Staying Afloat In Todays Economic Tidal Wave

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Staying AfloatIn Todays Economic Tidal Wave

• Presented by Commerce Bank
• Karen Favor, Retail Sales Manager

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Money Management

• 1st Figure out what you ARE doing
• Get organized
• Awareness is key!
• 2nd Get a goal!
• 3rd Make a plan
• get the tools

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Online Banking Bill Pay

• Access and manage your bank accounts and credit
  cards
• Keep an eye on recent transactions
• Transfer funds between accounts
• Download transactions into money management
  software
• Set up recurring payments to be automatically
  made
• Sign up for E-Billing to get bills electronically
  delivered
• Keep all bill payment history in the same place

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Budget!

• Start with what you are doing
• List out things you want to work on improving
• Comparison shop your internet, tv, insurance,
  phone
• Set a goal budget for discretionary spending
• Identify larger ticket items needed in near
  future, divide by months until needed save!

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Money Management
1st Figure out what you ARE doing 2nd Get a
goal! Paying down a loan.saving for
something 3rd Make a plan get the tools
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Need A Goal???

• Pay down that mortgage
• 150,000 mortgage, 30 years, 6.5, 948.51/month
• In year 3, if you pay 1000 extra principal
  reduction, you skip 6 months ahead in
  amortization schedule.
• Saves you 4,691 in interest!
• Save money here there by re-evaluating
  subscriptions, insurance, groceries, etc

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Money Management

• 1st Figure out what you ARE doing
• 2nd Get a goal!
• 3rd Make a plan get the tools
• Special purpose accounts
• Automatic savings transfers
• A better loan deal
• Rewards credit card

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The Tools You Need

• Savings Account
• Minimum balance required
• Limited number of withdrawals
• Money Market Deposit Account
• Limited check writing
• Requires a higher minimum balance
• Fees on these accounts if the balance goes below
  a specified level
• Another Checking Account
• No minimum balance just separate funds storage
• Regardless, nickname for special purpose

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Rules of The Road for Lending

• APR annual percentage rate
• Reflects all costs of obtaining the credit
• Loan fees, application fees, etc. annualized
• 17,000 car loan at 8 with no fees 8.004 APR
• With 30 origination, 8.079 APR
• With 179 dealer processing fee, 8.449 APR
• With 250 dealer processing fee, 8.636 APR
• Mortgage points fees charged by lenders, buy
  down rate
• 1 point 1
• 100,000 loan with 3 points 3,000 fee
• Closing Costs mortgage loans only, title
  search, origination, appraisal fees, filing fees
• PMI private mortgage insurance, loans over 80
• Protects lender, not you a good goal to reduce
  LTV eliminate!

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Credit Scores

• What is a FICO score?
• FICO score is your credit rating
• Ranges from 300 to 850, higher the better
• myfico.com
• Why does credit history matter?
• More likely to be able to borrow when needed
• Eligible for a lower interest rate or better
  borrowing terms
• Can impact other areas of your life including
  getting a job, renting an apartment, utility
  deposits, insurance, etc.
• Missed payments can show up on credit reports for
  up to 7 years

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Not out of clear blue sky

• Credit scores are based on
• Payment history
• Amounts owed
• Length of credit history
• New credit
• Types of credit in use
• Build and keep a good credit score
• Pay your bills on time
• Pay more than minimum
• Keep debt to a minimum
• Do not open new accounts that
• are not needed
• Take advantage of time
• Build credit slowly and responsibly
• Shopping around provision

In 12 months. 1 time late free pass 2 times
late free pass 3 times late retro back
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Credit Cards
Be Aware

• Annual fee and when it will be charged
• Protection plan fees
• Low introductory rates that will increase within
  a few months
• Increases due to late payments
• Penalty pricing
• Grace period
• Length of time allowed to make a payment before
  charges are applied
• Cash Advance options
• Interest is compounded for these transactions at
  a different rate

• TIP Segment use of cards
• Payments apply to lowest first
• Maximize rewards

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Two Good Strategies

• Maximize Rewards
• Start charging one fixed-payment bill
• Use a card that accepts mid-cycle payments online
• Pay off balance in full before due
• Add in another fixed-payment bill
• Emergency/Unexpected Expenses
• Keep a record of credit card purchases as they
  occur
• Pay down and re-use line
• If youve already charged too much
• Find a permanent solution
• Unsecured loan or home equity loan
• Balance transfer

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Auto Loans

• Look for competitive rates
  flexible repayment options
• Compare whole package
• Prepayment penalties, origination fees, etc
• Extended loan terms lower your monthly payment
  but you may need GAP coverage
• Auto debit protects your payment history
• Build a good credit record by paying on time

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Maximizing Loans

• Flip car loans into home equity loans
• More flexible payments typically
• Can turn interest expense into tax deductions
• Combine car loans into multi-collateral loans
• Lower payment by combining
• Pledge difference into savings account
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• 15,000 car loan for 60 months at 8 304.17
• 46 payments left, owe 12,012
• 19,000 car loan for 60 months at 8 385.29
• 22 payments left, owe 7,857
• Total of Payments 689.46
• Multi-collateral loan for 19,869
• 48 months at 8 485.09 save 204.37
• 36 months at 8 622.63 save 66.83 and
  accelerate payoff

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Questions?

• For more information visit

commercebank.com/learn
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