Tuesday, March 21, 2017

4 Financial Life Lessons That Should Be Obvious

Handling money wisely is often easier said than done. Talking about how your money should be allocated and how you should reign in your spending is one thing, but incorporating these tactics into your everyday life is often easier said than done. Sometimes, we need a little extra push to help steer us in the right direction.

First Bank of the Lake is here to help provide that extra push. Keep reading to find plain, no-nonsense explanations of pieces of financial wisdom that should be obvious, but many people have trouble incorporating into their daily lives.

1. Don't Spend More Than You Earn
You don't have to be a mathematician to figure this one out. The concept is simple: if you spend more than you earn, you won't be able to sustain yourself in long run. Ideally, you should bring in more money than you spend every single month. Life is unpredictable, though, and sometimes big expenses are unavoidable (health insurance premiums, new tires, etc). Spending more than you earn on any given month isn't necessarily a bad thing, as long as the scale tips back in the other direction by the end of the year.

2. Keep A Budget
Your budget is the most valuable piece of equipment in your financial toolbox. It allows you to keep track of exactly where your money goes, curb your spending in certain categories so that you don't overspend, and set yourself up for long-term financial success. There are a variety of budgeting strategies you can choose from. Ultimately, there is no "right" or "wrong" way to manage your budget - strategies range from extremely complex to extremely simple. All that matters is that you find a strategy that works for you and that you stick with it. 

3. Use Windfalls Wisely
Every so often, you may find yourself blessed with financial windfalls from various outside sources. You may get a bonus at work, you may inherit money from a deceased family member, or you may get a sizable tax refund. No matter where this extra money comes from, it's important to use it wisely. Most people use the extra cash to buy a new TV or other fun purchase, but we encourage you to use it to your advantage. Put it towards your highest-interest debt, your mortgage, or your retirement account. Allocating your windfall towards these types of purposes will pay off great dividends in the long run.

4. Plan For The Future
When it comes to managing your money, planning for the future is one of the most important steps you can take. No matter where you are currently at in life, it's important to look ahead. Your first step should be to build an emergency fund to cover unexpected expenses that may present. Your next step should be to set up a retirement account and begin contributing to it regularly, no matter how old you are. Retirement may seem incredibly far off while you're still in your twenties, but by beginning your retirement contributions now, you'll have lots of time for compound interest to work in your favor.

First Bank Of The Lake Can Help Set You Up For Financial Success
We can all use a little help from our friends every now and then. Our community bank at the Lake of the Ozarks is here to help you. Our new Kasasa services are designed to position you for long-term success. We offer high-interest savings accounts at the Lake of the Ozarks as well as cash back checking account options. For more information about our bank in Osage Beach MO, visit our website: www.FirstBankLake.com

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Wednesday, March 15, 2017

Good Debt vs Bad Debt: Understanding The Difference

Not all debts are created equal. Learn how to understand the difference.

Our culture tends to view debt as a horrible prospect that should be avoided at all costs. Statistics paint scary pictures of debt in modern America, stating that Americans collectively owe billions of dollars in credit card debt, mortgages, and other types of debts. So as to avoid becoming bogged down by debt's great burdens, some people swear off all types of debts so that they live financially solvent lives. However, some types of debts can actually be helpful. First Bank of the Lake is here to help you understand the difference.

Wait - There's Such Thing As "Good" Debt?

Yes, there is! A good debt is money that you choose to borrow as part of a well-informed, well-educated decision. Good debt helps to put you in a favorable situation that you would not otherwise be able achieve. By borrowing the money now, you are able to work towards a better situation in the long run.

Mortgage debt is a perfect example of good debt. Taking out a mortgage allows you to purchase a home that you would otherwise not be able to purchase. In addition to serving as a place to live, your home is a financial investment - when the time comes, you will ideally be able to sell your home for more than your original purchase price. Depending on how much your home's value appreciates and the health of the housing market at the time that you decide to sell, you may be able to turn a profit of several thousand dollars. 

What Makes A Debt "Bad"?

Unlike good debt, bad debt is debt that puts you behind in the long run. Steep interest and copious fees end up costing you far more than the original amount borrowed, without anything to show for it in the long run. 

Credit card debt is a common example of bad debt. Unlike a mortgage, credit card debt does not offer any long-term benefits. In fact, it offers just the opposite. Racking up credit card debt can significantly hurt your credit score, the high interest charged by credit card companies will ultimately cost you far more than the original amount borrowed.

How Can I Know Which Is Which?

It is important to be realistic and honest with yourself about what types of debt are helpful and which types are not. Before taking out a loan, ask yourself the following questions:
  • What long-term purpose will this debt serve? 
  • How much money will this end up costing me in the long run?
  • Will I be able to make this money back by selling my investment?

Asking these questions can help you identify the consequences taking out a debt will bring, and you can use this information to determine whether or not it will help you or hurt you in the long run.

First Bank Of The Lake - A Community Bank That Cares

At our community bank at the Lake of the Ozarks, we don't try to sell you a loan or service you don't need. Not only that, but we make all of our decisions right here at home, and we use judgment and compassion when evaluating customer requests. Visit our website for more information about our bank in Osage Beach MO.

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Wednesday, March 8, 2017

Top 7 (Lame) Excuses For Not Building A Personal Budget

When we think of living paycheck to paycheck, most of us think of low-income families. After all, it is easy to understand how it may be hard to make ends meet when there is very little money coming in. What we have seen, however, is that the amount of money you make is rarely tied to whether or not you live paycheck to paycheck. A single mother making $40,000 per year and a married couple with no children making $110,000 per year could both be scraping by until each payday. Generally, it doesn't have to do with your income - it has to do with your budget (or lack thereof).

At our Lake of the Ozarks community bank, we talk frequently about the importance of budgeting and different strategies for building a budget. No matter how much we talk about it, though, it is ultimately up to you to make it happen. Unfortunately, statistics show that well over half of American do not keep a household budget.

What about you? Do you keep a budget? If not, why not? This week, First Bank of the Lake is here to examine some of the common excuses people give for not building a budget (and why they aren't valid reasons).

1. "I'm Not Good With Numbers."
This is possibly the most common excuse people give. If math is challenging for you, the idea of budgeting may seem difficult or impossible. However, you have access to countless free budgeting resources that will do the math for you. A quick Google search will reveal multiple free apps and downloadable spreadsheets you can use to maintain your budget.

2. "I'll Start Budgeting Once My Income Increases."
This is an other common excuse, but one that can have disastrous long-term consequences. It's true that your income should increase as your career advances, but your expenses will likely also increase as you eventually get married, buy a house, have children, and take on other responsibilities of adulthood. It is easy to get into the habit of putting off budgeting. The only way to ensure that you don't fall into this trap is to start right now, with whatever income you have. 

3. "I Don't Like Tracking My Spending."
If you don't want to see the facts about where your money is going each month, it's probably because you know, deep down, that you aren't spending it wisely. It can also be time-consuming to keep track of every purchase/expense throughout the month. If this sounds like an excuse that you would make, the cash envelope method may be a good option for you.

4. "It's Too Time-Consuming."
This one is partially true - building a budget does take some time, especially in the beginning as you experiment with different strategies to find the one that works best for you. However, once you find your rhythm, things will get easier and faster. It's just a matter of sticking with it long to see these improvements.

5. "I Don't Know Where To Start."
Let us ask you this: did you know"where to start when you studied for your first college exam? What about when you started you first long-term relationship? Your first day at your new job? We rarely know where to start when we first try something new, but we stick with it and eventually it becomes second nature. The same applies to budgeting.

6. "Budgeting Takes Away All The Fun."
This is a common misconception about budgeting. Most people assume that if you maintain a budget, you will never get to spend any money on "just for fun" purchases. However, successful budgets account for fun, miscellaneous expenses - they simply put a cap on them so that they don't get out of hand.

7. "I Don't Have Enough Money To Budget."
This is possibly one of the most dangerous excuses you can make. The reason you don't have enough money to budget is because you aren't budgeting. If you track your expenses and keep them within your income, you will have enough money. If you do it right, you should be able to achieve all of your financial goals such as buying a house, paying off debt, and planning for retirement.

There's No Time Like The Present!
The best time to start building a budget is always right now. Don't let these (or other) lame excuses prevent you from taking control of your finances and claiming the life you deserve. 

First Bank of the Lake is here to help you along your journey in any way we can. Our Kasasa accounts are perfect for young adults looking to improve their financial situation - like you! We offer free checking accounts with valuable rewards, and we can link these accounts to a Kasasa Saver account that automatically puts money into savings. Visit our website for more information about our Kasasa services.

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Monday, February 27, 2017

What Type Of IRA Is Right For You?

How much time do you spend planning for the future? 

If you're like most young adults, your financial priorities probably include covering the cost of your wedding, saving up to buy your first home, or supporting your family as you prepare to have children. With so many big expenses on the horizon, looking past these immediate expenses and on to your distant financial future may seem impossible and/or pointless. However, First Bank of the Lake is here to tell you that the sooner you can begin setting money aside for retirement, the better.

Saving For Retirement

Even if retirement is still decades away, it is never too soon to begin setting money aside. The primary reason for this is simple: the sooner you begin saving for retirement, the more money you will have in the long run. By opening a retirement account when you are still young (particularly in your early twenties), you'll have more years to let compounded interest work to your advantage.

Individual Retirement Accounts

Some companies offer employee-sponsored 401(k)s, SEP IRAs, or SIMPLE IRAs. If you are fortunate enough to work for an employer who will match your contributions to your retirement account, we strongly encourage you to take advantage of their program. 

If your company does not offer retirement benefits, it is still important to begin preparing for the future. We recommend that you consider opening up an Individual Retirement Account (IRA). First Bank of the Lake offers a variety of IRAs at the Lake of the Ozarks. Keep reading to learn about the different types of IRAs and how to decide which type is right for you.

Traditional IRAs*

You may contribute up to $5,500 ($6,500 if you're age 50 or older) as long as you and/or your spouse (if filing jointly) have sufficient taxable income. You may get a tax deduction when you contribute, but your money will be eventually taxed as ordinary income when you take it out. If you take it out before it is allowed (age 59.5 ), you can also incur a penalty, in addition to the tax due. You can't contribute past age 70.5. At age 70.5 you have to start taking "required minimum distributions."

Roth IRAs*
You may contribute up to $5,500 ($6,500 if you're age 50 or older) as long as you and/or your spouse have sufficient taxable income, but there are income limits above which you can't contribute. You do not get a tax deduction when you contribute to a Roth IRA, but withdrawals can be taken out completely free from income taxes, as long as you don't withdraw from the earnings on the account before the age of 59.5. You can contribute at any age, and you are not required to take a minimum distribution from your own Roth IRA.

Contact First Bank Of The Lake To Open Your IRA!

As your community bank at the Lake of the Ozarks, we are here to help you prepare for both your immediate and your distant future. If you would like more information about opening an Individual Retirement Account, we hope you'll contact our bank in Osage Beach MO. We look forward to serving you!

*Other conditions may apply, please consult your tax advisor.

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Wednesday, February 22, 2017

5 Money "Tips" You Can Ignore

Magazines, blogs, books, pamphlets, news sources, websites, social media resources... there are countless resources that provide advice on how to manage your finances. These resources offer hundreds (if not thousands) of different tips, and wading through all of the advice can be a little daunting. With so many different resources saying different things, how can you be confident which tips are worth listening to? 

First Bank of the Lake is here to help clear up any confusion. This week, we're using our blog to identify some common money "tips" you can ignore.

#1: "Buy All Your Groceries In Bulk."
The general suggestion to buy your groceries in bulk stems from the assumption that many grocery stores offer discounts if you purchase large quantities of a particular item at one time. While this is often true, it is still best to be selective about which items you buy in bulk. If you buy extra and half of it goes unused, you will have wasted money on food that ended up needing to be thrown away.

#2: "You Should Never Go Into Debt."
Some sources claim that you should never take out a loan or go into debt of any kind, since you'll have to pay interest and put potentially yourself at risk for falling into a hole you may never be able to climb out of. While avoiding unnecessary debt is certainly smart, some types of debt may be able to help put you ahead in the long run. Business loans, new car loans, and mortgage loans are a few examples of what is often simply referred to as "good debt." "Bad debt," such as credit card debt, is the type you want to avoid.

#3: "Use Credit Cards To Tide You Over."
If you're like many people, you may pull out the plastic without giving it a second thought. If you don't have enough cash, your credit card may seem like an obvious alternative. However, it's important to realize that when you use your credit card, you will still have to make the payment eventually - with added interest. The moral of the story is, if you cannot afford to make a purchase without using your credit card, you shouldn't make the purchase.

#4: "If Money Is Tight This Month, Just Pay The Minimum Balance On Your Credit Cards."
Credit card statements often include three numbers: the total outstanding balance, the total amount of your current statement, and the minimum payment due. Even if your statement is several hundred dollars, the minimum payment required is often exceedingly low (such as $25). Making the minimum payment can be tempting, but it will end up costing you more in the long run because of interest and potential late fees.

#5: "Buying A House Is Always A Good Investment."
This tip is tricky, because in certain situations, homes are can prove to be incredibly valuable investments that can substantially increase household wealth. The "always," part of the statement can be a bit misleading, however. If you buy a house when you are not financially stable, you may find yourself in a compromising situation. The consequences from defaulting on a mortgage loan can be severe and long-lasting. We encourage you to buy a home, but only when you are confident you will be able to meet the financial obligations of homeownership.

We're Here For You
At our community bank at the Lake of the Ozarks, your success is our success. We are proud to provide the resources our clients need to manage their finances wisely. We offer savings accounts and checking accounts at the Lake of the Ozarks to help you address your day-to-day financing needs. For more information about our financial services in the Lake Area, visit our website at www.FirstBankLake.com or call us at 573-348-2265.

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Tuesday, February 14, 2017

Applying for an SBA Loan: 3 Tips

Starting your own business is a thrilling (not to mention a little nerve-wracking) process. Endless possibilities and opportunities lie ahead - all you have to do is go out and get them!

Of course, finding the funds to start your own business can be a little challenging. Fortunately, SBA loans are designed specifically for aspiring entrepreneurs who need a little boost to help them get started.

Preparing for an SBA Loan Application

If you are thinking about starting your own business at the Lake of the Ozarks, consider taking out an SBA loan from First Bank of the Lake. Here are a few tips to help you prepare.

1. Draft A Business Plan
If you plan to take out a loan, having a business plan will likely be non-negotiable. Your business plan will demonstrate to your lender how you to plan to handle various aspects of your business, from allocating your start-up costs to managing your cash flow (and everything in between). It could take some time to build a thorough and comprehensive business plan, so it may be wise to begin the process sooner than later.

2. Clean Up Your Credit Report
As a brand new business, your company won't have financial history for the lenders to review. As a result, they'll likely examine your own financial background instead. It may be worth taking the time to order a copy of your own credit report first, so you can examine it and identify any problem areas. If anything is reported incorrectly, fixing it before you officially submit your loan application may ward off unnecessary complications.

3. Think About Collateral
Clay Lindhorst
Vice President & SBA Loan Officer
Not all lenders will ask for collateral, but depending on your loan amount and the percentage you are able to put down, some may require it. As you organize your financial situation, examine your personal assets and determine what you are able/willing to offer as collateral. The type/value of collateral you can provide may impact the down payment required on your loan.

Advantages of an SBA Loan

SBA 7(a) loans offer several benefits that make them attractive options for small business owners:

1. Low Down Payments
The purpose of SBA loans is to provide much-needed funding to help new businesses get up and running. Consequently, SBA loans often offer loan down payment options to make them affordable to their target market.

2. Long Term Financing
Long-term financing options allow loans to be paid off gradually. This improves cash flow by keeping the monthly payments lower. In most cases, SBA loans are for fixed terms and will not have a balloon.

3. Several Different Loan Options
SBA loans are not "one-size-fits-all." In fact, there are several different types of these loans you can choose from. Your SBA lender at the Lake of the Ozarks will be able to help you determine which is best for your situation.

Contact Us for More Information on SBA Loans!

If you are in the process of starting your own business and would like more information about affordable SBA loan options at the Lake of the Ozarks, contact First Bank of the Lake. The Small Business Administration will guarantee part of the loan, but the funding will be provided by our community bank in Osage Beach MO.

With a dedicated SBA lending officer on staff, our local bank is an excellent resource for local entrepreneurs. For more information, visit our website or give us a call today!

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

Wednesday, February 8, 2017

Protecting Yourself From Cybercrime: 5 Common-Sense Reminders

What is your most valuable possession? 

Your home, automobiles, priceless antiques, jewelry or some other expensive item may come to mind when asked this question. While these items certainly do hold significant value, First Bank of the Lake is here to suggest that they are not, in fact, your most valuable possession. Your most valuable possession is not something tangible. In our opinion, the most valuable financial things in your life are your personal information and your identity.

Being Victimized By Cybercrime

Cybercrime is quickly becoming one of the most rampant criminal offenses in the States. Tech-savvy criminals are able to hack into e-commerce websites, email accounts, and protected networks to gain access to sensitive information that they can use for their own personal gain. 

Being the victim of cybercrime can turn your life upside down. Depending on the information the hacker stole, he could use it to file an insurance claim under your name, steal your tax return, make unauthorized purchases on your credit card, or perform any number of other criminal activities. While it is possible to recover from identity theft, its effects can be far-reaching and long-lasting. 

Protecting Yourself From Cybercrime

Since recovering from cybercrime poses such a challenge, it is wise to do everything you can to prevent your personal information from falling into the wrong hands. Our community bank at the Lake of the Ozarks is here to help you protect your sensitive information with these simple, common-sense reminders.

1. Update Your Passwords Regularly
Remembering your login information for so many online accounts can be frustrating and challenging, but updating your passwords regularly is a smart practice. This way, if someone does get access to your account information, he won't be able to use the information he has for long. It is also wise to use different passwords for each of your different accounts.

2. Avoid Questionable Websites
People who live in big cities know that there are certain areas where crime is more likely to occur, and they wisely avoid those areas as they go about their day-to-day lives. The same logic applies to the internet. Visiting scam websites or sites with adult content or hacker information may put your computer at risk of contracting a virus, so it is best to only visit reputable sites.

3. Verify Requests For Personal Information
Have you ever received an email from your bank, credit card company, or insurance provider asking to confirm certain sensitive information? The truth is that these companies will rarely (if ever) send these types of emails. If you get this type of email, avoid clicking on the links included in the email as they may redirect you to an unsafe website. It is always best to open a new browser and go to your provider's website directly - if the request is legitimate, you will be able to address the issue just as easily by logging in directly.

4. Be Cautious When Shopping Online
Though convenient, shopping online may put your sensitive information at risk. If you enter your credit card information into an unsecured website, you risk it falling into the hands of a cybercriminal. Before entering in your credit card information to make a purchase, make sure your browser displays a symbol of a padlock or an unbroken key to indicate a secure site. The web address for secure sites will also start with "https," instead of simply "http."

5. Consider Help From An Outside Source
Sometimes, the best strategy is to simply ask for help. Consider seeking assistance from a reputable source. Kasasa Protect® is an affordable, comprehensive solution that offers round-the-clock monitoring of your personal information. If fraud should occur, you will get access to immediate hands-on assistance to help restore your personal information. 

Kasasa Protect is available at First Bank of the Lake to anyone who is interested in pursuing different options to protect their personal information. Kasasa account holders get discounted rates on this already affordable product. If you would like more information about Kasasa Protect, visit our website or call us at 573-348-2265. We would be honored to help you protect your information!

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265