Friday, May 17, 2019

Financial Spring Cleaning

McHenry, Illinois

Spring has sprung! As the sun returns and the temperatures rise you see them…salt stains in the mud room, an intimidating colony of dust bunnies in the hallway, and something nearly unidentifiable just under the fridge. You put on your rubber gloves, blast some music, and grab your arsenal of cleaning products. It’s time to spring clean. Certain things need to be tidied up each spring but might not be so obvious. There’s no dust, dog hair, or debris gathered on your finances; but that doesn’t mean they couldn’t use a good clean-up. Here are 5 ways that the American Bankers Association (ABA)  encourages consumers to get organized with their finances.

Evaluate Your Debt
Reevaluate your payment plan and increase payment size if possible to reduce the amount of interest paid over time.

Review/ Update Your Budget
Did you get a new job this year? Did you have a child? These are all life changes that impact your family budget. Develop a spending/saving strategy and stick to it. Come next spring, you’ll be happy you did.

Check Your Credit Report
You are eligible for one free credit report from each of the 3 credit bureaus. Screen these reports for any mistakes that could jeopardize your credit score or ability to receive a loan.

Download Your Bank’s Mobile App
Most banks have some form of mobile application. By having your finances in the palm of your hand, you can quickly and easily transfer funds, deposit a check, or check your balance. You may also opt to go paperless by receiving an e-Statement each month as opposed to a paper copy. This will keep you informed while keeping more paper clutter from entering your home.

Pay Your Bills Automatically
There’s no sense in jeopardizing your credit score over a forgotten bill payment. Set up autopay for recurring expenses like car payments, insurance payments, and bills. The money will be automatically deducted from your checking or savings account on the same day each month.

Need help cleaning up your finances? McHenry Savings Bank is a full-service financial institution with personal, commercial, and investment services. Visit our website, or call us at (815) 385-3000 for more information. Our Personal Bankers are available to help you meet your financial goals!

Friday, April 26, 2019

Everything You Need to Know About IRA and 401K Rollovers

Planning for retirement? Then you’ve probably heard of or started a 401k. One of the biggest ways to save for retirement is to invest part of your income into a retirement plan like a 401k. Employers will offer a 401k match to encourage you to contribute to that plan. What happens when you leave that company? You may need to do a 401k rollover. Below is a quick guide to a few options when it comes to planning for your retirement.

McHenry Savings Bank investing
What is a 401k?
It’s a retirement savings plan which most people start contributing to through an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out and often times the company will match a certain percentage.

What is the difference between a 401k and IRA?
The quick-and-easy difference between retirement funds is that a 401K plan will be managed by a company’s administrator, choosing the mutual funds and other investments that are available to you and setting the rules about withdrawals. An IRA puts you in charge, giving you more options for investments to choose from.

What is a 401k-to-IRA rollover?
This is when you move money from a 401k to an IRA. No taxes need to be paid when you do a direct rollover to a Traditional IRA. Simply put, your money and assets just move from one type of account to another and keep all the tax benefits the same.

Should you rollover?
Here are three things to consider when deciding if you should do a rollover:
1. The fees
2. The quality of investments in your 401k compared to an IRA
3. The rules of the 401k plans when switching to a new job

If you let your money in your old 401k sit in the old account, it could cost you tens of thousands of retirement dollars if the new plan at the new job is better. But if you have a high quality 401k plan currently, you may want to leave your money to continue building.

If you are young, you should consider setting up a rollover strategy. If you change jobs a few times, consolidating your savings by rolling them into a single IRA plan will make it easier to manage your retirement money. If you need help setting up an IRA plan, McHenry Savings Bank is here to help you.

When it comes to all your financial needs, visit McHenry Savings Bank and learn how you can save or speak with an expert today by calling 815-385-3000.

Thursday, March 28, 2019

7 Worthwhile Ways to Use Your Tax Refund


According to the Internal Revenue Service, more than 70 percent of the nation’s taxpayers received a tax refund averaging nearly $3,000 in 2017 and received a similar amount in 2018. As Americans receive their refunds along with additional benefits coming from the Tax Cuts and Jobs Act passed in December of 2017, McHenry Savings Bank has highlighted seven tips to help people use their money wisely.

“Tax season is the perfect time to hit the reset button on your finances,” said Jim Zak, Vice President of Retail and Small Business. “Your refund can help put you on the right path towards reaching your financial goals. Consider using it to pay off debts or creating an emergency fund.”

To help consumers make the most out of their money, McHenry Savings Bank has highlighted the following tips:
  • Save for emergencies. More than 60 percent of Americans are not prepared for unexpected expenses. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
  • Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement, your child’s education or future health expenses. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. MSB can help set up an IRA, while a 401(k) is employer-sponsored. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account. MSB has Money Market accounts, Certificates of Deposits and Health Savings Accounts to fit your needs.
  • Pay down your mortgage or student loans. Make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans. Be sure to inform your lender that your extra payments should be applied to principal, not interest.
  • Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bond to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
  • Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term – and with tax credits (as long as Congress continues to renew the program).
  • Donate to charity. The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.
McHenry Savings Bank also stresses the importance of lower-income workers filing a tax return—even if their income is too low to trigger any federal tax liability—in order to potentially claim the Earned Income Tax Credit (EITC). Depending on a recipient’s income, marital status and number of children, the EITC can result in a refund of up to $6,318 to help taxpayers achieve their financial goals. Contact McHenry Savings Bank today at 815-385-3000 to learn more about offered products and services that you can use, like Personal Finance Manager, to help meet your financial goals.

McHenry Savings Bank is a community bank located in McHenry County with locations in McHenry, Richmond, and Johnsburg. Please visit the website at www.mchenrysavings.com or like and follow on Facebook, Linked In or Twitter.

Wednesday, February 27, 2019

Markets: A Ticker Tape of Emotions

McHenry Investments

Remember when learning the latest stock prices meant sitting down and reading a newspaper? Newspapers, printed daily, gave out blocks of information every 24-hours. To learn the most recent stock price, one had to wait for the next newspaper to come out. Few people want to return to reading newspapers to receive their financial information. The majority of us prefer to read prices online, yet newspapers sure beat the anxiety that often accompanies the minute-by-minute volatile stock market fluctuations. Then how do you deal with those fluctuations that often send us into a financial tizzy? Don’t panic with a stock market correction. According to the Motley Fool, a stock market correction is determined as a drop of at least 10% from a recent high price.


Corrections happen a lot
When financial planners build portfolios they base it on science vs. behavioral biases. Planners expect that 25% of calendar quarters will have a negative return. They offset this by controlling the size of the negative returns, selecting a strategic mix of investments that neither have a potential for high returns, nor a risk of low returns. This is commonly known as Diversification.

Corrections usually don’t last
With research conducted on the Dow between 1945 and 2017, John Prestbo at MarketWatch determined the typical correction (averaged to be 13.3%) only lasted 71.6 trading days. To us everyday people, that means 14 calendar weeks.

Resist the urge to sell off and ride the financial wave.
First, most of us do not have the discipline to stay with a winning investment guidebook. But we also tend to make the transaction at the very wrong time, leading to larger losses.

McHenry Stocks

Keep an eye on long-term investments.
If you are a short-term trader, corrections matter. However, most of us are thinking about retirement as a long term goal. That said, keep your eyes on more conservative courses like your 401K (which we hope you are optimizing with employer match contributions). Along with your 401K, consider our retirement plans, look into ROTH, Traditional, Education, & SEP IRA's. Certificates of deposit also hold promise, with maturities ranging from six months to five years.

We don’t have a crystal ball.
It is obvious that we can’t predict the future, but some of us need to be reminded of this fact. Corrections happen at any time, without warning and are caused by a variety of issues. One example is the knowledge that the Great Recession landed when the housing bubble popped and this caused the subprime mortgage crisis. How many fortune tellers in 2006 predicting this?

Don’t think that you are alone when it comes to preparing for your future. Visit McHenry County Investment Services located in MSB's McHenry Office or click here: https://www.mchenrysavings.com/Services/mcis.html to learn about investments, tools and resources offered to help you save up for a better tomorrow. Please call to make your appointment today! (815) 331-6464.




Sources:
https://www.thebalance.com/how-to-handle-stock-market-corrections-2388309

Thursday, January 24, 2019

Tips to a Healthier Savings Account

Saving Account Tips

If you made a New Year’s resolution to grow your savings account, you are not alone. However, it can be difficult to go from happy holiday spending to learning to actually save and grow your money. The good news is that by taking a few simple steps, you can grow your savings while creating better habits when it comes to your financial health.

McHenry Savings Accounts
Set a Personal Budget 
Creating a personal budget will help you to map out your finances and work out where your money is going. It’s important to live within your means and not spend more than you earn. Start by tracking your monthly spending and see how it compares to your earnings by using McHenry Savings Bank (“MSB”) eBanking Personal Finance Manager. Then, set a budget to help you stay in the black. If you need additional help, try using this MSB’s Budget Percent Calculator.

Stay Focused on SMART Money Goals
Savings Account TipsPeople tend to be more enthusiastic about their new savings goals and spending plans early in the year, but a very small percentage of resolution makers actually keep it up. Writing down money goals - and even representing them visually - can keep the motivation going. For instance, if you want to save money for travel, keep pictures of your prospective dream vacation at hand and pull them out whenever you’re tempted to buy something you don’t really need.

SMART goals must be Specific, Measurable, Attainable, Realistic, and Time-sensitive. For example, rather than setting an ambiguous goal, like "save more money," make it SMART by aiming to save an extra $3,000 for emergencies by the end of the year. Work out how much you need to save each paycheck to reach your goal with MSB’s Savings Goal Calculator.

Be Patient
Make the most out of 2019 and better your financial life. Just remember that saving money takes time, and you might not see the effects rights away. Don’t get discouraged! Putting in an effort to develop solid habits will help you follow through with your savings goals - even after the excitement of the New Year has worn off.

MSB can provide you with the right product to help you meet your short-term and long-term financial needs. Now is a great time to save for Christmas 2019 with our Christmas Club Savings Account. This account earns interest, you can deposit as much as you like, and at the end of October you will be sent a check with the money you have saved plus interest earned…. Just in time for holiday shopping.

If you are looking to earn more interest on your money, Certificates of Deposit and Money Market Accounts are also a great addition to your financial portfolio. Visit McHenry Savings Bank to for more information on our savings products so or call 815-385-3000 to speak with personal banker today.  Make sure to LIKE us on Facebook and stay up-to-date on current events, blogs, and specials. 



Sources:
https://www.mchenrysavings.com/index.html
https://www.thebalance.com/how-to-budget-and-save-money-in-5-easy-steps-4056838
https://blog.mint.com/saving/the-minimalist-guide-to-budgeting-in-your-20s-072016/
https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money

Monday, December 24, 2018

Why You Should Consider Money Markets in 2019

Money Markets

When you're considering how to invest your money, it's normal to be a little hesitant or unsure. Stocks and bonds can offer some excellent growth opportunities, but investment doesn't come without risk. Money market accounts are a happy medium by putting money somewhere and seeing it grow without high risk and with a great deal of safety.

What are Money Market accounts?
A money market account is an interest-bearing account that typically pays a higher interest rate than a savings account and which provides the account holder with limited check-writing and/or ACH ability. Money market accounts offer the account holder benefits typical of both savings and checking accounts. This type of account is likely to require a higher balance than a savings account.

What are the other benefits?

FDIC Insurance. The Federal Deposit Insurance Corporation (FDIC) insures deposits and the interest accrued up to the maximum amount allowed by law- currently $250,000 for a single owner. FDIC insurance protects the money in your money market account the same way it does in regular savings accounts.

Money Market Options

Money markets are a great home for emergency savings, something you can access immediately. One way to think of a money market account is to think of it as less liquid than a checking account, but more liquid than bonds or Certificates of Deposits.

What is MSB offering for Money Markets?
Currently, MSB offers a regular Money Market Account ($1,000 to open) and an Indexed Money Market Account ($10,000 to open) for both consumers and business customers. Interest earned on either of these accounts is based on account balance tiers. Interest is calculated and paid on the entire balance in your account. In the Indexed Money Market Account, interest rate is based on the weekly average 4-week Treasury Bill secondary market rate Constant Maturity Treasury Rate (“CMT”) as published by the Federal Reserve in their H.15 Release located at their website www.federalreserve.gov/release/h15. Interest compounded daily and credited to account monthly. Transaction limitations in both Money Market accounts will apply and fees may reduce earnings.


At McHenry Savings Bank, we are a full service financial institution with a complete line of deposit and loan products. We have been serving the banking needs of the residents of McHenry County since 1955. We are local people making local decisions. Call us (815) 385-3000.

Sources:

http://money.howstuffworks.com/personal-finance/financial-planning/money-market-accounts.htm
https://www.investopedia.com/terms/m/moneymarketaccount.asp 
https://finance.zacks.com/advantages-disadvantages-money-market-accounts-2170.html 

Friday, November 9, 2018

The Benefits of VA Housing Loans

veteran housing

With the housing market in northern Illinois fluctuating in 2018, now is the perfect time for veterans to research the benefits of our VA housing loans. The VA home loan program was created in 1944 as a way to thank our troops returning home from WWII. VA Home Loans are provided by private lenders, such as mortgage companies and banks, and the VA guarantees a portion of the loan for veterans, enabling the lender to provide more favorable terms for the loan.

VA house loan

So what are the benefits associated with the VA housing loans? Below are just some of the ways the VA and lenders like McHenry Savings Banks show their appreciation for veterans.

  • No monthly mortgage insurance.
  • One of the considerable hurdles for first-time homeowners is worrying about the down payment. With a VA housing loan, there’s no down payment. 
  • Limitation on buyer's closing costs. Sellers can pay all of a buyer’s loan-related closing costs and up to 4 percent in concessions.
  • Since the VA guarantees a portion of every VA loan, financial institutions can offer lower interest rates to VA borrowers that are typically 0.5 to 1 percent lower than conventional interest rates. Rates are based on the inherent risk assumed by the lender to finance the loan. On a 30-year $250,000 loan, the difference between paying a 4 percent and 4.75 percent rate can mean approximately $40,000 in savings over the life of the loan.
  • Because homeowners are able to save a considerable amount of money paying off their loans early, prepayment penalties were created to protect lenders and investors from the financial loss of losing years and years of interest payments on issued loans. Fortunately for VA borrowers, there are no prepayment penalties to worry about—you can pay off your VA loan early with no fear of getting penalized. This is a huge benefit and makes VA loans so desirable. 
  • No credit score apprehension. Veterans don’t need anything near perfect credit to secure home financing at competitive interest rates despite the relaxed credit score requirements. VA loans are also more forgiving when it comes to bouncing back after a bankruptcy, foreclosure or short sale.

Veteran Housing Loan

McHenry Savings Bank has been serving the banking needs of the residents of McHenry County since 1955. We encourage veterans to research VA loans and visit one of our local branches where we can further explain the process. This Veterans Day, Give McHenry Savings Bank a call at (815) 385-3000 or visit our website to learn more about our VA loans.


Sources:
https://www.veteransunited.com/valoans/seven-decades-success-history-va-home-loan/
https://www.benefits.va.gov/homeloans/
https://www.valoans.com/purchase/va-loan-benefits/
https://www.benefits.va.gov/HOMELOANS/purchaseco_eligibility.asp