and understands the “fine-line” relationship for the proven track records of success in serving clients consumer between lenders and realtors.” in our Houston market. They are both actively BB&T Mortgage clients can access their acinvolved in the community and committed to counts from anywhere by secured Internet access providing home buying education and counseling to BBT.com. Another advantage of working with to consumers. BB&T is we typically retain the servicing of our BB&T is a proud member of Houston Assomortgages to allow clients the convenience of ciation of Realtors (HAR), National Association making payments through several different chanof Hispanic Real Estate Professionals – Houston nels including visiting our local BB&T financial (NAHREP Houston), Houston Black Real Estate centers. Association (HBREA) and the Greater Houston

BB&T is one of the largest financial services holding companies in the U.S. with $186.8 billion in assets and market capitalization of $28.0 billion, as of Dec. 31, 2014. Based in Winston-Salem, N.C., the company operates 1,880 financial centers in 12 states and Washington, D.C., and offers a full range of consumer and commercial banking, securities brokerage, asset management, mortgage and insurance products and services. BB&T Corporation has completed its acquisition of 41 branches in Texas from Citibank. These branches officially opened as BB&T on March 23, 2015 making BB&T the 14th largest bank in Texas with approximately 121 branches and $5.1 billion in deposits. “We are excited about the completion of this important transaction and look forward to making BB&T’s unique brand of client service even more accessible to our Texas clients and prospects,” said Chairman and Chief Executive Officer Kelly S. King. “The BB&T brand in Texas has grown dramatically in just a few years, and we are committed to the communities and clients in these markets. This transaction represents a strategically compelling addition to the 21 branches we acquired in June 2014.” Branch Banking and Trust Company, Member of FDIC. All loans subject to credit approval. Equal Housing Lender. © 2015, Branch Banking & Trust. All rights reserved.

Kathryn and Marcus welcome the opportunity to discuss BB&T’s financing options: Fixed-Rate Mortgages n Variety of fixed-rate loan terms available n Fixed payment for the life of the loan n Jumbo financing available Adjustable-Rate Mortgages (ARMs)

n Lower initial monthly payments for a specified

period n Annual and life-rate caps to limit interest rate movement n Jumbo financing available Veterans Administration (VA) Mortgages

Federal Housing Administration (FHA) Mortgages n Lower down payment requirements n Gift funds allowed n Not restricted to first-time homebuyers Low-Down-Payment and First-Time Homebuyer Mortgages n Little or no down payment required n Gift funds allowed n Down payment assistance allowed n Rural financing available

Construction-to-Permanent Mortgages n One loan covering the entire homebuilding process, from groundbreaking to housewarming n Only one set of closing costs n Jumbo financing available Physician Loan Program BB&T’s Physician Loan Program is designed for current medical intern/ residents/fellows and licensed physicians who have completed their residency or fellowship within the last 10 years.

n Available to active and retired military personnel

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APRIL 23 | 2015 | DEFENDER

Local Lenders. National Strength. For more than 140 years, BB&T’s local approach to banking has

BB&T Home Mortgages

kept us close to our clients and the communities we serve. Our

Fixed and Adjustable Rate

lenders understand the nuances of the local market, which helps

Jumbo

make buying a home a little easier. Experience the difference

FHA and VA

with a local lender backed by the resources of one of the nation’s

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largest financial institutions. BBT.com/Mortgage

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B A N K I N G

I N S U R A N C E

I N V E S T M E N T S

Branch Banking and Trust Company is a Member FDIC and an Equal Housing Lender. Loans are subject to credit approval. Only deposit products are FDIC insured. © 2015, Branch Banking and Trust Company. All rights reserved.

FINANCIAL

DEFENDER | APRIL 23 | 2015

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A commitment to

diversity and growth

By BBVA COMPASS

BVA Compass is ramping up its recruiting efforts in the Bayou City, using its reputation as an innovative company with global resources to draw top talent in the most ethnically diverse metropolitan area in the U.S. To court prospects, the bank is providing unique career opportunities and heavily recruiting mortgage banking officers so that it can better serve its diverse communities. “Attracting diverse mortgage talent is a top priority for the bank,” said Joe Perez, BBVA Compass diversity staff development officer. “We recognize and respect diversity of thought, and believe that varied backgrounds lead to unique ideas.” Recruitment is not limited to mortgage banking officers, however. Career opportunities also exist in: • Retail banking: Branch associate, sales and service advisor • Wealth management : Trust administrator • Commercial banking: Business banking officer, corporate relationship manager • Lending: Indirect loan processor • Financial sales: Financial sales advisor • Operations: Compliance analyst and business process analyst BBVA Compass also appeals to job seekers who are interested in working for a company that is part of a global enterprise. The bank is a subsidiary of BBVA, a global financial services group with a solid position in Spain, the largest financial institution in Mexico and leading franchises in South America. “Working with BBVA means developing your career in one of the most innovative companies in the financial sector,” said BBVA Compass Executive Director of Employment Services Carl Crosby. “We’re a bank that knows that the future is digital and wants to become the best there is. If you are a determined and results-oriented person, you can help us realize this goal.” BBVA Compass, BBVA Securities Inc., and BBVA S.A. New York Branch have a firm and unwavering policy to provide equal employment opportunity without regard to age, citizenship, color, disability, ethnic origin, gender, gender identity and expression, marital status, nationality, national origin, race, religion, sexual orientation, genetic predisposition, protected veteran status, or any other status or classification protected by federal, state or local law.

About BBVA Compass

• A Sunbelt-based financial institution that oper-

ates 672 branches, including 341 in Texas. • Fourth-largest bank in Texas. • Fourth-largest bank in Houston, with nearly 1,400 area employees. • Ranks among the top 25 largest U.S. commercial banks based on deposit market share.

Careers at BBVA Compass careers.bbva.com/compass Linkedin www.linkedin.com/company/bbva-compass Twitter - twitter.com/BBVACompassJobs

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Lending our support. At BBVA Compass, we believe smart mortgage lending helps build strong neighborhoods and communities. Weâ&#x20AC;&#x2122;re committed to helping more families achieve the dream of home ownership. 1-800-COMPASS â&#x20AC;˘ bbvacompass.com

Loans subject to program eligibility, collateral, underwriting and approval, including credit approval. BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group. Compass Bank, Member FDIC. Rev. 04/2015 / #2862

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FINANCIAL

DEFENDER | APRIL 23 | 2015

steps to securing financial aid for college

By CARY YATES Wells Fargo

any parents of high school students know that the future will very likely hold a college education for their child. But what is often uncertain is how they will pay for that education. The Bureau of Labor Statistics recently reported that 60 percent of high school graduates enroll in a college or university for advanced studies. The average price for a four-year degree at a state school during the 2012-13 year was $22,261. It was $43,289 for a private, four-year college, according to the College Board. With these kinds of prices, many families will need financial aid to help cover tuition and room and board costs. Financial aid comes in many different forms. Students can pursue Cary Yates, market growth & development manager, Wells scholarships, fellowships Fargo and grants, which typically don’t require any repayment. Once these options are exhausted, students can also pursue loans. When first reviewing the options for financial aid, it can be overwhelming for students and their parents to comprehend all the options and steps they might need to take to financially plan for college. Wells Fargo Education Financial Services created the Five Steps to Financial Aid video series featuring “Mr. Fellows” to help families navigate the steps to obtaining the needed funds to cover educational expenses beyond high school. These steps include:

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Fill out the FAFSA – This is the Free Application for Federal Student Aid, and is recommended for all students planning on pursing college, no matter their family income. It is used to determine a student’s eligibility not only for federal student loans, but for work-study aid and some grants. Estimate total cost – Colleges can provide students and their parents with an estimated cost for tuition, as well as room and board each year at the school.

Determine additional expenses – College is more than just class, studying and taking tests. Other expenses like car insurance, gas money, memberships to campus organizations and even paying for a spring break vacation might not be covered by scholarships, grants and fellowships. However, students should apply all financial aid – even scholarships that might not have stipulations of how the money is used – first to educational expenses.

Learn about financing options – Create a list of private loans available through your bank, as well as federal loan options. Compare available loan amounts, interest rates, if payments can be deferred until after the schooling is complete and loan term lengths.

Know deadlines – There are deadlines for submitting the FASFA and for most scholarships. Keep these deadlines on a calendar so nothing gets missed. View the videos at www.WellsFargo.com/fivesteps. Additional information about banking, credit, money management, financial assistance and financial matters connected with post-secondary education can be found at www.wellsfargo.com/collegesteps. Reviewing financial aid options early gives families a chance to best plan financial – and educational – options for their child.

Financial aid comes in many different forms. Students can pursue scholarships, fellowships and grants, which typically don’t require any repayment. Once these options are exhausted, students can also pursue loans.

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APRIL 23 | 2015 | DEFENDER

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“My teen is totally ready for the real world.” — Said no parent ever We can take care of that. Bring your teen to Teen Day.

We’ll show them how to save for the things they want and need, how bank accounts work, how to make the most of mobile banking, how to pay for college, and lots more. And we’ll answer all of their, and your, questions. It’s a great way to prepare your teen for the financial realities ahead, so bring your teens to the Wells Fargo location below. We look forward to meeting you.

Join us for Teen Day on Saturday, April 25, 2015. Visit your nearest Wells Fargo location to learn more.

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FINANCIAL

DEFENDER | APRIL 23 | 2015

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Start early

Ensuring fiscally fit children for life

By CAPITAL ONE BANK

apital One Bank is proud to support this special section of the Defender and, through it, provide information to help readers and their families learn and practice effective money management skills. Capital One Bank is committed to educating greater Houston residents, including the city’s youth, in different areas of financial literacy. By increasing their financial education, adults and children alike can have a better understanding of what it takes to stay fiscally fit. Recent studies have shown that teens are more interested in learning how to properly manage their personal finances than ever before. “We all want our children to be physically healthy, but we also want to ensure the vitality of their financial health and future,” says Laurie Vignaud, Senior Director, Community Development Banking, Capital One Bank. “At Capital One Bank, we believe that teaching and incorporating the values of financial literacy to students at an early age will lead to more children practicing smart budgeting, spending and savings habits as they grow up. “Providing individuals with money Laurie Vignaud, Senior Director, Community Development Banking, management tools and resources to help them Capital One Bank prepare and invest for the future is part of Capital One’s new $150 million Future Edge initiative, through which Capital One will collaborate with leading educational and community organizations across the country to address areas of critical need that impact individuals’ current and future ability to grow and prosper in the digital age.” Here are some tips from Capital One Bank to help parents educate their children about managing money effectively and help them achieve financial fitness now and in the future: Encourage your children to embrace the habit of saving. More often than not, high school students receive failing grades in financial literacy, leading to lower rates of savings and retirement planning as adults. From piggy banks to bank accounts, encouraging children to set a savings goal and work towards achieving that goal can not only help address this issue but can also be an invaluable lesson that youth carry with them for the rest of their lives. Help your children set their own financial goals. The earlier children start setting their own goals, the bet-

As part of Capital One Junior Achievement Finance Park, children get a unique, hands-on opportunity to learn about and practice implementing the process of creating and balancing a household budget.

ter off they’ll be in the long run. Focus on short-, midand long-term financial and life goals and discuss types of goals under each category (re: taking a vacation vs. buying a new car vs. getting married or pursuing advanced education). Work with your children to create a realistic budget. A realistic budget can serve as a roadmap for guiding your children to achieving all of their financial goals. As part of Capital One’s JA Finance Park, children get a unique, hands-on opportunity to learn about and practice implementing the process of creating and balancing a household budget. Capital One donated a permanent unit of the award-winning Finance Park to Junior Achievement of Southeast Texas in 2010. Capital One recently worked with Junior Achievement to redevelop the Finance Park program with a digital curriculum and technology. Emphasize the importance of establishing good credit. Despite most people owning both credit and debit cards, recent studies show that many young people do not understand the difference between the two or how their credit history will impact their future. Adding to this is the ever-rising cost of college, which makes learning about credit at an early age even more important. Children will carry these lessons through their young adulthood and utilize them as they manage the process of

paying off loans. Everyone can directly influence the success of our Houston-area schools’ economic and personal finance education programs. If your child’s local school does not offer a personal finance or economics course, reach out to your school district or government official to request these classes become a standard practice and funding be provided.

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Capital OneÂŽ works every day to give back to the communities where we live and work. Through programs that support financial literacy, education and affordable housing, we provide people the tools they need to succeed.

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FINANCIAL

DEFENDER | APRIL 23 | 2015

How to stop living

paycheck to paycheck Know the signs and misconceptions

The disadvantages

By MARILYN MARSHALL Defender

f you find yourself living from paycheck to paycheck, you are not alone. According to the Consumer Federation of America, 38 percent of American households are living on the edge financially. The good news is, there are ways to get in better financial shape regardless of your income. To gain insight into this pressing issue, the Defender asked three experts for advice: Algenita Davis, a visiting professor at the Jesse Jones School of Business at Texas Southern University and former banker and tax attorney; Lonnie Mathews, co-founder of Alliance Financial Ministries and author of the books “Spend Everything” and “Beating Debt & Building Wealth; and Sonya Troullier, senior vice president of Wealth Development Strategies and a financial planner and registered investment advisor.

Certain signs

Algenita Davis

Mathews, who cited statistics that say 70 percent of Americans live paycheck to paycheck, said Lonnie Mathews some people are actually unaware of their financial status. “On the surface, you would think that a person would realize when they are in this situation; however, in my years of teaching financial literacy, I have come to understand that sometimes you get use to a life of controlled chaos,” Mathews said. “Signs that you are headed down the wrong path can include feeling uneasy about your finances all the time, constantly borrowing money from friends and relatives to get by, not having any savings for emergencies, and the list goes on.” Sonya Troullier Troullier, who said as many as 75 percent of Americans might be living from paycheck to paycheck, also listed signs of living on the financial edge. “You absolutely have no money left over at the end of the month,” she said. “You are taking money from one account to another account to pay monthly bills. You are using credit cards consistently monthly to survive. You skip paying certain bills each month and tell yourself I will double up next month.” Davis said you’re also in trouble when, “the delay of a paycheck causes delay of bill payment or your savings/retirement accounts are dissolved to pay current bills.” She added that financial difficulties can even lead to “hostility toward family and friends, irrational behavior, desperate selling of assets, reluctance to tithe and a general bad attitude.”

Davis said living paycheck to paycheck has various negative effects. “One major disadvantage is the inability to handle unexpected expenses such as medical costs, house or car repairs,” she said. “Other disadvantages include increased use of credit and resulting credit costs, which can also impact credit scores, and the inability to save and prepare for retirement years.” Troullier listed other disadvantages. “You are illiquid with no emergency funds available,” she said. “When an emergency arises you may take money from investment vehicles, like your 401(k), and you will get penalized for early withdrawal at 10 percent and taxes are due. This money may cost you 30 to 40 percent to use.” She said another disadvantage is the lack of discretionary income left over for savings and investments. Both Troullier and Davis noted that stress related to finances can take a physical toll on a person. Troullier said in addition, “Financial issues are one of the major reasons why couples get divorced.” Mathews listed another drawback. “The disadvantage of living life this way is you are squandering the largest wealth building asset you have – your current income,” Mathews said. “During their working lifetime, most people will earn over 1 million dollars. The question is, how much of that million dollars will you have in the end?”

Will more money help?

Many people believe their financial problems will be solved if they earn more money. Troullier said that’s not automatically true. “Making more money will not decrease your chances of living paycheck to paycheck because no matter how much money you make, you must put parameters on your spending. The more one makes the more one spends,” Troullier said. Mathews agreed that earning more money isn’t always the answer. “There is an interesting phenomenon called Parkinson’s Law which states that your expenses rise to meet your income,” Mathews said. “If you have ever gotten a raise or paid off a debt, then, in theory, you should be financially better off. However, often times the extra money usually ends up getting absorbed by your bad financial habits and you never seem to get ahead.” Mathews said replacing bad habits with good habits is just one of the keys to becoming fiscally fit. “When it comes to being better off financially, it really boils down to making good financial decisions that lead you down a path to building wealth over time,” he said.

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y e n o m g n i g a n a Tips on m v in g t to sto p li If yo u wa n e h c ck, e c k to p ay fro m p ayc h e n it a D a p s fro m A lg S o nya h e re a re ti nd M ath ews a v is , Lo n n ie . K n ow Tro u ll ie r. r sp e n d in g • Tra c k yo u u o fy r ry p e n ny o w h e re eve s. get m o n ey g o e o n th ly b u d m a sh li b a • E st re yo u it . M a ke su a n d st ic k to d th ays/ c ati o n s, b ir in c lu d e va m e n t. d e n te rt a in n of h o li d ays a n ve a p o rt io sa y rl la u g e •R e. nt of yo u r in co m l a ss e ss m e a re a e k a •M a n d th e fi n a n c ia ll y re a u o y d. Set w h e re h ave c re ate u o y t a th g u id e h a b it s ia l g o a ls to c n a n fi ic re a li st io r. yo u r b e h a v debt u rs e lf o n a o y t u •P o u w il l a e l so th t y d o m n o ti re d u c ry fu n d s d is c re ti o n a h ave so m e e nts , so m a n d inve st li ze d . fo r sav in g s re can be a ls a o g r u o th at y u e a rn ss th a n yo • S p e n d le “N o,” lf e te ll yo u rs a n d le a rn to wo n ’t co n ti n u e to o, I su c h a s “N by ove rmy fu tu re je o p a rd ize it to sp e n d in g .” u se o f c re d • D e c re a se n o t c a p o st a n d im lowe r it s c of in co m e. r a m o u n ts • S ave m a jo

a s in o n ey su c h m d te c e p ve ra n ce, u n ex g m e n ts , se d ju s, e c n h e ri ta cco u nts / la ce in to a ly a cce se tc ., a n d p re n o t e a si a t a th s ie fa c il it in si b le. ti ve ways to in g • U se c re a rk o w s a m e, su c h c re a se in co extra jo b s.

n c ia l fro m a fi n a • G e t h e lp a l. sh o p o n p ro fe ss io n ss o r wo rk e • Ta k a c la e s. yo u r fi n a n c m a n a g in g a ke a c o m m d n a st e n o h yo u r • Be lf. In c lu d e e rs u o y to in th is m it m e n t ic a n t o th e r if n g si r o sp o u se exe rc is e.

Five lies to stop telling yourself FAMILY FEATURES

Americans have become accustomed to living a lifestyle accompanied by debt. According to the Federal Reserve, the total U.S. outstanding consumer debt was $3.33 trillion as of January 2015. This figure includes car loans, student loans and revolving debt, but not mortgages. “Sound and responsible financial management starts with facing the realities of our individual financial circumstances,” said Scott Smith, personal finance expert and president of CreditRepair.com. “Truthfully evaluating your income level, debt obligations, spending habits, savings habits and future financial goals will get you started on the right path to living a responsible financial life.” Smith recommends that consumers

he Houston area for over 80 years

stop telling themselves the following lies: “I don’t know what my credit score is, but that’s okay. I’ll only need it when I decide to buy my next car or finally purchase a new home.” It’s very important to know your credit score and responsibly manage it in every situation in life. Credit scores are not only used for securing a loan, but also for insurance pricing, job applications and rental agreements. “I’ll just take a little from my savings account, but I’ll pay it back next month.” Don’t borrow against yourself. Having an established savings plan is very important in every stage of life. If a circumstance comes up that demands you pull funds from your savings plan, make sure to get back on the savings train as quickly as possible. “Investing is too complicated and besides, only the rich get richer.” Most

of the time the “rich get richer” because of their discipline. Investing and saving is important for everyone, regardless of their current financial situation. “Maybe if I turn my voicemail off the debt collectors will stop calling.” Dealing with debt collectors can be very frustrating and sometimes even intimidating, but consumers have rights protecting them and debt collectors have laws that govern their ability to pester you. “I deserve a break. I’ll just charge my vacation and pay it back later.” Although circumstances sometimes arise that require the use of credit to cover unexpected expenses, those situations should be minimized as much as possible. If credit card debt is incurred, pay it off as soon as possible. The interest charged is a serious penalty and is not worth the instant gratification that a vacation or expensive pair of

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DEFENDER | APRIL 23 | 2015

Good credit:

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Establish, maintain and protect it from fraud

By CADENCE BANK

Credit is a necessary part of life for most people. From mortgages to car loans to credit cards, it’s common to borrow money to pay for the things you need. Your credit history is your financial track record. It shows your current level of debt and your access to credit, as well as your record for paying back loans and other debts. All of this information factors into your credit score – a number between 300 and 850 – that helps banks and other lenders determine what kind of borrower you will be. The higher your credit score, the better.

What can I do to improve my credit score?

Having good credit is essential. Fortunately, there are things that you can do to establish, improve or maintain a good credit score. • Have multiple credit cards, but don’t use them all. Your credit score looks at how much credit is available to you in relation to how much of that credit you’re using. It’s good to have credit available, but you don’t want to use a high percentage of it. • Pay off your credit cards every month. Carrying a balance not only costs you in interest, it increases your credit utilization, which can negatively affect your credit score. • Always pay your bills on time. Late payments can lower your credit score, and frequent late payments are a red flag for banks and other lenders. • The length of your credit history also is important. The longer you’ve had access to credit and used that credit responsibly, the better. Think twice before cancelling or closing an old credit card. Even if you don’t use it anymore, it could be helping your credit utilization ratio and adding valuable history to your overall credit picture. • Pay off credit cards first before making extra payments on installment loans. Not all credit is created equal. Credit cards affect your credit score differently than a mortgage or other installment loans. For example, having $600 in credit card debt can be a bigger issue than having $60,000 in student loans. Taking control of your credit history is the first step in securing your financial future. Once you have established a good credit history, you will be more likely to be approved for loans or lines of credit, and you may qualify for better interest rates.

How can I protect my good credit from fraud?

You’ve worked hard to build good credit, so it’s important to remain vigilant against threats that could impact your finances. Last year, fraud losses averaged more than $1,250 per person, according to a new study by Javelin Strategy and Research. Fraud can have a devastating effect on your financial situation, through both the risk of financial losses and by

negatively impacting your credit. Undetected fraudulent activity can lower your credit score, hurting your chances of getting approved for a loan. Fortunately, there are a number of ways you can help protect yourself and your family from identity fraud. • The most important thing you can do is monitor your bank and credit card accounts closely. View your accounts online, and check your account statements carefully for unauthorized transactions. • Review your credit reports at least once a year. You can order a free copy of your credit report at annualcreditreport.com.

• Keep your financial and personal information in a secure place and shred sensitive papers – including bank and credit card statements and tax documents – before throwing them away. • Do not respond to unsolicited phone calls, emails or text messages requesting your personal or financial information, even if they seem official. These are called phishing scams and are designed to trick you into sharing private information. Remember, financial institutions will never contact their customers to ask for personal or account information. • When online, always look for the “closed lock” icon on the status bar of your Internet browser. This means encryption is being used on the webpage you’re viewing and the information you transmit is secure. Also, make sure “https://” is listed at the beginning of each web address page. The “s” verifies the security of the site. Today’s fraudsters are clever and sophisticated. Know how to spot scams and what steps to take if you become a victim. You can learn more by visiting Cadence Bank’s Fraud Information Center at cadencebank.com.

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APRIL23 | 2015 | DEFENDER

MORTGAGE

The key to your dream home. Naturally, you want the best rate possible for your mortgage. That’s our goal, too. What’s more, as a full-service mortgage lender, we’ll work with you to make sure you have the best loan for your personal situation. Our loan products include: •Conventional Mortgages

•FHA Loans

•Jumbo Loans

•VA Loans

•Purchases

•USDA Rural Housing Loans

•Refinances

•Construction Loans

Call us today to learn more about the mortgage loan options available to you at Cadence. Dianna Davis

Fariba Khosravi

Trey Narendorf

NMLS# 235142

NMLS# 532056

NMLS# 760149

Mortgage Loan Originator

713-334-3135 dianna.davis@cadencebank.com

713-334-3133 fariba.khosravi@cadencebank.com

Visit Me Online diannadavis.cadencebank.com

Visit Me Online faribakhosravi.cadencebank.com

Mortgage Loan Originator 713-334-3124 trey.narendorf@cadencebank.com Visit Me Online treynarendorf.cadencebank.com

Dick Flynn

Mortgage Loan Originator NMLS# 417135

713-334-2267 dick.flynn@cadencebank.com Visit Me Online dickflynn.cadencebank.com

All loans are subject to credit approval. Loan terms and availability subject to change. Consult a Cadence Bank Loan Officer for complete details. Cadence Mortgage is a Division of Cadence Bank, N.A. NMLS# 525022

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DEFENDER | APRIL 23 | 2015

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Consider SBA lending for a

small business loan By JEVAUGHN STERLING Amegy Bank

hether they are starting a new business, expanding an existing one or simply need additional working capital, many business owners are utilizing credit to grow their businesses. There are several ways to structure financing, but one option that has grown in popularity in recent years is Small Business Administration (SBA) lending. The SBA is a government agency that supports small businesses through a variety of channels, such as contracting, counselling, disaster relief assistance and its most widely known resource, SBA loan programs. The SBA does not provide loans directly, but guarantees default against a specific portion of the Jevaughn Sterling, Senior Vice loans made by banks and President Amegy Bank Texas other lenders that follow SBA guidelines. Business owners are using SBA loans for a variety of purposes, including starting a new business, acquiring another business, refinancing, construction, as well as the purchasing of real estate, equipment and inventories. These loans are intended to assist businesses to acquire financing on terms that are not available under traditional loan programs. Two of the most popular types of SBA loans are the 504 and 7a programs, both of which can be used by small businesses. Money acquired through 504 loans must be used to promote a public policy goal and promote the sound existence of a small business. These loans may be used to purchase real estate, finance construction, or purchase equipment with the goal of helping the business to create jobs. Participating banks can fund up to 50 percent of the 504 project while SBA funds up to 40 percent. The SBA portion is subject to a $5.5 million cap, and will support a total project as large as $13.75 million. This results in eligible businesses obtaining favorable financing terms with as little as 10 percent down payment, and long term fixed interest rates that are indexed to the US Treasury market. Financing secured through 7a loans can be used for the same purposes as SBA 504 loans; however, 7a loans may also be used for working capital, to open lines of credit and in some cases, refinancing. These loans are tied to the prime interest rate which can be fixed, and loan amounts are usually capped at $5 million.

There are advantages to both loan programs, and selecting the right one for your business will depend on many factors, including how much collateral the owner has, how much money is needed and the purpose of the financing, to name a few. The SBA eligibility requirements must be met in order to qualify for the loan programs. Businesses must be organized for profit, meet U.S. small business size standard, be an eligible type of business, and demonstrate a need for the guaranty. Applicants that meet the SBA eligibility requirements can obtain loan terms from participating SBA Preferred, Certified lenders, and Small Business Lending Companies (SBLCs). Loan terms, amount of the loan, interest rate and credit approval will vary by institution. Preferred SBA lenders, like Amegy Bank, are most experienced and have delegated authority to approve, process, and service an SBA loan without prior SBA review. Preferred lenders perform a brief

eligibility review and obtain SBA guaranty approval within hours which favors the small business by simplifying the loan application process. When evaluating financing options, ask your banker if SBA loans are the right fit for your business. SBA loan programs make it easier for lenders to say yes. Jevaughn Sterling is a Senior Vice President at Amegy Bank of Texas. Throughout his 11-year career at Amegy Bank, he proactively develops relationships with privately held businesses to become a strategic partner in identifying and implementing effective capital structures. As SBA Department Manager, he and his team leverage the public private partnership with the U.S. Small Business Administration to provide capital to new and fast growing companies in Texas. The information contained herein is believed to be accurate but in no event should it be construed as legal advice. This information is subject to change from time to time. Please consult the Small Business Administration for further information. Amegy Bank financing options are subject to credit and bank approval requirements. Terms and conditions apply.

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The right loan to fit your business needs.

The right team to help you grow your business. At Amegy, our success is built on the relationships we keep. Our experienced SBA team makes every decision locally – offering you a more simplified loan process and a quicker turnaround.

PREFERRED SBA LENDER

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DEFENDER | APRIL 23 | 2015

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Know the facts about

life insurance

FAMILY FEATURES

ccording to a study done by LIMRA, a nonprofit life insurance industry research organization, as many as 40 percent of U.S. households would have immediate trouble meeting household expenses if a primary wage earner were to pass away today. The study also showed that a majority of Gen X and Y consumers believe they need more life insurance than they currently have. Yet according to LIMRA, 30 percent of Americans have no life insurance at all and more than half of those who do are inadequately covered. At every stage of life, life insurance is an important consideration for protecting your family and your assets. As much as you may not want to think about it, you cannot afford to avoid making these important preparations. Life insurance can be vital to helping your loved ones maintain their standard of living after your death. If you have dependents — a spouse, domestic partner, children and/or an aging parent — you should ensure that your retirement pension and savings are sufficient to secure their future. Many Americans think that they can’t afford life insurance, especially when some are struggling to balance the daily and monthly expenses that most households face. But life insurance is often more affordable than you might think. In fact, more than 80 percent of Americans overestimate the cost of life insurance. Most people who are uninsured believe that a 20-year, $250,000 term life policy for a healthy 30-year-old would cost $400 per year. But the real cost would actually be only a quarter of that, or about the same cost as your Netflix subscription each month. If you’re unsure about life insurance, you’re not alone. Many individuals are confused about how life insurance works. The truth is not all life insurance plans are created equally. In fact, there is a whole host of different types of life insurance to fit your budget, lifestyle and needs. One of the most common types is term life insurance, which offers affordable coverage for a specific number of years and is great if you want to provide coverage while you pay off certain debts or until you’ve fulfilled some anticipated responsibilities, such as until

Benefits offered Life insurance can provide an array of benefits to dependents such as: 1. Assistance in paying off debts such as a mortgage, auto loan or credit card 2. Coverage of daily living expenses 3. Help with saving for expenses such as college tuition, weddings or starting a business 4. Paying for funeral expenses your children are out of college. However, while term life insurance is an affordable way to get maximum coverage, it also increases in cost after the specified period, so it may not be cost effective in the long run. On the other hand, permanent life insurance policies are ones that do not expire. They protect your loved ones permanently. These plans typically offer more long-term security and may even accumulate cash value

over time. While permanent life insurance may initially cost more than term life insurance, they can also be more cost-effective in the long term. Depending on your responsibilities and financial situation, the best life insurance plan for you may be term insurance, permanent or one of the many other options offered by insurance companies. Many leading insurance companies are making it easier than ever to put life insurance within reach. And some companies have new products for Americans who otherwise might not have easy access to life insurance plans. In addition to expanding their coverage to include families who may traditionally be underinsured, major life insurance companies have also worked to develop tools, such as insurance premium calculators, that help you select the type of life insurance that is right for your needs and concerns. It may seem complicated and you may not want to think about it while you’re in the prime of your life, but life insurance is easier to obtain and less expensive than you might think. There are several helpful tools and information available to help you find sufficient means to provide security for your families and loved ones. Picking life insurance shouldn’t be a burden but an easy process. You should be able to enjoy the aging process and eliminate the unknown when it comes to life insurance.

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Digital banking transforms an industry

By CHASE BANK

oday’s customers expect to be able to transact with their bank whenever and wherever they choose, whether that’s through a superior digital experience, a convenient ATM or a neighborhood branch. Every experience needs to be personal, easy and fast. “Ultimately it’s about empowering people to live the lives they want,” said Donna Vieira, Chief Marketing Officer for Chase Consumer Banking. “Our role is to make it easier for customers by allowing them to bank on their terms.” Mobile banking is changing quickly. Customers can now use their smart phones to pay bills, send money to another person, transfer money, check account balances — and even deposit checks. Consumers are leading the way by showing how much they want these new and convenient options. On average, Chase added about 18,000 new mobile users every day in 2014. Almost 20 million Chase customers use the bank’s mobile app, up 20 percent

from last year. “It’s the way our customers want to bank,” said Vieira. “We decided we were going to show people how fun and easy it is to do digital banking.” Online banking, which uses a computer instead of a smart phone, also is growing in popularity and capability. For instance, Chase Online Bill Pay allows customers to pay almost any bill without the hassle of

writing a check. Just add your payee and then schedule onetime or recurring payments. Once your payees have been added, customers can make payments on the go with the Chase Mobile app. Online and mobile banking can help customers bank more safely and securely. Chase offers a wide range of account alerts that help customers monitor their finances and help avoid overdrafts. Customers can sign up for email or text notifications alerting them of low balances, large transactions and other account activity. Alert settings can be personalized and are flexible for the customers’ wants and needs. We know our customers still want to come into the branch when they need advice or support. But for a basic transaction, they increasingly prefer to do it themselves. With mobile banking, your bank now fits in your pocket, allowing customers to do their banking virtually anywhere, anytime. Visit Chase.com or visit your nearest Chase branch to learn more.

CHASE IS PROUD TO SUPPORT OUR LOCAL NEIGHBORHOOD

SO YOU CAN MAKE OUR COMMUNITY A BETTER PLACE. Visit Your Neighborhood Chase Branch Today.

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FINANCIAL

DEFENDER | APRIL 23 | 2015

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A focus on church lending

By RAY VITULLI Allegiance Bank Texas

s we know, in most cases, the churches in our communities serve not only as places of worship, but as true community centers, providing education, recreation, nourishment, fellowship and numerous other services for its congregation and guests. Because of the ever increasing demand for these ministries and outreach programs, many churches find themselves in need of expansion. From the sanctuary to meeting rooms to fellowship halls to recreation space to parking, a growing church is constantly in need of capital improvements. Allegiance Bank has extensive experience with church lending. If your church has expansion needs or even if you have an existing loan and would like to explore refinancing options, an Allegiance banker can guide you through the process. There are a few rules Ray Vitulli, President Allegiance Bank Texas of thumb to consider when determining the borrowing capacity of your church. The items listed below are simple, but very important to follow so that borrowing levels are manageable for the church and its congregation: • The level of debt should not exceed three times the annual revenue of the church. • The annual debt service (principal plus interest) should not exceed 35 percent of the annual revenue of the church. • The level of debt should not exceed 75 percent of the appraised value of the church. • The amortization of the loan (or repayment terms) should not exceed 20 years. • The church should maintain cash reserves equal to at least 90 days of fixed operating expenses. As we go through the above analysis, some items may give conflicting results. For example, most likely, the annual revenue test, debt service test and loan to appraised value test will not produce the same answer. In those cases, the results are reconciled in order to determine a final conclusion that makes sense given the financial condition of the church. Allegiance Bank enjoys banking relationships with churches all across Houston and the surrounding area. Whether your church is in need of a new building, expansion of existing buildings, new furniture and equipment, or a refinance of existing loans, Allegiance Bank has the expertise to provide you with a banking solution. Michelle Droubi with Allegiance Bank recently provided financing for The Daily Bread Church in Northwest Houston. Describing his experience with Allegiance Bank, Pastor Ellis Powell said, “I have been involved in some form of financing, corporate contracts, appraisals, and approvals for over 20 years and I must say that working with Michelle at Allegiance Bank was

by far the smoothest and most seamless partnership that I have ever experienced. “Allegiance Bank really pledged their allegiance to The Daily Bread Church and partnered with us to help the extraordinary people in our community.” We value the relationship with Pastor Ellis and The Daily Bread Church and would appreciate the opportunity to visit with you and your church. With 16 full-service banking offices in Houston, Katy, Bellaire and Clear Lake, Allegiance Bank serves

the needs of owner-operated businesses, churches, organizations and individuals throughout greater Houston. We offer a variety of traditional loan and deposit products and pride ourselves on delivering exceptional service. What’s more, our dedication to community is unmatched. If your church is ready for expansion or growth, stop by an Allegiance Bank office, or visit www.allegiancebanktexas.com and experience The Allegiance Way today.

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AllegianceBank T

NEVER TAKE SLOW FOR AN ANSWER. At Allegiance Bank Texas, we understand time really is money. That’s why we empower each of our lenders with the agility and ability to get you the answers you need right away – often, the very same day. Quick response means you can take decisive action to get your business on the fast track to success.

AllegianceBank T

MAKING A DIFFERENCE, TOGETHER.

281.894.3200 | AllegianceBankTexas.com/def

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DEFENDER | APRIL 23 | 2015

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Five smart spending tips

for tax refunds

FAMILY FEATURES

or savings-savvy consumers, tax season means getting creative with how to use your federal tax refund check. The IRS says the average tax refund issued so far in 2015 tops $3,500. While it can be tempting to hit up the mall and blow through your money the second that big check arrives, smart spenders find ways to turn a refund into a “MeFund” through thrifty money-management decisions that keep cash in their pocket. From investing in yourself to paying down debt and being a smarter spender and saver, let tax refund season be your time to get ahead. By using that tax refund check wisely, you’ll set yourself up for financial prosperity in 2015 and beyond. Lynnette Khalfani-Cox, “the Money Coach,” and personal finance expert Julie Stav suggest five smart ways to stretch your refund check, making your money go further and enhancing your quality of life:

Invest in yourself. In today’s economy, it’s wise to invest in your education, your career and your health. Each will benefit you personally and professionally. Consider using some of your tax refund check to take a continuing education class or attend a business networking event. Similarly, invest in your health by signing up for a gym, taking yoga classes, or getting the aid of a personal trainer. A healthy body can boost creativity and productivity – and hopefully lower your long-term healthcare costs too.

Pay off debt. A recent study from the American Psychological Association showed money is a top cause of stress for Americans. To help rid yourself of money worries, reduce debt with your tax refund. Pay off a credit card bill, wipe out a lump sum on loans, or make an extra mortgage payment to help toward becoming debt free.

Spend wisely by taking advantage of seasonal promotions. If you are going to spend on something you want, do it the smart way. Take advantage of seasonal promotions in order to keep much of your refund in your pocket, such as a discounted cell phone plan.

Budget for larger purchases. If you’re thinking about spending your tax refund on a vacation or must-have electronics, be sure to first

budget realistically. Remember, a vacation won’t just involve travel expenses and hotel accommodations. Be sure to factor in food, entertainment and miscellaneous costs such as tips, souvenirs and parking. Before using your refund on a big-ticket purchase, you should also use helpful budgeting tools to monitor your monthly spending. Mint.com is an online and mobile budgeting software tool that can help you track your spending.

Create a “MeFund.” A final way to put your money to good use is to boost your savings. Create a “MeFund” as a way to save more every month. Whatever your goal, you’ll reach it a lot sooner if you save exclusively for it.

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Older adults should beware of scam artists

nyone can be a victim of financial fraud, but older adults are particularly at risk. Among the reasons: Scam artists and thieves know that many senior citizens have accumulated money and other assets throughout the years. Those who commit elder fraud range from loved ones – family members, friends or caregivers – to complete strangers. Here are practical tips from the FDIC on how to protect yourself or someone else.

“As difficult as this may be, reporting the incident is the only opportunity you have to recover some or all of your loss,” said Irma Matias, an FDIC community affairs specialist. “By telling your story you also could prevent the perpetrators from taking advantage of others.”

Avoid wire transfer scams

Remember the red flags of a fraud. Some of the classic warning signs include: • An unsolicited phone call, e-mail or other request that you pay a large amount of money before receiving the goods or services. • An unexpected e-mail or call requesting your bank account number, perhaps one asking you for the information printed at the bottom of one of your checks. • An offer that seems too good to be true, like an investment “guaranteeing” a return that’s way above the competition. • Someone expressing a new or unusual interest in your finances. • Pressure to send funds quickly by wire transfer • The other party insists on secrecy.

Research a new financial advisor before investing money or paying for services. Though the vast majority of brokers, financial planners and other professionals are honest and reputable, some commit fraud. Before committing to working with a financial advisor, confirm that he or she is properly registered or licensed and has a clean record.

Be careful who you give the legal authority to access or manage your money. One way older adults can have someone else make financial decisions and transact business for them is by having a legal document called a power of attorney (POA). An attorney can help you decide the right type of POA for your needs. “Only give POA authority to someone you trust and who understands your wishes and preferences,” suggested Luke W. Reynolds, chief of the FDIC’s Outreach and Program Development Section. “Also consider adding oversight, such as by requiring two people you trust to agree on decisions within a reasonable time frame or having a third party review transactions that have been made.” If you decide to use a POA, contact your bank and other financial institutions to confirm they will accept the document you plan to use. They may have their own form and require that customers use that.

Protect your personal information. Never provide Social Security numbers, bank account information, PINs, passwords and other sensitive information in response to an unsolicited call, fax, letter, e-mail or text message, no matter how genuine the situation may appear.

Closely monitor credit card bills and bank statements. Look at your statements as soon as they arrive and report unauthorized purchases, withdrawals or anything suspicious, regardless of how small or large the dollar amount. Immediately report a fraud or theft to someone you trust as well as the proper authorities. Many older people make the mistake of not telling loved ones or not contacting the police or other law enforcement agencies when they’ve been victimized. Perhaps some are embarrassed to admit that they were “misled” and lost money. Others have fears of losing their independence.

Americans of all ages are urged to beware of wire transfer scams. “Crooks like their victims to use wire transfers because the money moves fast and they can take the money and run before the victim discovers the truth,” said Michael Benardo, manager of the FDIC’s Cyber Fraud and Financial Crimes Section. How can you protect yourself against wire fraud? • Never wire money to people you don’t know, regardless of how convincing or enticing their story may be. Scammers often win their victims’ confidence with some “bait,” such as a work-at-home offer, a great deal on a product for sale, or news that you have won some kind of lottery • If you’re being pressed to make a decision or send money fast, it’s probably a sign of a scam. • Walk away from any offer from a stranger who asks you to deposit a check into your bank account and instructs you to wire any of that money to someone else, perhaps in another country. Later you will find out that the check was fake and you are out all of the money you wired. • If you are selling something online, be wary of a request by a “buyer” to wire you the money because that may be a ruse to get your bank account information. For more information visit www. consumer.ftc.gov.

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