Tuesday, May 23, 2017

How To Pay For Your Child's College Education

In today's competitive workforce, a college education is more important than ever. A four-year degree, especially when followed by higher education, offers the potential for increased salary, more advancement opportunities, and better all-around job satisfaction. Unfortunately, tuition costs are raising substantially every year. For many parents, the prospect of paying for their children to attend a university is daunting (to say the least). If you are trying to figure out how to afford your children's college educations, First Bank of the Lake is here to help with these quick suggestions. Here's a hint - student loans aren't your only option!


As with all big expenses, the best way to prepare for it is to plan ahead and save in advance. A 529 college savings plan is a special type of savings account that is specifically designed to cover the costs of tuition, books, room, board, and other college-related expenses. In some states, parents with a 529 plan qualify for an income tax deduction or credit on the contributions they make to the account.


Scholarships are gifts awarded based on merit or need. Unlike loans, a scholarship is a gift of "free money" that will not need to be repaid. There are countless different types of scholarships available. Academic scholarships, athletic scholarships, and cultural scholarships are commonly offered by college institutions. Third-party organizations and countless online sources also commonly offer scholarships. A high school counselor or the financial aid office in a university are good places to begin the hunt for scholarships.


Federal grants (also commonly called "financial aid") is another potential way to offset the costs of funding your child's education. These grants are needs-based and, as such, do not require repayment. Students must fill out the FAFSA (Free Application for Federal Student Aid) in order to be considered. Federal student loans may also be available for qualifying students.

Work-Study Programs

Most universities offer a host of on-campus job opportunities for students that are part of a work-study program. Many of these programs are needs-based (qualification will be determined after the student submits the FAFSA), but most colleges offer a few additional positions that may be filled by any student, regardless of household income. These programs are generally an ideal way for students to offset the cost of tuition and to earn a little extra spending money. Students can generally get positions in the department of their chosen degree, which helps strengthen their resumes.

Student Loans

Funding college without going into debt is obviously the most attractive option, but in some cases, it may not be feasible. While you can combine the other strategies we have discussed so far to cover many of your expenses, student loans are always available if you need to fill in the gaps. Many families use student loans to cover approximately 20% of the total cost of their children's education. Federal student loans often offer cheaper interest rates than private loans, so it is best to start your search there. 

Reducing Costs

Finally, one of the best ways to afford a big expense is to lower the price tag. Some universities are more expensive than others, so if money is a concern, it may be in your best interests to look at schools that fit more easily into your budget. You can also reduce costs by encouraging your children to earn some credits as part of a dual enrollment program or at a two-year community college, as these options are often significantly more affordable than traditional four-year institutions. Your children can then transfer to their chosen institution to complete their degrees.

Good Luck!

On behalf of everyone at our Lake of the Ozarks bank, we wish you the best of luck on this worthy endeavor. A college education will serve your children for years to come, so it is wise to begin preparing well in advance. If you would like to learn about our savings accounts at the Lake of the Ozarks or other investment options (such as CDs), visit our website at 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

Tuesday, May 16, 2017

5 Damaging Money Management Myths

We live in a world where information travels rapidly. Social media has made it remarkably easy for people to share content with their friends, families, and coworkers, and distant circles - if a headline catches your eye, you may find yourself clicking "share" or "retweet" without a second thought. 

Unfortunately, many people often neglect to investigate the validity of the information before they share it. As a result, misinformation spreads across social media (and the rest of the internet) like wildfire. Some articles, though inaccurate, are relatively harmless. Others may carry damaging misinformation that can negatively impact its readers.

Financial misinformation is a prime example. A person's financial health and literacy greatly influences his ability to lead a successful, financially solvent life. If he is constantly fed misinformation about the best way to handle his money, he may struggle to get on top of his financial situation.

Our local bank at the Lake of the Ozarks is here to help protect people like you from the rampant money myths that plague our culture. Keep reading to learn the truth behind some of the common personal finance myths you may have heard.

Myth #1:
You Can Save For Retirement "Later"
If you're in your twenties or thirties, retirement is probably the furthest thing from your mind. You have other financial priorities, such as buying your first home, getting married, paying off student loans, buying a car, or supporting your young family. Since retirement is decades away, it may seem only natural to wait a few years before you actively begin saving for it. The longer you wait, however, the more you limit your overall investing potential. In order to maximize the true benefits of compound interest, it's best to start saving for retirement as soon as you earn your first paycheck.

Myth #2:
You Should Invest In Gold Or Other Precious Metals
Gold has traditionally been one of the most popular options for people looking for safe ways to invest their wealth. While owning some gold may not be a bad option, it is better to diversify your investments. CDs, high-paying savings accounts, bonds, and/or stocks work together to create a diversified portfolio that will better guard you against risks. If you put all your eggs into one basket, your savings may be totally wiped out if that one basket "tips over."

Myth #3:
Credit Cards Should Be Avoided At All Costs
Thanks to the steady increase of credit card debt in our nation over recent years, credit cards have earned a bad reputation. Many people believe that the only smart way to handle credit cards is to chop them in half. If used wisely, however, credit cards can be a great financial tool. Keeping your balance low and paying it in full every month can contribute to a strong credit rating. It may also allow you to reap the rewards various credit card companies offer, such as airline miles or cash back.

Myth #4: 
Buying A Home Is Smarter Than Renting
This myth is almost as common as its counterpart: "renting a home is smarter than buying." People tend to have firm beliefs from each perspective. The truth is, however, that renting vs buying should be evaluated on a case-by-case basis. If you anticipate moving to different cities frequently (every 1-3 years), renting is likely the better option for you. If you plan to stay in the same area for a minimum of three years, on the other hand, buying a house will likely make more sense financially. After about three years, the increased upfront costs of buying a house will likely outweigh the steep monthly costs of renting, making homeownership the more affordable option in most cases.

Myth #5:
Only Wealthy People Need To Worry About Financial Planning
It's true that if you are wealthy, financial planning will likely be more of a priority for you. However, it is just as important (and possibly more important) for people with limited funds to take active financial planning steps as well. When you have limited income, every penny counts. By budgeting your money wisely, you can still accomplish your financial goals (both long-term and immediate) even with a smaller paycheck.

Help Spread The Word
We would love your assistance in our efforts to debunk these common myths about money management. Please share this article with those you think could benefit from the information.

Consider Us Your Local Financial Resource!
First Bank of the Lake is proud to be your local banking resource at the Lake of the Ozarks. We offer a variety of financial services designed to help you enhance your financial situation, including CDs, IRAs, and high-paying savings accounts. For more information, 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

Thursday, May 11, 2017

5 Reasons Why You NEED A Household Budget

It's time to set the record straight - budgeting isn't just for people with lots of money, barely any money, or too much time on their hands. Budgeting is an essential skill that every adult should possess. It doesn't matter if you plan your expenses ahead of time so that you only spend certain amounts in certain categories, if you tally up your expenses at the end of the month to see how much you spent, or if you choose to handle it a different way entirely. What matters is that you do it.

Why You Need A Household Budget

If you think budgeting can't benefit you, think again. The truth is that no matter how much your weekly, monthly, or yearly income is, tracking your finances can help you become (even) more financially successful. Here are a few reasons why it is important to maintain a household budget, courtesy of First Bank of the Lake.

1. Know Where You Stand.
First and foremost, budgeting offers a valuable glimpse into your current financial situation. Without carefully tracking your expenses, you'll have no way of really knowing whether you are in the black, in the red, or breaking even on any given month. You can't plan for the future until you know where you are in the present.

2. Prioritize Your Spending.
What do you consider to be your most important expense categories - groceries, gas, mortgage/rent, or something else? Are you putting more money towards these important categories than the less important ones, like restaurants or shopping? Tracking your spending is the only way to identify how much you are actually spending in each category. By maintaining a consistent budget, you can prioritize your spending accordingly.

3. Plan For The Future.
Once you identify your current situation, you can make a legitimate plan for the future. Depending on what your present circumstances are, you may make plans to pay off debts, save up for a down payment on your first home, plan for retirement, or any number of other financial goals.

4. Track Your Progress.
Budgeting is not a "one and done" process. Once you determine where you currently stand and what plans you want to work towards, you can use your budget to track your progress towards achieving your goals. If you quit budgeting, you'll have no way of knowing whether you are getting closer towards (or further away from) your goals.

5. Be Confident In Your Finances.
The best part about maintaining a consistent budget is that it gives you the peace of mind that can only be achieved by knowing exactly what your financial situation is. By tracking your expenses, you'll know exactly whether or not you are able to afford a bigger purchase you may wish to make, such as a new car or a new flat-screen TV. If you don't have the money to make the purchase right now, you'll be able to make a plan to save up for it. 

First Bank Of The Lake Is Here To Help!

Trust us - it's never too soon (or too late) to build a household budget. Even if you've never attempted it before, you can become a budgeting pro simply by applying yourself. If you're trying to figure out where to begin, see our earlier blog post with sample budgeting strategies you can steal.

Happy budgeting!

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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, May 3, 2017

The Credit Card Trap: What It Is, How It Happens, & How To Get Out Of It

You're normally so good at managing your credit card. You've always kept all your expenses below your credit limit and paid off your statement balance in full every month. Everything was going great - until all of a sudden, things got out of hand.

Sound Familiar?

No one gets a credit card planning to go into debt, but credit card debt is currently sweeping our nation. Eventually, something will happen that may tempt you to use your credit card to make a purchase that you would otherwise not be able to afford.

Maybe your credit card company raised your credit limit, making it harder for you to keep your spending in check. Maybe you were planning a wedding and needed a little extra help paying for some of the supplies. Maybe cash was tight, and you needed to use the credit card to pay for some of your utilities. No matter what happened, you may suddenly find yourself with a higher statement balance than you can afford to pay in full.

The Credit Card Trap

The scenarios we just described are situations many people experience. Unusual circumstances can shake up your routine, which may make it harder to keep up with your normal money management strategies. 

Because of their immense convenience (and possibly also because they don't require you to specifically watch your money leaving your possession), credit cards make it all too easy to spend beyond your means. Unfortunately, it's also easy to rationalize the extra spending. "It's okay just this once," we tell ourselves. "I'll pay it off soon enough that I'll barely notice the interest." 

However, the truth is that many people rarely follow through this promise. Even though that big expense that tipped you over your limit may have been a one-time thing, the rest of your monthly obligations will stay the same. You may keep using your credit card out of habit and/or convenience, causing your overall balance to steadily increase. Before you know it, you may find yourself faced with a formidable debt that seems impossible to get out from underneath.

Fighting Your Way Out Of The Trap

Should you find yourself in this type of situation, it is important that you take action immediately. Allowing credit card debt to remain unpaid will likely hurt your credit score. If it remains unpaid for long enough, you may also find yourself being sued by creditors for your delinquent debt.

If you notice that you are accumulating a significant balance on your credit card, stop using it. Switch to cash or your debit card for your monthly purchases. At the very least, make the minimum monthly payments on your credit card. Because credit cards often have high interest rates, it may be wise to focus your attention on eliminating this debt first and foremost. Put any extra money towards repaying this debt.

It may take several months or several years, but if you make the minimum monthly payments without continuing to rack up increased debt, you will eventually be able to get your credit card paid off.

Avoiding The Trap Altogether

While it is possible to get out of the credit card trap, your best bet will be to avoid falling into it altogether. Using a credit card requires a great deal of financial responsibility. If you can't trust yourself to only use your credit card to make purchases you could just as easily make with cash, you may be better off sticking with a debit card.

Get The Benefits Of A Credit Card WITHOUT The Risk!

One of the primary reasons many people sign up for credit cards is to get the cash back rewards they offer. However, credit cards are no longer your only option. If you are interested in being rewarded in cash for purchases you make every single day, ask our local bank at the Lake of the Ozarks about Kasasa Cash Back® Checking.

Our Kasasa Cash Back® Checking account doesn't have any monthly fees. In fact, this account PAYS YOU by refunding ATM withdrawal fees and rewarding you in cash for your monthly purchases. Earn 4.00% cash back on all your purchases - up to $120 per year!*

Contact First Bank of the Lake for more information.

Qualifications and rewards may vary by account.  Account approval, conditions, qualifications, limits, time frames, enrollments, log-ons and other requirements apply.  
Contact institution’s service representative for additional information, details, restrictions, rate calculations, processing limitations and enrollment instructions.
* APY = Annual Percentage Yield      Member FDIC

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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