Newsletter

Budgeting 101

by Diane Curthoys, Assistant Branch Manager, Holland

If you've never done a budget before -- relax -- it's not that difficult! The only way most of us can really know where our money is going so we can plan for the future, is to have a written budget. Here's where to start:

Take a month and track what you spend, right down to that latté you pick upbefore work every morning.

Categorize your spending on a spreadsheet: rent/mortgage, heat, electric,phones, food, clothing, car expenses, credit cards, medical, etc. If the bill isn't equal each month, average the amount. If it's an annual bill, divide the yearly cost by 12.

List all of your take home monthly income including tips, child support, nvestment income, etc.

Do the math -- get the total for both columns: Expenses, Income.

Now it's time to do the analysis. First, your mortgage or rent plus your credit ard bills, should not add up to more than 35 to 40 percent of your gross monthly ncome. The amount you pay for credit cards, car payments, student loans and ny other monthly obligations should not be more than 10 to 15 percent of your ake home pay.

How did you do?

If your income and expenses are equal, with nothing left over at the end of the month, you are living paycheck to paycheck. You need to look at where you can cut expenses so that you can start putting money away for an emergency fund and possibly retirement.

If it turns out you are only paying the minimum on your credit cards and are using credit to live on, you might consider talking to a debt counseling service to help you get back on track. Make sure you use a reliable service -- check with the Better Business Bureau for a referral.

If you have money leftover, you're doing a good job. Make sure you channel those extra funds into an emergency savings account at a bank. It's easiest to have the bank set up automatic transfers for you, or have your employer directly deposit part of your check to your savings. Also check into any 401(k) or other matching savings plans your employer might offer. Funds put into these kinds of savings also reduce your taxable income.

If you are in the negative go through your budget and try to cut the "unfixed" expenses such as clothing, haircuts, gifts, and entertainment. Check with your utility companies to see if you can reduce your bills, and look for less expensive cable and phone services. Sometimes cutting can be painful, however, if you don't make cuts you are going to end up in a financial crisis and it won't be easy to recover.

Sticking to a budget is a responsible way to handle your money -- and the day will come when you'll be glad you've got that emergency fund or retirement tofall back on.

Join the `Move your Money' Movement

Over the past few years we have seen that the biggest banks in America cannot be trusted to behave responsibly with depositors' funds. They made risky investments that resulted in the deepest recession since the Great Depression. They also undermined our housing market with sub-prime lending practices that have resulted in over a million home foreclosures. They accepted a multi-trillion dollar bailout from the government, but still awarded their top executives huge bonuses. They also invested $23 million last year to lobby Congress so they can go on with business as usual, without new regulations that would prevent them from repeating the mistakes that got them into trouble in the first place.

While the rest of the economy suffers from the fallout of high unemployment and low consumer confidence, the big banks search for ways to get around the few new regulations Congress has enacted. When the amount banks can collect from merchants for processing a purchase with a debit card was reduced, for example, Bank of America tried to charge their customers $5 a month to make up the loss of revenues. Big banks continue to charge large fees on credit and checking accounts, and high interest rates on credit.

While I realize I am probably "preaching to the choir," as many of our readers are already Bank of Holland customers, I'd like to encourage you to share your banking choices with your friends and family. Small community banks like ours are the primary source of small business lending, investing in their local communities and increasing job growth. Other tangible benefits are fewer and lower fees, and better interest rates on savings products. With local mergers turning mid-size banks into big banks, and big banks continuing to throw their weight around without taking responsibility for where it lands, this is a prime opportunity for consumers to show their dissatisfaction and make the change to a community bank. In addition to getting a better deal, they'll like the intangible benefit I haven't yet mentioned -- the personal service only a small community bank like the Bank of Holland can provide.

Mark L. Luderman

President/CEO

Practice safe mobile banking

Convenience is the name of the game these days and what could be more convenient than doing your banking on your mobile phone or iPad? These devices have made life a lot easier, but if you don't exercise some caution, they can also make life a little less secure. Just as you use security on your computer, you need to use it on your mobile device. Here are some tips for protecting your personal information:

Don't store information like passwords or social security numbers on your mobile device. Keep the device locked when you aren't using it.

Don't type in sensitive information when others can see what you're doing on the screen.

Log off completely at the end of your mobile banking session. Install mobile security software to protect your phone from viruses and malware.

Respond to notices of updates for the device and any apps you may have by downloading them as soon as possible.

Be careful which apps you download.

Let the bank know right away if you have lost your phone or mobile device.

Watch your accounts on a regular basis and let the bank know immediately if there has been any suspicious activity.

Applying these tips can save you from serious problems in the

future. Take the time to ensure your mobile device is as safe as

possible.

Teach kids money management as they grow

No one is born with an innate sense of how to handle money.

Money management has to be learned, and most children learn

from watching how their parents handle finances.

"Money matters are not generally openly discussed among family and friends, however, it's important to talk about it with your kids," said Laurie Monin, New Accounts/Head Teller, East Aurora. "Share your values and experiences, explain the differences between wants and needs, and talk about budgeting."

Youngsters learn best by doing, so give them some chores and an allowance for doing those chores each week. They should have to save a portion of that allowance, and setting up a savings account at a bank is a good way for them to see how their money can grow.

"Make sure you take them with you to make the deposits so that the whole experience is very hands-on," Monin said. "Also let them see how you pay your bills and save money yourself, so that by the time they reach college they'll be able to manage on their own."

It's very important college students have a budget that includes savings, so that if their car or computer breaks down they can handle the emergency themselves without having to track down Mom or Dad.

"Many students have a limited amount to spend for an entire semester, and they need to limit spending on entertainment and eating out if they're going to make it through. They can have credit cards, but need to understand how to use credit wisely," Monin said. "How you handle credit in college follows you into your adult life."

A bank account is a valuable tool because it helps with budgeting and provides access to services such as check cashing, debit cards, online banking, balance alerts, personal loans, direct deposit, financial education and identity theft protection. Students should also learn to protect their money by being skeptical of anyone who has a scheme for making a quick buck, and of friends who need to borrow money. "

This is the time for youngsters to learn the ropes when it comes to money," Monin said. "There are ways to save such as buying used books instead of new, and using student discounts. "

There's also money available through scholarship funds, although it may take some searching -- but if parents have instilled good values in their children, the kids won't mind taking the time and effort to figure out where they can gain a little income to put toward school, or save on something they have to buy."

Time Warner Classic Rink Public Skate

Friday 7 – 8:50pm • Saturday 1 – 2:50pm, 7 – 8:50pm

Sunday 1 – 2:50pm

41 Riley St., East Aurora, NY 14052

716-628-0036 • www.thinkrink.org

East Aurora Winterfest 2012

February 17th – 26th

Village of East Aurora

Town of Aurora Department of Parks & Recreation

716-652-8866

Arcade Winterfest

February 10th – 12th

Village of Arcade, Arcade, New York 14009