Getting Your Finances Ready for Your Golden Years

The biggest challenge of retirement planning is ensuring that your financial life will be as comfortable and stress-free as possible. Here are a few things Couple Biketo think about as you look ahead to the golden years.

Save, save save. Make the most of your remaining paychecks to save for retirement. How much money you’ll need to set aside for retirement (which, for many people, could last 30 years or more) will depend on a variety of factors. When do you expect to quit working? Will you continue to earn some income part-time? How much money do you have in savings and pensions? And, what kinds of expenses will you incur for housing and health care?

Because the future is uncertain, it makes sense to put as much money as possible while you’re still working – 10 to 20 percent of your annual income, if not more. Also make use of employer-sponsored retirement plans (especially if you’ll receive matching contributions) and tax-advantaged Individual Retirement Accounts (IRAs).

Try to reduce or eliminate debt. “Another way to save more money now for a more enjoyable retirement later is to cut back on unnecessary expenses, especially if you will need to go into debt to pay for them,” said Luke W. Reynolds, Chief of the FDIC’s Community Affairs Outreach Section. Reynolds recommends paying off most or all of your credit card balances and other loans to cut down on interest charges and avoid being burdened with repayment during your retirement years. Develop a plan to stretch your money through a long retirement. “The idea is to determine where your money will come from during retirement, so you won’t have to live in fear of running out of money,” said Susan Boenau, Chief of the FDIC’s Consumer Affairs Section.

For example, consult with the Social Security Administration or your accountant to learn how much Social Security and pension income you’d get each month if you retire early (any time between 62 and your “normal” retirement age) and how much more you would receive if you hold off on retirement. The penalty for starting to collect Social Security payments early can be substantial.

Plan ahead. Discuss with a financial advisor how and when to withdraw money from your tax-deferred retirement accounts, such as employer-sponsored retirement plans and traditional IRAs. Periodically review your retirement portfolio — your mix among stocks, mutual funds, CDs (certificates of deposit), bonds and so on — to be sure it’s well-diversified. And as you get closer to retirement, consider a more conservative investment strategy than in the past so you can avoid losses to principal that could mean having to postpone retirement or struggle financially.

If you do not already have a financial advisor, your local financial institution most likely offers personalized investment services and can work with you based upon your retirement objectives and time frame.

Marriage and Finance

Marriage is a big decision, and it’s made even bigger by the fact that you’ll be merging Young cheerful couple/financesboth your finances and your financial style with another person, likely for the rest of your life. There are a number of things that you’ll want to discuss with your spouse-to-be before tying the knot. Here are some conversations to have and actions to take before saying “I do”.

  • Talk about your attitudes concerning money. Money often is a taboo subject, but you need to have an honest discussion about saving and spending. Do you spend money as “retail therapy”? Do you know how to save? Is saving important to you? How do your attitudes differ from your future spouse’s, if at all?
  • Disclose your assets to each other. What do you own? Do you own anything with someone else, such as a former spouse?
  • Disclose your debts. What do you owe? Have you co-signed a loan for anyone? What is your credit rating?
  • Set joint financial goals. Are you saving for a house, car, children, retirement or all of the above? How much are you going to save each month?
  • Develop a financial plan. How are you going to achieve your goals? Can you live on one salary and save the other?
  • Create a budget. Part of developing a financial plan is keeping track of your monthly spending. Jointly develop a realistic budget that you can follow.
  • Follow your financial plan. Start saving for your goals. It is great to have a plan and budget, but you need to stick with it to succeed.
  • Think ahead. If you have a retirement plan at work, such as a 401(k) or 403(b) plan, and you haven’t done so already, now is the time to sign up. The younger you are when you begin saving, the more time your investments have to grow.
  • Pay your debts. Entering marriage debt-free is a great gift to your spouse.
  • Discuss whether you want or need a prenuptial agreement. What must be included if you decide to have a written agreement?

After the big day has come and gone, there are other things to do to keep your financial house in order, including:

  • Decide who is going to manage the finances day to day. Will one of you organize and pay the bills, or will you split the task?
  • Set up a time to review your budget each month or quarter. Are you staying within the budget? Do you need to make changes?
  • Develop a method to organize your personal documents and retain financial information for your taxes.
  • Review your federal income tax status and decide which filing status is most beneficial.
  • Update your insurance policies, making any necessary changes to your list of beneficiaries.
  • This may be a good time to meet with a financial professional to begin planning for longer-term financial goals such as buying a house or retirement.
  • If you’re not already familiar with investing basics, this is a good time to educate yourselves on the different types of asset classes. How do they work? What ones are best suited to your goals?

Talking to Your Child About Money

Money can be a difficult—and in some cases, almost taboo—topic to discuss wHappy familyith your children, but as a parent, it’s important that you help your children and teenagers develop good financial habits that they can carry with them into adult life.

Here are a few ideas to help get your children thinking about smart saving and spending habits:

Young children

It is never too early to start helping your child develop a healthy respect for money and to help them develop some good financial habits. The practice of using an allowance can be worthwhile if it does the right things.  To teach your youngsters the basics, try the following:

  • Set a weekly allowance to match the age of the child – a five year old gets $5.00.
  • Tie the allowance to some required chores, like setting the table for dinner or keeping their bedroom clean.
  • Divide the allowance into three spending categories: 1/3 for immediate spending, 1/3 saved for some specific near-term purchase (like a small new toy) and 1/3 for a longer-term goal (like a major new toy).


This is often the most difficult time for children to deal with financial issues.  Peer pressure, a desire to have what friends have and the growing realization that they cannot have everything they want and do everything they want can add tension to any conversation about finances.  It is also the time when children can start understanding more involved financial issues and when financial habits are formed.

The allowance approach gets more complicated for teenagers, as the costs of items they want goes up and they are doing more things that cost money.  Now could be the time to discuss how a job could help them afford the things they want.  After-school and summer jobs are an ideal way for children to learn that money is earned, and not something that mom or dad will always provide.  A job can also teach children about responsibility since their employer will be relying on them to be present and punctual.  If an outside job is not possible, consider paying them an hourly rate for more chores and insist they treat it as a job.

Helping your child establish a checking account, or even prepare his or her own tax return will go a long way to helping them understand that money is a serious matter and that someday they responsible for their own financial decisions.  If your child gets a checking account, be sure you teach them how it works and that they must reconcile their account every month.

Keep the conversation going

Be open to discussing finances with your children.  Children are naturally curious about what they see their parents doing and you can turn that curiosity into teaching opportunities.  The conversations must certainly be age appropriate, but when your child sees you writing checks, it’s an ideal time to start talking about the importance of paying bills and balancing your budget.  A question about what it means when the TV news tells what the stock market did can lead to a more serious discussion about money and long-term financial goals.  And a discussion about choosing a college can be an eye-opening experience when your child learns what it costs.

Take advantage of these opportunities and by the time your child is ready to leave home, they will have a foundation to better prepare themselves for their financial future.

Start your children on the path to financial success. When you open a Kids’ Club account for your child at Community Bank, they’ll become a member of our Green Team. As a Green Team member, they’ll receive quarterly newsletters packed with fun activities to encourage healthy financial habits, and they’ll earn rewards for saving money! Stop in to your local branch for more information!

The Importance of Budgeting

So you’re all grown up and earning a steady paycheck—hooray!CoffeeWorker

Now it’s time to consider how you’re spending it.

If you’re trying to lead a better, smarter financial lifestyle, it’s important to understand how you’re using the money that you have. Having a budget for yourself is a simple way to help better manage your income. Tracking your income and expenses each month can shed light on bad spending habits and make you more accountable for where your money goes each month.

You can start a budget using old fashioned pen and paper, or if you’re more technologically inclined, Excel or Microsoft Money can be a good way to go. For smart phone users, there are many apps available like BUDGT or Mint that can help you keep track of your income and expenses from your smart phone.

As you start creating your budget, think about how much control you have over your expenses. Things like rent, taxes and insurance are probably pretty well set. Other expenses, like food, entertainment and gifts are more controllable. Just by thinking about these items, you may be able to find ways to spend less and save more. If nothing else, you can make judgments about which expenses are most important to you.

Generally speaking, a personal budget will enable you to understand where your money comes from and where it goes. With that understanding, you will be in a better position to make informed financial decisions, to monitor your spending and to potentially identify ways to spend less on some items so you have more to spend on more important things or to save.

Creating and maintaining a budget takes commitment, and sticking to your budget takes self-discipline. But remember that there are many different apps and programs available to help with budgeting so that wherever you go, you can take your good financial sense with you!

Ready to get started? Check out this article from Investopedia for more tips on getting started!

Resolution Series: Get Out of Debt

Whether it’s a student loan, a car loan or a credit card, most people have some sort of Young couple calculating their domestic billsdebt hanging over their heads that they’d like to pay off. Take a moment and think about the debt you have. Maybe it’s a home loan or medical expenses. Maybe it’s debt you’ve carried through the holidays that you now need to start paying back. Whatever debt you have, make the resolution this year to tackle it head on! Here are some tips to help you manage your finances and pay off your outstanding debts:

  1. Know what you owe. Listing all of your debts out (along with associated interest rates) will help give you a better understanding of exactly how much money you owe, and might also shed a little light on how you got into debt in the first place. It will also help you prioritize your repayment plan of attack.
  2. Stop spending. If your credit card spending is out of control, stop using your cards immediately. Put together a monthly budget for yourself that will allow you to pay your bills without depending on credit.
  3. Stick to a budget. Budgeting is key to paying off your debt in a timely manner. Planning out your monthly expenses, trimming unnecessary costs wherever possible and holding yourself accountable for making your payments will allow you stay on track and eliminate that debt as quickly as possible.
  4. Attack high-interest debt first. Rank your debts in order from the highest to lowest interest rate. Concentrate on paying down your high-interest debt as quickly as possible; you will save money in the long run.
  5. Find out if a balance transfer is right for you. Transferring a credit card balance can sometimes be a helpful strategy to employ when you’re managing your debt. Card companies typically offer introductory offers of very low or zero-percent interest rates for several months, which can give you time to make payments without worrying about interest accruing faster than you can pay it off. When transferring a balance, be sure to always read the fine print before accepting an offer.

Making the decision to start paying off your debt is the easy part — putting it into practice requires thought, planning and discipline. If you find yourself still struggling to make payments, always be sure to contact your lender or card company before you miss a payment. In many cases, they will be willing to work with you to structure a repayment plan that works for you. 

Learn more about how you can stay debt-free with these tips!

Financial Resolutions: Saving More Money

Financial year 2015Saving money is one of the most common financial resolutions people make, but can also be one of the most difficult to keep. Starting a savings plan takes discipline and yes, some sacrifice. With bills, debt and other monthly expenses to worry about, you may easily find yourself living paycheck to paycheck, with little left over to put away. Still, having savings is incredibly important; you never know when a life-changing event like an employment change, the birth of a child or unexpected illness could occur.

There are countless resources out there to take you step by step through how to meet your savings goals, but to get you started, here are a few quick tips you can start doing today.

Pay yourself first. A good habit to get into is to pay yourself each month as though you were paying a regular monthly bill. Map out your monthly expenses and determine a reasonable amount that you can contribute (remember, anything is better than nothing). Make the first check you write each month to yourself, and hold yourself accountable—just as you wouldn’t skip paying your electric bill, don’t skip out on paying yourself.

Set up an emergency fund. While you may want to save for any number of things, building an emergency fund should be a priority. Try to save three to six month’s salary for emergencies only. This way, you have a financial cushion to help you through anything that life throws your way.

Start using a monthly budget. Keeping a budget to track your monthly expenses is a great financial habit to get into; budgeting will help you see how much you spend each month and where you can cut back. As you identify and eliminate unnecessary expenses, adjust the amount you pay yourself each month. It may not seem like much, but little sacrifices now can make a big difference in the long run!

Saving money is something you should commit to doing for the rest of your life. Establishing these good savings habits now will help you lead a healthier, more prosperous financial life for the years to come!

New Year’s Resolutions

Financial year 2015As the year winds down, many of us begin to think about our New Year’s resolutions.

For some people, a resolution might be working in an extra trip to the gym each week, or agonizing over ways to avoid that extra piece of chocolate cake. But another good (and, some might argue, more painless) option is to commit to improving your financial life. Maybe you’ve always wanted to start saving for retirement but never really had a chance to explore your options, or maybe there’s some debt you’d like to pay off. Think of 2015 as a new start, an opportunity to take control of your financial future and make smarter, better decisions about how to manage your money.

In the spirit of this season of resolutions, we’re kicking off a new blog series that will help you start working toward whatever financial goal you set for yourself this year. Check back every Tuesday in January for tools and tips on everything from saving money to sticking to a budget!

Online Holiday Shopping Tips

If the weather outside is frightful (or if you’re just looking to save some time), online shopping is the way to go for your holiday purchases. The advOnline shopping safetyantages to the online marketplace are many: no lines, no crowds and no multi-store trips to find that one specific toy. As you zoom from Amazon to Etsy and back again, here are some tips to make your holiday shopping as productive and safe as possible:

  • Protect your data

The holiday shopping season always comes with a host of horror stories about identity theft, so when you log on, make sure you take the proper steps to keep your information safe. Shop only through sites you trust and always check that the site is secure. Secure sites typically have URLs that being with “https” instead of “http” on any page where you’re entering card information. Additionally, you should always see a lock icon somewhere in your browser window when you’re on a secure page.

  • Choose credit

When it comes to checkout time, it’s better to use a credit card rather than a debit card for online purchases. Credit cards tend to have a higher level of fraud protection than debit cards, and you are not liable for debt incurred after a credit card is reported lost or stolen. On the other hand, if your debit card information is compromised, your entire bank account balance could be at risk.

  • Keep track of those receipts

Have a designated place (either a physical folder or folder in your email inbox) to keep track of your receipts, payment confirmations and tracking numbers for your purchases. Always be sure to read the fine print with respect to returns; different vendors’ policies will differ where returns and exchanges are concerned.

  • Buy items together to save on shipping

The one obvious downside to online shopping is the cost of shipping. Depending on the site and the shipping option you choose, a reasonably priced item could easily become one that causes you to hesitate at the checkout page. Sites like Amazon offer you the option to bundle items together and ship them in the fewest boxes possible to save you money, and may also offer free shipping when you spend a certain dollar amount. Plan out your shopping in advance to maximize your transactions on each site—it will help you take advantage of these benefits and keep your shipping costs low.

  • Check the dates

Speaking of shipping, pay close attention to the estimated shipping times on your purchases and make sure to leave enough time for things to arrive. Most sites will provide you with a tracking number for your package once it’s shipped.

Remember: Identity theft increases around the holidays, so take extra care when shopping online. Here are some additional safe shopping tips from

Don’t Let the Grinch Steal Your Identity—Seven Tips for Safe Holiday Shopping

While you may be dreaming of a white Christmas, an iIdentityTheftdentity thief may be dreaming of stealing your identity. With higher traffic both in stores and online on retail websites around the holidays, identity theft is known to increase during this time of year. As you prepare to start your holiday shopping, here are a few tips to keep your identity safe:

-When you shop, carry only the cards you plan to use. Keeping some of your cards separate could help minimize the damage if your wallet is stolen.

-Know where your cards are at all times. Shopping in stores around the holidays can be stressful, and it can be easy to lose track of your card when you’re rushing. Make sure your card makes it safely back into your wallet after each transaction, and keep your wallet close.

-Check for evidence of tampering before you use an ATM to obtain cash. Glue and overlays on the card reader are common indicators of tampering. Trust your instincts; if you suspect a machine has been tampered with, consider withdrawing cash somewhere else. Also, remember to protect your PIN from anyone who may try to read it over your shoulder when you’re using an ATM machine or POS terminal.

-Monitor your account activity through online banking and check your monthly statements closely. Your shopping patterns are likely to change around the holidays, which means it’s important to check your statements even more closely than usual to ensure that there are no fraudulent charges. Hold on to your receipts to help you verify your transactions, and contact your financial institution or card provider immediately if you see a charge that you did not make.

-Make sure you’re securely shopping online. If you’re shopping online, make sure your computer has the most up-to-date antivirus software, and that you’re only giving out credit card information on authenticated sites. You can tell whether a site is secure by looking for the prefix “https” before the web address, or a green bar around your search bar when you go to checkout.

-Keep yourself up to date on any large-scale data breaches that occur. Large retail data breaches are becoming more and more commonplace, and it’s impossible to know when the next one will be, or which store will be affected. If a data breach occurs at a store you frequent, be proactive: call or check the store’s website for specific information, and if the situation warrants it, cancel your card and request a new one from your financial institution. Some retailers may offer free credit monitoring services for a limited time after a large-scale breach, but it’s also a good idea to consider making those kinds of services a permanent part of your defense against identity theft.

-Hold off on that social media post. While cyber-crime is a growing threat, you should also protect yourself from the threat of burglary. Refrain from sharing your holiday travel plans with your entire social network; letting the world know you’ll be on vacation for a week could give a prospective burglar a golden opportunity to break into your home.

For more tips on staying safe during your holiday shopping, check out this article from the Washington Post.


Summer Savings Tip: Turn off the lights!

According to the U.S. Department of Energy, the average household dedicates about 5% of its energy budget to lighting.Summer Savings Tip: Turn the lights off

It’s an easy budget to start trimming, and here are tips to get you started:

Make the switch
Switching to energy-efficient lighting is one of the fastest ways to cut your energy bills, and you have lots of choices, including halogen incandescents, compact fluorescent lamps (CFLs) and light-emitting diodes (LEDs). Energy-efficient bulbs may cost more than ones you’re used to, but you’ll save over their lifetime.

Visit Energy Star to find the right light bulbs for your fixtures.

Off vs On
Think twice about that old electricity myth that says it uses more electricity to turn a light back on than it does to keep it on. Today’s basic wisdom suggests that, depending on the type of light, you’re apt to save by turning it off, no matter how short the duration before you’ll be turning it on again.

Time out
Use timers and motion sensors to automatically control the amount of electricity you use. Dimmers also provide savings.

Natural light
Take advantage of daylight by keeping your curtains, blinds or shades open, or using curtains that allow daylight in. When you’re decorating, remember that lighter colors reflect daylight and enhance available natural light in a room.

Crunch the numbers
Curious how much you might save — in terms of dollars or energy — by turning off the lights when you leave the house? It could add up. Check out this breakdown at The Simple Dollar.

Find more tips!
Looking to save even more? Visit websites for your local utilities, including the Southern Maryland Electric Cooperative (SMECO), for more energy saving tips on everything from appliances to heating and cooling.

Is your family good about turning off the lights?