Cheryl Tanenbaum

When is the Right Time to Retire?

Deciding when to retire is a complex question. Many people base this decision around their birthday. The traditional age of retirement is 65 – the U.S. average is actually 63. However, there are many moving parts in this very important decision, a whole host of factors to consider – financial, physical, as well as psychological.

We’ve all had those days when we’d like to hand our boss our resignation letter and sail off into the sunset, leading the carefree life of a retiree. But, this can be a huge mistake if you’re not prepared.

Financial Considerations

  1. Your bank account: According to investment experts, not taking Social Security into account, you’ll need 25 times your annual expenses (the earlier you retire, the more you’ll need).
  2. The Market: The returns on your investments are critical during the first decade of retirement. No one has a crystal ball when it comes to the market, but if the economy is poised for a downturn, it may be wise to delay retirement. This is also the case if your portfolio has taken significant losses in the years leading up to your set retirement date. If this occurs, it may make sense to delay your retirement until your investments have had a chance to recover.
  3. Social Security Benefits: When people plan to retire in their early 60s, typically, a part of their strategy is taking their Social Security retirement benefit at 62 – the earliest claiming age. However, you must keep in mind that this strategy causes a permanent reduction (almost 30 percent) in your benefits compared to what they would be if you waited. People born after 1943 can expect an eight percent increase for each year they wait to claim benefits after full retirement age, with age 70 resulting in the maximum benefit.

    Suze Orman, American author, financial advisor, motivational speaker and television host, strongly advocates waiting until 70 to retire. “Seventy is the new retirement age – not a month or year before,” she exclaims. However, she also adds that if you have a medical condition that prevents you from working or raises the probability that you won’t live into your 80s or 90s, retiring and claiming Social Security earlier may make sense.

  1. Health Care: Recent studies by Fidelity Investments estimate that a 65-year-old couple retiring today will need between $200,000 and $400,000 to cover their health care costs during retirement – above and beyond what Medicare covers. Having additional savings, private insurance or a Medicare supplement policy is an important consideration when deciding when to retire.

Health Considerations

Working longer may better fit into your plans, especially financially, if you are in excellent health and have longevity in your family. However, this is not so if you or your spouse are in poor health. In this case, postponing retirement could mean your opportunities for doing certain things, like traveling, are gone for good. Take an honest look at your health and life expectancy and factor this into your decision about when to retire.

Psychological Considerations 

Another important factor to consider in deciding when or in some cases if you should retire is the psychological impact. You should ask yourself two important questions: 1. Will I be happier and healthier retired or working? 2. Am I psychologically prepared to retire?

Some people enjoy what they do – their jobs give them a sense of meaning and purpose in their lives – and would be lost without this or an activity or passion to replace it. Yet, other people, especially those who find their jobs stressful or unrewarding, are counting the days until retirement.

The key is preparation. Do you have hobbies or interests to fill your time? Have you realistically considered what your life will look like as a retired person?

Many people have unrealistic expectations or ideas of what their retirement lives will look like. They imagine they will take up hobbies, like golf, tennis or playing an instrument. However, being realistic means evaluating your life now…pre-retirement. What are you passionate about or actively involved in now? The probability of developing a passion for something the day after you retire is small.

Studies show that people who have meaningful, purposeful and productive lives live longer. So, the lesson for anyone contemplating retirement is to have a plan for your post-working lives.

As you can see, deciding when to retire isn’t an easy decision. But, by giving it the time and attention it deserves…having a well-thought-out plan…addressing the financial, physical and psychological considerations…you can help ensure your retirement gets off on the right foot.

The Debit Card Advantage

Many people believe the advantages of using a credit card outweigh those of using a debit card. Not so.

Although credit cards are convenient and provide lucrative rewards, they certainly don’t come without risk. Credit cards carry a huge risk of allowing the user to incur high interest debt. A new study by the personal finance website WalletHub reported that U.S. consumers’ total credit card debt exceeded $1 trillion in March of this year. Consumers took on an additional $92.2 billion in debt in 2017, leaving the average household owing $8,600 on credit cards.

According to Dave Ramsey, “America’s trusted voice on money,” consumers shouldn’t fool themselves into thinking that credit cards are the “safe” way to go. “They’ll get you into trouble and force you to make payments,” Ramsey says.

Using cash, although, the safest option when it comes to staying out of debt, doesn’t come without its disadvantages and risks. ATM fees, the risk of loss or theft, and the inconvenience of always having enough money in your wallet means that cash might not be the perfect choice, either.

Here are several advantages of using debit cards.

No Risk of Debt

Credit cards typically allow your spending to be capped at a credit limit, which can be thousands of dollars. When you use a credit card, you’re essentially borrowing money from the card issuer and agreeing to back it back at a later date. The problem occurs when the card user is purchasing something they can’t afford to pay cash for now, or, in many instances, when the bill comes due. Now the credit cardholder is subject to interest, typically at a double-digit rate.  A recent survey reported that the average APR for a new credit card is just short of 17 percent.

Debit cards solve this problem. Since a debit card is directly linked to your bank account, it provides a convenient way to purchase things without incurring debt. You can only spend what’s in your bank account. 

Ease of Tracking Cash Flow 

When using cash, the onus of accounting, so to speak, is on you. You have to manually track your spending either by holding onto every receipt or memorizing what you spend and logging it into your household expense spreadsheet.

Debit cards offer the solution to this. Cash is taken from your bank account today in near real-time when purchases occur. Then, by adding online banking into the mix, you have your up-to-date spending and account balances at your fingertips!

Ease of Acquiring and Maintaining 

An application and a decent credit history are required to obtain a credit card. Consequently, there’s always a chance of being rejected.

This is not the case with a debit card. Anyone that can open a bank account can get a debit card. In fact, today, debit cards are typically included when opening a new account. Even though some banks have added monthly fees to these accounts, there are still many free options out there.

With a debit card, you never have to deal with a monthly bill. You’re issued a monthly statement, via “snail” mail or online (paperless), to review and file away. A credit card requires you to pay a bill every month…and if you don’t make the payment on time, you’ll incur a late fee, a penalty interest rate, and possibly a ding on your credit report.

Eliminate Checks 

Checks can be the slowest way to conduct a transaction. When using a check, you have to wait for it to be deposited before the expense/purchase is reflected in your actual account balance. Unless you balance your checkbook regularly this can be an inconvenience and sometimes a problem…such as an overdraft.

With the swipe of your debit card, the money is taken directly from your checking account. There is no need to keep track of outstanding checks because your available balance is updated, in most cases immediately, with each purchase/payment.

Protection from Fraud and Theft 

Debit cards, unlike cash, offer increased protection in case your wallet is lost or stolen. Debit cards are backed by fraud protection if anyone tries to use your card.

It’s a myth that credit cards have a better track record when it comes to protection. Any debit card carrying the Visa or MasterCard logo has the same policy concerning unauthorized charges that a credit card has.

Today, many financial institutions have started offering additional protection, like the CardValet app, for both debit and credit cards. This app allows you to turn your debit card “off” if it’s lost or stolen. This safeguards against fraud because no purchases can be made/approved when the card is turned “off.” Once you find your card, you can easily turn it back “on” within the app. Many institutions suggest turning your card “off” anytime you’re not using it.

CardValet also alerts you immediately with a notification on your phone of any attempted use of your card. If your card is still “on” and there’s an unauthorized purchase, you can turn it “off” and prevent any further transactions from occurring. You can customize these alert notifications based on your spending habits, transactions and locations. The CardValet app not only offers protection against the fraudulent use of your debit card, it also provides a great way to help you stay on budget.

So, in a nutshell, when making purchases, take the middle ground with debit cards, and enjoy the many benefits over credit and cash.

Budget-Friendly Family Summer Vacations

Summer is well underway.  But, there’s still time to plan an affordable summer getaway the whole family will enjoy.

Whether your family enjoys the great outdoors, relaxing on the beach, an activity-packed destination or a trip that combines it all, here are several great vacation ideas that won’t break the bank.

San Diego, California 

There are tons of family activities in sunny San Diego…from

theme parks, water parks, and family-friendly museums to miles of beautiful beaches. San Diego’s top family attractions include the San Diego Zoo Safari Park, Legoland California and the museums in Balboa Park. The Go San Diego Card offers up to a 50 percent discount on these attractions. 

Yellowstone National Park

Yellowstone National Park offers an array of activities to inspire the entire family. From the park’s renowned geysers, geothermic wonders like Grand Prismatic Spring and Mammoth Hot Springs, this destination is sure to create long-lasting vacation memories. Summer is peak season for hotel rates, but you can drastically reduce this cost by bringing your own tent or RV.

Niagara Falls

Niagara Falls State Park is an adventure-packed experience everyone in your family is sure to love.  Enjoy breathtaking views, miles of hiking trails, fireworks over the falls, and more. This destination offers reasonably priced hotels and attractions…plus a favorable exchange rate if you visit the Canadian side of the falls.

The Outer Banks

The barrier islands off the coast of North Carolina offer relaxation and adventure. The coastline’s quietbeaches are its main draw but the area also affords a multitude of activities for the family including horseback riding, hand gliding, water sports, touring shipwrecks and historical sites such as the Wright Brothers National Memorial.

Branson 

Nestled within the Ozarks in Missouri, this town has become a favorite family vacation destination. Described as a “Disney World Meets Nashville,” this destination offers Silver Dollar City, with its thrilling rides and good, clean fun family atmosphere as well as ample educational opportunities like the Titanic Museum and the Shepherd of the Hills Fish Hatchery. For the music lovers, there are also a variety of performance venues that are sure to entertain the whole family with singing, dancing and music.

Winter Park 

Not only is this Colorado resort town a wonderful family winter destination, it’s great in the summer too. Families can enjoy affordable hotel rates and plenty of fun-packed activities including hiking, biking, horseback riding, rafting, zip lining and the state’s longest alpine slide.

Williamsburg 

Virginia’s colonial Williamsburg offers all the history a family could want. This city appeals to all age groups with nearby Water Country USA and Busch Gardens Williamsburg. Combo tickets are available to reduce costs.

Catskills

This spot in southeast New York offers many ways for families to occupy their vacation time. Just a scenic two hour drive north of New York City, families can hike the Catskill Park, walk through Thomas Cole’s house, paddleboard out to the historic Hudson-Athens lighthouse or fly down the longest, fastest and highest zipline canopy tour in North America. In addition, all-inclusive, family-oriented resorts are available for extra savings…or you could rough it at one of the many local campgrounds. 

Cruising

Cruises are virtually all-inclusive vacations. One price includes accommodations, meals, activities on board the ship, kids programs and entertainment. It’s all included in one price. It’s a great vacation for both parents and kids.

So, before the sun goes down on summer, get planning!

Making This Father’s Day Special

Father’s Day is just around the corner! On June 17, you’ll be expected to set aside a day to spoil Dad. So, let’s get planning to make this Father’s Day extra special!

Traditionally, Father’s Day is a day of breakfast in bed, the perfect card (typically Hallmark) and a carefully selected, but hardly ever worn, tie. But, this year, let’s think a little outside the box. Let’s make it not so much about the perfect store-bought gift but about dedicating this day to something even greater and more memorable.

With this said, here are a few ideas:

  • Make an I.O.U. Book – Celebrate Dad all year long with a homemade I.O.U. book full of coupons for him to cash in anytime. Whether it’s a chore, like cutting the grass for him, or taking him to the movies, he is sure to appreciate the spontaneous gift and reminder of your love and appreciation.
  • Plan a Day of Bonding – Spend the day doing something simple and meaningful that affords that special father-son and/or father-daughter bonding time. Here are several activities that are sure to make lasting memories:
  1. A game of golf or mini golf – Whether Dad is a pro on the golf course or at putt-putt or just an amateur, golfing is a fun activity for dads and kids alike.
  2. Take him to a ball game – America’s favorite pastime always makes for a perfect day. If a pro baseball game is not an option, find a local minor league game to attend.
  3. Go Fishing – Casting a line is a classic and relaxing way to spend bonding time with Dad. Children’s fishing poles are not very expensive…and the memories created far outweigh the cost.
  4. Work on a project together – Is there something Dad has always wanted to do with you? Whether it’s fixing a rusty bike that’s been in the garage for years or a bigger project like building a fort/tree house, Father’s Day is the perfect day to get started.
  5. Take a hike or a long bike ride – Most dads love spending time outdoors. Find a local hiking or walking trail the entire family can enjoy or spend the day cruising around on bikes. As an added treat, bring a picnic lunch/basket filled with dad’s favorite foods.
  • Make Something for Him – A great way to make Dad’s day something really special is to give him something you’ve made, not bought. A memory book is a very personal way to express your love and appreciation for your dad. Your memory book could include photos of you and your dad, from birth to present day, with handwritten notes and memories under each picture. Your memory book could also include a special poem you’ve written for your dad or a heartfelt letter. This gift gives you the perfect opportunity to spend time with your dad and reminisce about the good old days.
  • (Wives) Celebrate Him as a Husband – Father’s Day is not just a day to celebrate Dad as a provider and caregiver for your children. It’s also a day to honor him as your husband. Bring on the praise, verbally or in writing, expressing how much you need him and he means to you as your partner, lover, friend and father.

Whatever you decide to do to celebrate this special day, remember, you don’t have to spend a lot of money on extravagant gifts. Your love and gratitude are the greatest gifts you can give him this Father’s Day!

Small Businesses Make a Big Impact on Our Economy

As we come off of National Small Business Week earlier this month, recognizing entrepreneurs andowners of small businesses, it’s an opportune time to emphasize…provide a better understanding of the impact small businesses have on our national and local economy.

Small businesses play a major role in the U.S. economy. The SBA reports that there are over twenty-seven million small businesses in our country and represent approximately 50 percent of our gross domestic product. The millions of entrepreneurs who have started businesses in our country have had a major impact on the business world, as we know it today.

Small businesses not only contribute to the general economic security of our country, but they also play a key role in the growth and vitality of particular areas of economic and socioeconomic development. Specifically, small businesses assist in the following areas:

Job Creation 

A majority of American workers first entered the business world working for small businesses.  According to the SBA, half of all U.S. adults today are either self-employed or work for businesses that employ less than 500 employees. In addition, small companies hire more frequently and fire more frequently than big companies. This is mostly due to the fact that many small companies are started every year and some are expanding. Regrettably, the survival and expansion rate for small businesses is poor. Fortunately, over time small companies add more jobs than they eliminate.

Provide Opportunities for Women and Minorities 

Small businesses provide the vehicle for many people entering the workforce. Business ownership allows individuals, including women and minorities, the opportunity to achieve financial success as well as provide confidence and pride in their accomplishments. The SBA cites that although the majority of small businesses are still owned by white males, over the last two decades there has been a substantial increase in the number of women-owned and minority-owned businesses.

Small Businesses Complement Big Businesses

Small businesses provide many of the components required by big corporations. For example, the U.S. auto industry relies on almost 2,000 suppliers to fulfill the parts needed to build their cars. Small companies also supply large companies with services such as accounting, legal and insurance. In addition, many small companies outsource themselves to assist large companies with special projects or provide certain business functions.

Small Businesses’ Impact on the Local Community 

Similar to their contribution to the national economy, small businesses also contribute greatly to the growth and innovation of the community in which they are established.  The small business makes a profound local impact in the following ways:

Community Identity 

A community is uniquely recognized in part by its “Main Street.” From the mom-and-pop shops, the local CPA and attorney office to the coffee shop, yoga studio and community bank, small businesses contribute to the look, feel and personality of its community. Many municipalities and tourism boards have prioritized the preservation of the small business, fully valuing the unique character it brings to the vibrancy of the community.

Community Involvement 

Small business entrepreneurs tend to be involved in the community. They often sponsor local Little League teams, donate to local non-profit organizations, join the Chamber of Commerce and participate in local charity events.

Community Health

Because small businesses tend to be people-oriented businesses, their owners help build a sense of community. Small business owners typically build personal relationships with their customers, greeting many of them by name.

Many small businesses come together to form casual or more formal relationships such as merchant’s associations and often provide one-on-one business counseling and mentoring. By doing this, the expertise of the successful small business owner is leveraged to contribute to the overall business community’s long-term success.

Increasing the Tax Base

When local residents patronize small businesses within their community, their tax dollars stay within their community. Similarly, local businesses tend to purchase locally, which pumps more money into their community, helping improve their community and economic development.

Local Jobs

Small businesses create local jobs. This is beneficial because employees work closer to home rather than commute to another city. This also creates ample opportunity for these workers to shop at other local small businesses – grabbing lunch or dinner from local restaurants, running shopping errands on their lunch break – keeping money within their community.

Entrepreneurship 

Small businesses are the consequence of the business owner’s entrepreneurial spirit. The small business owner is taking charge of his or her financial future. America’s economic innovation and prosperity is fueled by entrepreneurialism. It is a key means for U.S. families to move up the economic ladder.

Locally Made Products and Services

One-of-a-kind, locally made goods can attract outside customers to a community, bolstering tourism and contributing to the community’s unique character. Locally made products and services are also attractive to residents who want to support their local businesses and keep their tax dollars in their community.

Supporting our small businesses isn’t just about shopping on Small Business Saturday. Small businesses benefit our national and local economies in many ways. So, the next time you’re heading to a large chain store, remember, shopping local really does matter.

Stress in America

For the first time in a 10-year history of surveys of stress in America, the American Psychological Association survey, conducted in January 2017, found a statistically significant increase in stress levels in the U.S. compared to the previous year.

It appears that Americans are more stressed today than ever.

Whether we’re stressing over financial woes, work, a romantic relationship on the rocks or possibly the latest, breaking, political news story, the anxiety can wreak havoc on our bodies if we can’t get it under control.

We experience stress when we perceive the demands placed on us exceed our ability to cope. Stress can be beneficial at times, motivating us to work hard and get ahead or by providing a necessary boost of drive and energy to help us through certain situations like exams or work deadlines. However, an extreme amount of stress, especially worry over the long haul, can have health consequences, affecting our immune, cardiovascular and neuroendocrine and central nervous system, and cause a severe emotional toll.

The human body’s stress response was made for short-term acute stress such as fleeing immanent danger, like running away from a bear. But, stressors today have become much more chronic and our bodies aren’t equipped to deal with this.

Research shows that each age group…stage of life…has its own common stressors. Findings indicate that people in their 20s are the most stressed out generation of our time.  They’re graduating from college, worrying about college debts, looking for jobs, dating and dealing with constant social media comparisons. 30-somethings are managing a lot of extra responsibilities, both at work, as they climb the career ladder, and at home, as they become parents and homeowners. 40-somethings, also referred to as the “sandwich generation,” are worrying about their growing kids as well as their aging parents. In addition, this group begins contemplating their own immortality. For 50-somethings, planning for retirement as well as an empty nest can be quite jolting.

Coping with Stress:

Understand how we stress. Each of us experiences and manages stress differently. Some things that may be stressful for one person may serve as a trigger for others to become more productive. It’s important for each of us to know what types of situations make us feel different than we do most of the time.

Find healthy ways to manage our stress. This will be unique to each of our personalities. We need to find a healthy, stress-reducing activity that works best for us. It may be exercising, talking things out with a friend or family member, listening to music, writing, or spending downtime with someone special.

Take care of ourselves. At times, we take on more than we can manage. But, no matter how hectic life gets, we must take time for ourselves – even if it’s something simple like curling up on the couch and reading a good book or listening to our favorite music. We must also make sure that we eat right, get enough sleep, drink plenty of water, engage in routine physical activity and take regular vacations or other breaks from work.

Limit time watching or listening to the news. It’s great to be informed, but there’s a difference between getting needed information and becoming obsessed with what’s going on in the world. The news is presented…spun in a dramatic way, which often creates anxiety.

Focus on the aspects of our lives in which we have control. We can’t control a lot of what happens across the country or the world. So, it’s important to work on the aspects of our lives we do have some control over such as how much effort we put into our work, our relationships, our health and even our community.

Reach out for support and take action if needed. It’s not always easy to open up to others about our lives and problems. However, talking to and accepting help from a trusted and supportive family member, friend or even a professional can improve our ability to manage stress as well as change unhealthy behaviors.

File Your Income Taxes Early… Before Someone Else Does It For You

Spring is just around the corner and so is the deadline for filing your 2017 income taxes.

For those of us who haven’t filed our tax return already, this somewhat daunting, annual task is beginning to weigh more heavily on our minds. Many of us are concerned about filing our return correctly, what kind of tax refund or, in some cases, payment we can expect and whether we should do it on our own with an online service or hire an accountant.

But, as we procrastinators begin getting our tax documents together, there’s something else we should keep in mind: tax return fraud.

The IRS launched 1,117 general tax fraud investigations for the fiscal year of 2016. Although this was a decrease from the two prior years, according to IRS, it doesn’t appear that tax scams are ever going away. Unfortunately, with every measure taken by the IRS to prevent this, the schemers/scammers find ways to circumvent it.

Identity theft related tax fraud occurs when an identity thief somehow obtains your name and social security number and uses it to file a fraudulent tax return in your name. This is accomplished in many ways to include phishing emails, snooping through your trash for intact documents containing personal information, hacking into a site/entity that has your personal information, stealing or finding your wallet/purse and public WiFi monitoring.

Once the identity thief has your personal information, they can use this to file fraudulent tax returns with the IRS in order to receive credits or refunds. In most cases, these thieves have the funds distributed via a pre-loaded debit card or direct deposit. This helps them avoid the security measures relating to cashing a paper check.

When this happens, the tax return you file comes under suspicion because it is the second return filed for the same taxpayer. Unfortunately, the burden of proof now lies on you. You will need to send the IRS a Form 14039 (IRS Identity Theft Affidavit). This can be a lengthy process.  If you’re expecting a refund it will not be processed until the IRS confirms your identity, as the actual taxpayer. If you owe taxes, you can be left with resulting collection actions, audits and even aggressive tax collection through the IRS appeals process.

It can become ugly.

But, like many situations in life, an ounce of prevention is worth a pound of cure. Here are several ways to minimize your risk of falling prey to these sinister scams:

  • File Early (okay, this advice is a little late for those of us who haven’t already filed. But, let’s make sure to keep this in mind next year.)

Filing early lowers the chance of someone doing it before you. This turns the tables on the identity thief, as your return will be accepted by the IRS first and their fraudulent return in your name will be denied.

  • Clear Your Email Inbox and Invest in a Shredder

Most identity theft occurs via the trash. All identity thieves need to file a false return is your legal name, date of birth and social security number.  Think of the people you may have mailed or emailed pieces of this information…a W-9 for an employer, a scanned copy of your passport to a travel agency or a completed form to your healthcare provider.

Don’t keep this information in your email in/sent box. In addition, shred any physical/hardcopy documents containing this information.

  • The IRS Will Never Call You…So, Hang Up

Scammers often call under the pretense they are the IRS and you owe money. They may sound totally legitimate, oftentimes giving you a fake badge number and even sharing knowledge that leads you to believe they really know you.

Hang up! The IRS will never call or email you. The IRS only communicates by physical (snail) mail.

  • If Your Credit Card Company or Bank Contacts You, Call Them Back on an Official Number

Identity thieves may pose as representatives from your bank or credit card company. These scammers may be trickier to catch because these types of organizations do sometimes call.

Don’t give out any personal information with inbound requests. Call the organization back using their official customer service number.

  • Don’t Sign a Blank Return 

If a friend asks you to sign a blank return and they will take care of doing your taxes…don’t do it. Sometimes scammers are found in the least expected place…your inner social circle.

  • Beware of Tax Pop-Up Shops

When hiring anyone to do your taxes, especially those “once a year” tax preparation shops, do your homework and make sure they are legitimate.

Although special attention is being given to identity fraud risks during tax season in this article, this should be a year-round concern. Monitoring your credit on a regular basis yourself or through a monitoring service is the best practice to reduce your risk of becoming the victim of an identity thief.

Jargon and Acronyms….They’re everywhere…LOL!

Jargon and Acronyms….They’re everywhere…LOL!

The use of jargon and acronyms has become pervasive in the English language.  Whether used by government (e.g. CIA, NATO, etc.), lawyers (e.g. adjudication, brief, etc.), IT specialists (e.g. SEO, SPAM, etc.) or the younger generation (e.g. TTYL, sick, etc.), today our language has become laden with these professionally, generationally and industry specific dialects.  With the advent of computerization and the internet specifically, the use of jargon and acronyms has increasingly become more widespread in our culture.  So customary, that this lingo has almost become a language of its own – a foreign language for many of us, oftentimes requiring translation.

The use of acronyms and jargon in the financial services industry is not new.  Our industry has always had its own language. Whether you are watching your favorite nightly financial news show or conversing with financial professionals, I’m sure you sometimes feel inundated and somewhat intimidated by our industry’s commonplace use of idioms.

Webster’s Dictionary defines jargon as the language, especially the vocabulary, peculiar to a particular trade, profession or group and acronym as a word formed from the initial letters or groups of letters of the words in the name or phrase.  In a nutshell, the use, most aptly today, the overuse of this language can be quite confusing and leaves many of us exclaiming, “WHAT???”

Although the list of our industry’s acronyms and jargon is fairly exhaustive, I thought I’d dedicate the balance of this article to a few of the most commonly used acronyms in our industry which tend to be the least understood by our customers.  I hope to shed some light and clear up any possible confusion concerning the following popularly used financial acronyms: APR, ARM, AGI, and PMI.

APR – Annual Percentage Rate – This is the annual rate of return made by investing or charged by borrowing, expressed in a single percentage number.  It represents the actual return on money invested or cost of funds when borrowed.  For example, if a credit card company charges 2% a month on your outstanding balance, the APR is 24% (2% x 12 months).  This number differs from APY (Annual Percentage Yield) which takes compound interest into account.

ARM – Adjustable Rate Mortgage – This differs from a fixed rate mortgage in that the interest you pay on the loan balance varies over the life of the loan based on a financial benchmark or index and an additional spread called a margin.  The initial rate is fixed for a period of time.  Then periodically, the interest rate is reset.  For example, if you had a 2/28 ARM, this is a 30 year mortgage, with a fixed rate for the first two years and a floating rate for the remaining 28 years.

AGI – Adjusted Gross Income – This is the “net income” figure used to determine your taxable income.  Your AGI is your gross income minus all allowable deductions (e.g. unreimbursed business expenses, medical expenses, contributions to a deductible retirement plan, etc.).  This net number is computed on page 1 of your federal tax return.

PMI – Private Mortgage Insurance – Many people confuse this insurance with homeowner’s insurance.  This mortgage specific policy is provided by a private mortgage insurer to protect lenders against loss if the borrower defaults on the loan.  Most lenders today require PMI on loans with a loan-to-value (LTV….yet another acronym!) that is more than 80% (a down payment less than 20%).  Although this allows the borrower to put less down, it typically requires an additional premium payment over and above the mortgage payment and possibly an additional monthly fee.

Although the use of jargon and acronyms is most likely not going away any time soon, we must be cautious not overuse them, especially when we are communicating with people outside of our trade or industry.  In our goal to provide excellent service to our customers, the management and staff of Intracoastal Bank make it a priority to always communicate with our customers clearly and concisely.  It doesn’t cost a thing ….just a little time and patience.  B4N! (Bye for Now)

Planning a Memorable Family Summer Vacation without Breaking the Bank

As the last bell rings for the school year and the kids head out the doors gleefully chanting, “No more school,” their cares are left behind and replaced with thoughts of staying up late, sleeping till noon, hanging out at the beach, and just “chillin” with friends.  Unfortunately, for most of us parents, our worries and homework have just begun.  Our once toyed with ideas for this year’s perfect summer family vacation must NOW turn into a planned, scheduled, and booked reality. The struggle for most of us is not the vacation itself, but ultimately providing a memorable experience for the entire family that doesn’t deplete the savings account or burn the numbers off our credit cards.

So, how do we create the perfect blend of quantity and quality, while remaining fiscally responsible?  Actually, it’s easier than we think.  As busy, intelligent, organized overachievers, we tend to overcomplicate and overplan everything, including the family summer hiatus.  So, let’s begin by thinking outside of the proverbial box and get back to some old fashioned basics; the availability of limited technology and the K.I.S.S. principle.

Today’s technology has undermined the true definition of vacation.  Think back to a time when you couldn’t be called, emailed, texted or posted while away from the office or the house. To really allow yourself and your family to take a quality break from everyday modern life and the sophistication that accompanies it, make a family pact to leave technology behind.  Bring one cell phone, designated only for emergencies, and put an “on vacation” voicemail message on the remaining phones and an auto reply on emails.

With technology in check, let’s begin planning a vacation that both our budget and family will love!  This is where the K.I.S.S. principle applies – keep your adventure uncomplicated. The challenge is to find age-appropriate activities that aren’t mind-numbing for adults or boring for kids. The ultimate family vacation choice is one that provides a simple mix of physical activity, education, and sightseeing opportunities.  So, after doing a bit of homework, here are my top three frugal, yet memorable family summer vacation ideas to get you going.

  1. The Road Trip Vacation

Even with higher gas prices, the All-American family road trip is still one of the least expensive options.  Choose an ultimate destination (e.g. Washington D.C., Black Hills, South Dakota, Las Vegas or any of our incredible National Parks) and then plan a route which offers interesting, fun stops along the way.  When making your lodging reservations, don’t forget discounts provided by membership organizations and be sure to ask for budget-conscious deals and/or accommodations where kids stay free.  To reduce food costs, look for restaurants with kid’s menus or where kids eat free. Another option is to book a room with a refrigerator or kitchenette.  By preparing some meals yourself, you can reduce your restaurant costs.  So, grab your GPS, pack a large cooler, stop at grocery stores along the way, sing silly songs, play I Spy and the License Plate Game, watch the sun rise and set, and make some wonderful memories.

  1. The Close to Home Vacation

Living in Florida provides a multitude of day trip opportunities.  Make your home your hub.  Depending on the number of vacation days, take in as many local attractions as possible.  Some great suggestions might include spending the day at one of Florida’s beautiful natural springs, venturing out to an unfamiliar beach spot, a trip to the zoo (I’m partial to the Jacksonville Zoo) or even spending the day at one of your family’s favorite theme or water parks.  There are two important prerequisites to make the close to home vacation an enjoyable one.  First and foremost, remember this is a vacation – have a plan with a predetermined schedule of events.  Remind yourself that memorable family quality time doesn’t include cleaning out closets, landscaping the yard or painting the house. Second, as stated earlier, make a family pact to keep this time technology free.

  1. The Camping Vacation

This can be the traditional camping experience, vacationing at any of the many Florida or National state or private parks or the innovative summer “family camp” programs.  Like summer camps for kids, a “family camp” experience comes complete with beautiful settings, simple lodging, meals, campfires and an assortment of imagination stretching activities. Now if you’re feeling really adventurous, this can be combined with the Road Trip vacation.

Although the Road Trip, the Close to Home, and the Camping vacations are my top picks, I’m sure there are many more great ideas out there.  If you have a personal favorite, let me know – I’d love to hear from you!  In the meantime, remember that family vacations are important.  There’s the quality time spent together away from life’s distractions, the laughter and fun and most importantly, memories that will last a lifetime.  So, start Googling, begin planning, and have a wonderful vacation!

The Hot Bank Technology Trends – Creating the Perfect Blend for Our Customers

As we move into the second quarter of 2012, we see the U. S. community banking industry stepping up their technology budgets.  This movement is a result of the industry trying to capture their future market; the Generation Y (Gen Y) customers (Yurcan, Brian, “8 Bank Technology Trends That Will Shape the Industry in 2012,” www.banktech.com, January 3, 2012).

The Gen Y market, comprising people born between approximately 1979 and 1999, is enormous.  The immensity of this demographic is only outsized by its future earning potential.  This group, made up of approximately 80 million adolescents and young adults, earn approximately $214 billion annually and are expected to earn $3.4 trillion, compared to the estimated $2.8 trillion earnings of the baby boomers by 2018 (Constantine, Greg, “Tapping Into Generation Y: Nine Ways Community Financial Institutions Can Use Technology to Capture Young Customers,” www.firstdata.com, April 2010).

In an effort to meet the growing technological demands of a technologically savvy market and to make banking easier and more convenient for our customers, Intracoastal Bank is initiating several exciting new services in 2012.  Some of these new services include:

  1. A newly installed ATM which will eventually be an automated banking center, allowing transactions to be done 24/7.  Business and Personal customers will be able to make deposits using image technology; no deposit slips or envelopes are needed.  This ATM will allow bulk cash and checks to be deposited.  The machine will add up the checks and cash to be deposited and confirm that this number matches what the customer enters.  The customer will receive a receipt of their transaction with images of all checks deposited for their records.  This machine is so smart that it can even detect counterfeit bills and will reject them.
  1. A new and improved Mobiliti Banking. We currently offer mobile banking, but we are taking it to a whole new level.  There will be 3 ways to access the mobile banking feature: text messages, website or by downloading an app to your phone. Besides checking account balances, making transfers and looking at account history, customers will be able to pay bills with their smart phones.
  1. The addition of Account Create to our website.  This allows new and existing customers the opportunity to open accounts 24/7. This new service alleviates having to come into the bank during designated hours to set up an account.
  1. The addition of LinkLive to our website.  This gives our customers the opportunity to have online chats with our Personal Bankers when they have questions.  This program also allows our Personal Bankers to view a customer’s desktop in order to assist them with their online banking issues.