Thursday, January 21, 2016

5 Money Mistakes To Avoid

Every single person in the United States (and hundreds of other countries) will use money at some point in their lives. Despite this complete pervasiveness, however, many people fall victim to common money mistakes every single day. This week, First Bank of the Lake is here to help you get smart about your finances and avoid some of these common mistakes.

Mistake #1:
Not Keeping Track Of Your Budget
If there's one simple trick that separates the financial masters from the beginners, it's keeping track of your budget. Budgeting is the best way to get a realistic picture of how much money you have coming in, how much is going out, and where it is going. Without a budget, you can't know exactly how much money you have leftover at the end of the month (if any) or where you can cut costs if/when the time comes.

Mistake #2:
Failing To Keep An Emergency Fund
If you have $5,000 in your savings account at the Lake of the Ozarks, how much can you afford to spend? The simple answer is "not all of it," but exactly how much you can afford to spend will depend on your monthly income and total amount of expenses. Most experts recommend keeping enough in your savings account to survive for three to six months without income. Build up to this by putting $100 from every paycheck into your emergency fund.

Mistake #3:
Not Saving For Retirement
If you want to set yourself up for a relaxed and successful retirement, the best thing you can do is start saving for retirement from your very first paycheck. If your company offers a 401(k) match program, set aside as much as you can every month. If your company does not offer any retirement planning benefits, contact us about our IRAs at the Lake of the Ozarks. Even if you only set aside $50 per month for now, it will make a big difference in the long run.

Mistake #4:
Not Setting Up An Estate Plan
No one wants to think about dying, but the truth is that none of us will live forever. It's important to set up a proper estate plan dictating what will happen to your assets after you pass away. Failing to properly plan your estate can result in steep taxation, which means that more of your money will go to the government and less will go to your heirs. Your estate planning attorney will be able to help you determine what type of estate plan best fits your needs.

Mistake #5:
Forgetting To Do The Math Before Taking Out A Loan
You've heard that your new car loan comes with an interest rate of 3.5%, but have you taken the time to determine what that really means? It means that if you take out a 4-year loan for $25,000, the total amount you will pay (with the cost of interest added) is $26,827. The interest amount may not be much in this example, but consider a 30-year mortgage loan for $250,000 with an interest rate of 4.125%. By the time it's all said and done, you will have spent $436,185 on your home (not including the closing costs, private mortgage insurance, and other fees). When shopping for personal loans at the Lake of the Ozarks, it's important to consider the total each option will end up costing you in the long run.

Let US Be Your Financial Resource!

When it comes to choosing your bank at the Lake of the Ozarks, it's important to find one that will keep your best interests at heart. If you're shopping for a new bank in Osage Beach MO, we hope you'll keep First Bank of the Lake in mind! We would be honored to work with you in whatever capacity you need.

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

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