Money Minute: Which documents to keep and which to shred

Important Financial Documents: How Long Should You Keep Them?
• When you receive financial documents, what do you typically do? Some collect everything in an ever-growing pile of paperwork while others may elect to toss them in the trash or send them through the shredder.
• However, neither is ideal as there are some important financial documents you should hold onto in a safe and secure place.

• Pay Stubs
o It's safe to say that the majority of people are paid every two weeks. That means that throughout the year, you're likely to accumulate a lot of pay stubs. If the money hits your account, do you really need to keep your pay stubs? The answer is yes, for at least a year. Keep your pay stub records for the calendar year and make sure that it syncs with what's on your W-2. If everything lines up, you can shred your pay stubs after a year.
o Alternatively, you might be able to opt for electronic delivery through your work. That way your pay stubs will be stored securely by your company and will be easily accessible when you need them.

• Bank Statements
o You should keep your monthly bank statements for at least a year as well. Bank statements are a good way to prove your income for things like applying for a new apartment. It's also good to have for tax time, just in case you need to comb through your records.

• Credit Card Statements
o Keep your credit card statements for one month or until the next one arrives, this can be helpful in case you need to go back through and make sure everything is correct. If there are no errors and everything looks good, you can shred it when your next statement arrives.

• Utility Bills
o You might have various utility bills throughout the month. You can stash those away for at least one month until the next statement arrives. Again, make sure that everything looks good and there are no mistakes. When your next statement comes in, you can shred your old utility bills.

• Receipts
o Do you really need to keep receipts? Some crumple receipts up and toss them in the trash. But if you want to be especially diligent, it can be a good idea to keep them for a month. This way you can match them to your credit or debit card transactions and ensure everything is correct. If you're making a big purchase or purchasing something you might need to return, keep the receipt indefinitely.

• Tax Return
o Tax time can produce a lot of paperwork. While you might want to be done with all of that paperwork once you've filed, you'll want to keep your tax returns and all relevant paperwork for seven years. The IRS typically uses a window of three years for any audits, so having your previous paperwork is a must.

• Confirmations
o If you get a confirmation about any debt paid in full, consider keeping them. You should also keep all documents related to purchasing your house.

Additional online resources from KeyBank:

Important Financial Documents: How Long Should You Keep Them?

Five Easy Ways to Securely Store Documents with Key Wealth Direction® Vault

Declutter Your Mind by Decluttering Your Home

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Getting out of credit card debt
• The average New York resident carried a $3,710 credit card balance in 2017, about $600 more than the national average, according to a report from the state Comptroller's Office. Here are some tips to help get you out from under your debt.

• If you have existing high-interest credit card debt, it's in your best interest to open a balance transfer credit card with a low- or no-interest teaser rate, transfer the high-interest balance, and pay it down over the course of several months. As long as you pay off the balance before the regular rate kicks in, you'll greatly reduce the cost of carrying the debt.

• Consider Setting a Monthly Spending Limit
o This is a more specific approach that takes the "pay your balance in full each month" strategy one step further. Setting a strict monthly spending limit that's well within your budget increases the chances that you'll actually be able to zero out your monthly balance and avoid interest charges.

• Set up Spending and Security Alerts
o KeyBank’s HelloWallet tool can help with this. If you're worried about controlling your credit card spending, set up customized spending alerts that let you know when you've made an abnormally large payment or exceed a certain balance threshold. Pair these informational alerts with security alerts designed to flag potentially fraudulent spending patterns.

Additional online resources from KeyBank:

Pay Off Credit Card Debt Calculator

5 Tips to Manage Credit Card Spending

How to Raise Your Credit Score by Paying Off Debt 

Take Control with Debt Consolidation

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

How to Qualify for an FHA Loan
• The federal government created the FHA loan program to improve housing standards, stabilize the mortgage market, and to help make mortgages more affordable and accessible. If you want to purchase a home but aren't sure if you have the means to do so, here's what you need to know in order to qualify for an FHA loan.

• When an FHA Loan Makes Sense
o An FHA loan is a good option for anyone who may be worried their credit score or funds for a down payment won't be enough for a traditional loan. However, your rate may differ depending on your exact credit history.
o Borrowers who have low incomes may also want to consider an FHA loan because there may be more flexibility in terms of debt to income ratios compared to traditional mortgages. Interest rates for an FHA tend to be lower than traditional mortgages, helping you lower your monthly payment and overall loan costs.
o Even if you have great credit, an FHA loan may make sense if you can't afford to put much toward your down payment. While some traditional mortgages may require as much as a 20 percent down payment, FHA allows for as little as 3.5 percent for down payment. For first time home buyers, this could work in your favor by allowing you to redirect cash to other housing expenses.

• Qualifying for an FHA Loan
o To qualify for an FHA loan, you may need a certain credit score as well as a steady employment history, which you can prove through tax returns and pay stubs. A lender will use this to look at what percentage of your pay will go toward housing-related expenses.
o As for the property itself, you can only take out a loan if you're the primary occupant. You'll need to have the property appraised by someone who has been approved by the HUD. The appraiser will check to see if the house meets certain standards. If not, the seller needs to agree to the required repairs, or you'll need to take care of them prior to closing.
o To find a list of updated requirements, check with the Federal Housing Authority or a mortgage lender, such as KeyBank, that offers FHA loans.

• How It Compares
o An FHA loan is great because you don't need a large down payment or a perfect credit score; however, you will be required to pay for mortgage insurance. Mortgage Insurance Premiums (MIP) help protect the loan investor against loss in the event that the borrower defaults on their mortgage. You'll have to make multiple payments: one that you pay upfront during closing as well as an annual premium within your periodic mortgage payment. Unlike traditional mortgages, you may not be able to terminate this mortgage insurance, depending on various factors including your down payment.
o While this will give you a better understanding of what an FHA loan entails, you'll still want to do your research and calculate the costs before diving head-first into a purchase financed by an FHA loan.

Additional online resources from KeyBank:

Federal Housing Authority (FHA) Home Loans

How to Qualify for an FHA Loan

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Small Business Seminar
• The African American KeyBank Business Impact and Networking Group will host a free Small Business Seminar as part of Juneteenth’s 2018 Sankofa Days Celebration.
• The seminar will take place on Tuesday June 12th at 5:30 p.m. at the Main Street Gallery located at 515 Main Street in Buffalo
• Panelists will provide information and resources to current and aspiring minority and women business owners.

• Panelists include:
o KeyBank
o Pathstone Business Enterprise Center
o Excelsior Growth Fund
o JumpStart
o Minority and Women Business Enterprise
o Food and beverages will be provided

• For more information, email AAKBING_Buffalo@keybank.com

Budgeting for Summer Childcare

• Before you know it, the kids will burst through their school's doors for the last time — ready to start their summer vacation. Take the time to start thinking about your kid's summer childcare now, so you're not caught off guard.

• But don't fret — with a little help, you can wade through the childcare options and figure out how to budget for the one that best fits your family's needs.

• Choosing the Right Kind of Care
• Rather than thinking about what your budget can handle and starting there, let's focus first on what kind of childcare you're looking for.
• Factors to keep in mind when searching for your perfect childcare solution include the location of the facility, the schedule of care and whether or not it fits your working schedule needs, the reputation of care and the right ratio of caretaker to kids that you're looking for.

• Different kinds of summer childcare include:
  • Family Help: Oftentimes your best, and first, childcare option can be a loving relative.
  • Babysitting Co-op: Luckily, you're not the only family looking for the right kind of summer childcare. Seek out other families and join babysitting co-ops near you where each family is responsible for providing part of the care and the system runs for free.
  • Nanny Share: A nanny share allows you and a few other moms to create a summer camp-like experience by hiring one nanny across several families.
  • Summer Day/Night Camps: Summer camps can offer deeper learning in your child's particular subject of interest. Use the American Camp Associations' (ACA) camp finder to help with your search.
  • Full-on Help/Daycare: You could look into hiring a full-time nanny through the summer. This would give your child one-on-one attention.
  • Hybrid Approach: Perhaps you want to sign up for two to three weeklong summer camps, but then your parents can pitch in to help with the rest. Or maybe you just need to pay for a nanny during the time in between the camps you've signed up for, and then you and your partner can stagger vacation weeks to get you through the summer.

• Here's how to budget:
  • Research the Price: First and foremost, you need to know how much money your childcare option will cost, including tax discount on the overall cost. Do you qualify for state-funded help with paying for your childcare?
  • Figure out How Much You'll Need to Save up: Now that you know the remaining total amount of money you'll need to save up for, you need to figure out how much money per month you have to save. Find this by dividing the total amount left that you need to save by the number of months left until payments are due.

• After going through these steps, perhaps you've found that you are coming up a little short. In this case, you'll want to check out alternative ways to still afford the summer childcare you want and need. Using the tools and resources above, you've got the power to make this year's summer vacation the best ever!

Additional online resources from KeyBank:

Budgeting for Summer Childcare

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Insider Tips for Buying a New Home
• It’s homebuying season! Buying a new home can be the experience of a lifetime, and nothing compares to the thrill of finding your perfect house. But people often let their emotions lead, and sometimes impulsiveness can make buying a home a little difficult. Here are some tips to help you score your ideal new home.

• Manage Your Credit Score
Avoid opening new credit cards or taking out loans for three to six months before you apply for a mortgage. That includes co-signing loans for someone else. All can affect your credit score, and you don't want to raise any red flags when trying to finance your house. Request copies of your credit report to verify that there are no errors and work on paying the full balance or, at least, more than the minimum each month to help improve your credit score.

• Know the Difference Between Pre-qualified and Pre-approved
Pre-qualification is often the first official step in buying a new home and can sometimes be a requirement to complete before a real estate agent will agree to work with you. However, the pre-qualification number isn't a formal commitment to lend a certain amount, especially if there's no formal application. It's more of a snapshot of your finances that gives you a better idea of what kind of mortgage is within your reach. Keep in mind that the information in the pre-qualification letter will only include the information that you've shared with your lender; nonetheless, it is an important factor. It's often beneficial to use a calculator to help plan your budget and finances for your pending pre-qualification.
Preapprovals involve a more complex than pre-qualification and are based on verified information. The lender will run a full credit and financial analysis, including work history, tax returns, debt repayment history, savings, and other assets.
• Review Your Property Survey and Inspection
Property surveys reveal important information about exactly how much of the yard you'll own, any improvements or changes that have been made, and potential obstacles you'll face as the owner. For instance, if you plan to build a workshop in your backyard or make other significant additions, you want to be certain where your property ends and what your rights include. Make sure that you know who owns the fencing, whether driveways are shared, and where the flood hazards are.

When it comes to property inspections, sellers often have their homes pre-inspected in order to mitigate the risk of buyers from walking away from a deal because of an undisclosed or unknown issue, like foundation or outdated electrical. However, even when an inspection has been done by the sellers, buyers should consider hiring their own inspector to get an unbiased report. And, if you're buying new construction, getting an inspection is still important to avoid any surprises.
Another thing to keep in mind is that with these surveys, it's common to find property encroachments. When this happens, you are aware of the encroachment and willing to assume any risk associated with it. Keep in mind that buying a home from a house flipper would almost definitely require a survey be done.
• Visit the Home Several Times Before You Buy
Make a point of visiting the home on several different days at varying times, so long as time allows. When it rains, look for leaks in the basement. If it's chilly, find out if there's a draft coming through the windows and walls. Stopping by in the evening may reveal that a neon sign nearby will make it impossible to sleep or that the noise from a local community center is louder than you can tolerate.

• Meet Your Prospective Neighbors
Chat with the folks across the street and get their take on the neighborhood. What do they like about the area? What are their gripes? Even a perfect house can become unlivable if the surrounding environment isn't very friendly.

• Personalize Your Offer
Buyers who include personal notes in their offers often motivate sellers to choose their bids over others. When you visit the house, look for clues about who the owners are. Then find ways to connect through shared circumstances or common interests. Perhaps you both have children or grandchildren, graduated from the same alma mater, or share a love of bird watching. Tell them what drew you to the property. Be sincere – people want to know that a buyer will love their house as much as they did, so don't be afraid to open up.
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• Come Prepared With a Counteroffer
Negotiation is par for the course when buying a new home. First, there's the initial bid and then there's the number that the seller will come back with. From here, you need to decide what your counteroffer will be. Ideally, you'll have an idea of what your counteroffer will be when you make your initial offer. That way, you can respond quickly and efficiently, something that's especially important if you're caught in a bidding war. Planning ahead is also a great way to ensure you stick to your budget.
Be sure to work with a mortgage loan officer to build a strategy. In a hot market, you'll need to make your best offer and be prepared to keep looking if it's at the top of your budget. However, there's more negotiation in slower markets.
In addition to the price of your counteroffer, you should also consider splitting closing costs. When you split the closing costs or take them on entirely, you may be using more money out of pocket, but you won't have to adjust your financing, and the seller will receive the price they're looking for.

• Buy Off-season
Housing prices are lower during winter than they are in summer, so hold off on buying until then if you can. Listings tend to be more plentiful in the warmer months – patience and diligence are key when house-hunting in winter. But you may get a better price by not competing with everyone else.

Additional online resources from KeyBank:

Insider Tips for Buying a New Home 

Avoid First Time Home Buying Mistakes

7 House Buying Tips for Saving Money

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Benefits Of Shopping Locally During Small Business Month
• May is Small Business Month and it offers plenty of reminders about why it pays to shop locally. One of the most persuasive is the economic boost communities get from locally owned independent businesses. Forbes recently looked at why shopping at small businesses is important. Here’s what they found.

• Create More Local Jobs
o Local businesses create the majority of economic growth, employing about 77 million Americans and improving stability in communities. When we shop locally, more of our money stays local, so it has a direct positive impact on creating more jobs.
o Local business owners tend to hire people who represent the demographics of the surrounding community, including historically underserved populations. This contributes particularly to community stability, considering that 40 percent of small businesses are in low-income communities, reports the Association for Enterprise Opportunity.

• Enhance Diversity
o Local businesses add to the diversity of products and services available to a community. Whereas chain stores often stock shelves that reflect national demands, a local sporting goods store is more likely to focus on community interests, offering apparel in local school colors.
o Vibrant local business communities also make neighborhoods more interesting. This tends to attract new residents and encourages growth.

• Strengthen Local Networks
o Shopping at small businesses provides access to local expertise about what products and services work best in your geographic area. For example, a local garden shop can tell you which type of tomato grows best in your climate. You can also get more personalized service by establishing a relationship with the owner as well as quicker resolution to customer service issues.
o Thriving local businesses often hire other small businesses to perform support tasks or provide raw materials and resources. This bolsters networks that can promote further growth, advocating for business-friendly policies, for example, or generating demand for more services, such as co-working spaces and local deliveries.

• Boost Environmental Sustainability
o Shopping locally is also good for the environment. Consumers who walk to local town centers reduce their use of cars and buses. Similarly, buying from small businesses that source local products can reduce the environmental impact that national chains impose in their transportation of goods.
o Local business owners tend to be more civic-minded, whether they’re sponsoring local baseball teams or volunteering with local charities.

• Increase Real Estate Values
o Neighborhoods served by successful small businesses see home values increase 50 percent on average. If your neighborhood is full of vibrant local businesses, then the value of your neighborhood will increase as it becomes more desirable.
o As real estate prices grow, communities can attract new investments to spur continued economic growth. This is especially important in low-income neighborhoods, where small businesses may also have a harder time obtaining loans and resources.
o An influx of new residents increases local tax revenue, which can be used to invest in infrastructure such as schools, public safety departments, libraries and parks that strengthen communities and drive future growth.

Small Business Week
This week is National Small Business Week, a week to highlight the impact of outstanding entrepreneurs, small business owners. Are you looking to start a business? Here are some resources that can help you make your dream come true.

WEDI

436 Grant Street
Buffalo, NY 14213
(716) 393-4088
info@wedibuffalo.org

Westminster Economic Development Initiative - reduces barriers to success and opportunity through economic development, community building, and education.

Pathstone

(800) 888-6770
info@pathstone.org

PathStone creates opportunities for people to live and work in thriving, diverse communities from which they can create family assets and access robust community services.

• Development of Affordable Rental and For-Sale Homes
• Property Management of Affordable Residential Communities
• Small Business Lending and Technical Assistance to Emerging Entrepreneurs

EGF

300 International Drive
Williamsville, NY 14221
(716) 626-3423
info@excelsiorgrowthfund.org

Excelsior Growth Fund (EGF) offers a variety of business support services to meet the needs of your small business.

• Advisory Services – EGF’s business and financial experts can support you one-on-one on a variety of topics including financial management, bookkeeping, loan readiness, business growth plans and more. Meet for free with their in-house experts or receive more in depth support from local consultants at a reduced cost.
• Resource Library – EGF’s business resource library is a one-stop shop for your most frequently asked business growth questions. Their growing collection of articles, resources and more provides insight you won’t want to miss and will prepare you for problems before they occur so you can keep your small business moving forward.
• Events – Join EGF at a local business education event and hear from their team in-person on your toughest business issues. Their seminar series presents information crucial to small businesses in real time and provides valuable connections to other local business owners and resource providers.
• Partner Resources – EGF has a growing list of local business resource providers partners for additional opportunities to gain knowledge and access experts who can help.

Additional online resources from KeyBank:

Side-Hustle Jobs to Consider When You Work Full Time

Equipment Buy or Lease Calculator

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Signs you are living beyond your means

Keeping up with the Joneses? Many of us try, and some of us can. But the truth is, for most of us, it’s bad for our financial wellness. The Joneses are fictitious people who always live better than us. That’s why the real measuring stick of our financial fitness should be ourselves, and the question we should be asking is: can I really afford the lifestyle I’m living? Here are some signs that may suggest you can’t:

1. Your credit score is below 600. Your score is a reflection of whether you pay your bills on time, the age of your accounts and your outstanding debt compared to total credit. This will influence your purchasing power, as well as your cost to borrow money.

2. You save less than five percent of your income. You should aim to save 10 to 15 percent of your earnings.

3. You don’t have an emergency fund. Unexpected and expensive are near inevitabilities in life. You can’t afford to put these emergency costs on your credit card and pay interest on them. It’s a hole that is difficult to dig your way out of.

4. Your credit card balances are rising. If you carry a month-to-month balance you are spending more than you can afford. You should be able to pay off your credit card balance in full every month.

5. Your monthly house payments account for more than 28 percent of your income. To calculate what percent you spend, divide your monthly mortgage or rent payment by your monthly income.

6. You can’t keep up with your bills. You find yourself making late payments or taking cash advances on credit cards to pay bills you once paid with cash.

7. You live paycheck to paycheck. You need to start putting aside at least five percent into savings. If you can’t, you need to take a closer look at your budget.

8. You have paid an overdraft fee in the past six months.

If you find yourself in any of the above situations, the healthiest thing you can do for your future is to take an honest look at your income, expenses and spending habits. Question every purchase you make, and be disciplined in those that you do. Then make the necessary changes, because it’s easier to live with your hard decisions now than to deal with the consequences of doing nothing later.

Additional online resources from KeyBank:

How to Make a Budget and Build Savings

Debt Snowball Method: Slay Your Debt Swiftly and Simply 

Unexpected Expenses Don't Have to Be So Stressful. Here's Why.

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)

Hidden Costs of Relocating for a New Job
• Relocating for a new position or even a different career path is a reality for many employees. And while the relocation package you're offered might look shiny and appealing, there are hidden costs to relocating that you should be aware of first.

• Moving Expenses
o Under the new tax plan, moving expenses for those relocating for a job are no longer tax-deductible (unless you're in the military). This means that you'll be bearing the brunt of any costs not paid up front or reimbursed by your employer. Be sure to ask about moving expenses and which party (you or your employer) is expected to pay for what so that you don't wind up facing an unnecessary reality check on tax day.

• Health Insurance
o If you're changing states with your relocation, you might be faced with changing your health plan. That can mean starting over with your deductible, which could be a significant cost for those with high deductible health plans — especially those coupled with health savings accounts (HSAs). Be sure to review your health insurance options and what this will mean for your deductible with your new employer's human resources or benefits department.

• Selling Your Home
o You don't want to be stuck paying for two homes. Relocating can mean a hefty living expense tab each month, especially if your existing home doesn't sell within the first 30 days. A slow sale may also inhibit your ability to close on a new home in your new city. Be sure to speak with your employer about how they handle selling your home and helping you secure housing in your new city, along with what happens if your home doesn't sell right away.

• Benefits
o A substantial salary jump is one thing, but are you losing valuable benefits by relocating? Be sure to compare the value of the benefits at your current position and the position that requires relocation to ensure that the bigger salary isn't going to be used to make up the difference between what you had and what you've lost.

• Cost of Living
o Moving for your career might mean a shift in living expenses. Be sure to do the match before you accept a relocation offer. A cost of living calculator can help you make detailed comparisons, even down to the zip code. You might find a lower salary and lower cost of living puts you way ahead, while a higher salary with a high cost of living leaves you strapped for cash.

Simply knowing about these five areas that hold potential for hidden relocation expenses is a smart start. Your next step is to ask questions about each, understand how the relocation package offered addresses each one, and make sure that you're aware of the costs of relocating before you make that career jump. A great final tip is to ask to speak with an employee who recently relocated for tips on unexpected expenses or benefits they've encountered in their new city and position. This way, you'll have first-hand knowledge to add to your relocation conversations.

Additional online resources from KeyBank:

Hidden Costs of Relocating for a New Job 

5 Company Benefits to Consider Before Accepting a New Job

(This material is presented for informational purposes only and should not be construed as individual tax or financial advice. Please consult with legal, tax and/or financial advisors. KeyBank does not provide legal advice. KeyCorp 2017. KeyBank member FDIC.)