Monthly Archives: December 2021

Dec 18 2021

SELECTING AN ONLINE BANK

More and more bank customers are using online financial-service providers. Online-only (digital) banks provide traditional financial services in an online format.  FinTech companies (neobanks) offer innovative banking services with an emphasis on emerging technology, often through apps.

When deciding which online bank to use, consider these factors:

  • FDIC Insurance, Federal Deposit Insurance Corporation (FDIC) covers deposit accounts against bank failure up to $250,000 per depositor and type of ownership category. To determine if a bank is protected by the FDIC, go to https://banks.data.fdic.gov/bankfind-suite/bankfind
  • Fee-free ATMs, to avoid costly charges. Many online banks have an extensive network of ATMs, while others do not have ATM access.
  • High-yield savings accounts, with lower operating costs many online banks offer savings accounts with higher yields. Be sure to compare the rates, rules, and regulations at various online banks, such as the required minimum deposit and minimum balance. 
  • Multiple banking products, depending on your goals and needs, you might choose a bank that offers an array of financial services–checking, saving, CDs, debit card, ATMs, credit card, and loans.
  • Financial management tools, FinTech apps and online banks offer innovative financial planning tools to help you save money, such as with a round-up savings component, automatic savings deposits, and low-cost investment funds. Other apps include features for achieving goals to pay off debts or save for a vacation, or savings based on your spending patterns.
  • Investment guidance, robo-advisors provide portfolio suggestions based on financial goals and risk tolerance with the use of artificial intelligence. 

For additional information on selecting an online bank, click here.

Teaching Suggestions

  • Have students talk to others to learn about factors that were considered when selecting a bank or other financial-service provider.
  • Have students create a visual proposal (poster, slide presentation, or other format) to highlight the main factors to consider when selecting an online bank.

Discussion Questions 

  1. What online banking features could help a person improve their financial position?
  2. Describe actions a person might take to select an online bank. 
Dec 4 2021

END-OF-YEAR MONEY CHECKLIST

As we approach the end of the year, consider these actions to help create the foundation for financial success in 2022:

  • Review spending for the year. Comparing your actual spending with budgeted amounts will help you plan spending for the coming year. For the upcoming year, track spending with an app, spreadsheet file, Google doc, or a written record.
  • Use flexible spending account funds.  Be sure to spend any money in a flexible spending account on qualified medical expenses before the end of the year, or those funds might be lost. However, due to COVID-19, you may be allowed to roll over the full balance into next year. Contact your benefits department to see if you qualify.  
  • Donate to charity. This will not only create a tax saving, but will also help people in your community and around the world.
  • Create a backup plan. Review the beneficiaries on your financial accounts. You should have a durable power of attorney to handle your financial activities if you are not able to do so.  A health-care proxy (power of attorney) is someone to speak on your behalf regarding medical care when you are not able to do so. A will sets how your assets will be distributed after you die.
  • Consider increased retirement contributions. With increased limits for 2022, plan to increase the amount set aside for long-term financial security while reducing current taxes.
  • Conduct a life audit.  Start with identifying your short-term and long-term goals with sticky notes or index cards.  Then, sort your goals by category, such as personal development, work/career, financial, travel, family, community service, and health. Next, organize within a category based on time of accomplishment, which might include: now/soon, always/everyday, later this year, the next year or two, and someday. Take photos of your notes, place them in a visible location, or use an app such as OneNote as a reminder of these targets. Finally, reflect on your goals by determining why you have certain goals and what actions you need to take. Be sure to set deadlines. Also consider how your goals relate to the type of life you desire for yourself.  Do your goals reflect your beliefs, values, work situation, and personal relationships?

For additional information on year-end financial planning, click here.

Teaching Suggestions

  • Have students talk to others about recommended financial actions to take before the end of the year.
  • Have students create an action plan and timeline for a specific goal.

Discussion Questions 

  1. What attitudes, behaviors, and circumstances might restrict a person from taking certain year-end actions?
  2. Describe information sources and personal contacts that might be used to obtain guidance for achieving a specific goal.