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Meet the Veterans: Ryan Gardner

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UMB is fortunate to have several veterans on our team and are proud to hire veterans in our local communities. This series will highlight some of our associates who have served their country in the military prior to joining UMB. Be sure to check out the first profile in our series—Steve Marin.

Q&A with Ryan Gardner, Staff Sergeant, MN Air National Guard
Ryan Gardner - Staff Sergeant, MN Air National Guard

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What can you tell us about your background?
I was born and raised in Minnesota, just south of Minneapolis. When I was 17, I joined the MN Air National Guard and served for six years in the security forces unit. During that time I also attended Winona State University and majored in Finance with minors in Accounting and Business Administration.  Beginning in my last year of undergrad, I began interning at IBM as a financial analyst and then later was hired on full-time in the same role. In 2011, after separating from the Air Force, I decided to pursue another dream of mine–living abroad. In December 2011 I moved to Nicaragua and taught English at an orphanage through most of 2012. Upon returning to the States, I began working for the Department of Veterans Affairs as a Veterans Service Representative and obtained my M.S. in Leadership at Walden University.

What about your past shaped who you are today?
When I was a kid I had pretty bad asthma, and I remember our “run day” in kindergarten. The goal was to make it three miles, and my teacher had warned all of the volunteers to keep a close eye on me that day. In the first few laps, I remember hearing the volunteers telling me that I could stop whenever I wanted. As I kept going and broke the halfway mark, those heeds of caution turned to encouragement as they cheered me on until I finished the run. I ended up being one of two people to complete the run that day. The concept of perseverance and the idea that limitations are never finite has always stuck with me and has driven me throughout life. 

Tell us about your family.
I’m extremely close with my mom and my two brothers.  I’m the oldest of the three brothers, and I’m sure my brothers would say I take on more of a paternal role than I should.  Adam and I, being only two and a half years apart, grew up doing everything together.  Since Cole is eight years younger, I got to be the “cool” older brother growing up. Both relationships have remained exceptionally strong over the years.
Ryan Gardner weddingI met my wife on a tour in 2011. My mom and I were on a trip in Costa Rica and took an overnight tour to Nicaragua. The tour guide didn’t speak any English, so to overcome the language barrier, she called her daughter (who is now my wife) to translate. We exchanged contact information and stayed in touch. I came back down to see her for a week in October. Less than two months later I moved to Nicaragua to work at the orphanage, and we began dating. Before I left, I proposed and we then went through the arduous process of getting her permanent residency. She came to the United States, and we were married in June 2013. Since then we have adopted our two “fur babies,” Jackson and Shea.
Ryan Gardner and wife Why did you choose to join the military?
It was a bit of a tradition for me. I’m the fourth generation in my family to serve. From a young age, I had it in my mind that I wanted to carry on that tradition. There’s something to be said about doing push-ups in the same spot as your grandfather was 60 years ago. It was also about adventure. I knew that I was going to have an opportunity see and do some fascinating things. I definitely was not disappointed.

Give us some highlights about your military career.
Two of my favorite memories are from my times overseas. In 2008 I was deployed to Saudi Arabia for six months. The two things I remember the most are the sandstorms and the heat. It was typically around 120 degrees every day, but we saw as hot as 136 degrees. My job as a member of the quick reaction force involved riding around in an up-armored Humvee—an oven on wheels! It hit 150 degrees inside the truck one day.

My other favorite experience is when I went to winter survival training in Norway. The Norwegian Army sends more than 100 of their troops to the Minnesota National Guard, and we send more than 100 to them for two weeks every other year. During this time we were embedded into their military and went into the mountains to learn survival skills. I don’t think I’ll ever forget taking snow baths (exactly what it sounds like), sleeping in a snow cave, or eating a raw grouse heart. Like I said before, I love adventures!

What are the greatest challenges that someone leaving the military and entering a new career faces?
I think one of the hardest challenges is creating the idea of how your military experience can be leveraged in corporate America. For me, that came in the form of risk assessments. When I was in the Air Force I routinely performed counterterrorism and explosive ordinance risk assessments. Contextually, this is a far cry from what we do here at the bank. However, on a conceptual basis, the overall process is the same. I have been lucky enough here at UMB to have found managers like Jenny Payne, Sara Flores and David Kling who recognized that potential and helped me make that connection.

What are your favorite hobbies?
I’ll always be a Minnesotan and my hobbies reflect that. I love to go camping, hiking, kayaking and snowboarding. How can you not enjoy being outdoors when you come from the land of 10,000 lakes? I also enjoy competing in mud runs. I’ve ranked in the top 5 percent of all Tough Mudders both times I competed in the event.

Where is your favorite place to travel?
I honestly don’t know if I can pick a favorite anymore. I swam with sharks in Belize, hiked the Inca Trail in Peru, tracked rhinos in Botswana and explored castles in Europe. So picking one place is difficult. The top item on my bucket list has always been to make it to 30 countries before I’m 30, and I’ve currently been to 25. There’s just something to be said about experiencing new cultures and places. I turned 27 this year, and my wife and I have a trip planned to go to five countries in Eastern Europe in September. So it looks like I’m going to reach my goal!
Ryan Gardner - ZimbabweWhat are your favorite ways to spend a weekend?
My favorite way to spend a weekend is with my dogs. We rescued a Jack Russell Terrier mix and a German Shepherd mix in the last two years. My wife and I spend most of our free time with them. They make great running/hiking partners (though the little guy usually wants to be carried home after a while).
Ryan Gardner with dogsHow did you come to be at UMB?
The story of how I came to UMB is quite serendipitous. My wife was offered a job here in Kansas City while we were still living in Minnesota, so we had a choice to make. Ultimately I decided that it was only fair that, since she moved to another country for me, I could move to another state for her. So I left my work at the VA and we headed to Kansas City. After a month or so of being here we came into the Walnut branch to open a local checking account. I was telling the personal banker about my story, and she ended up recommending me for the Emerging Leaders Program. I will forever be indebted to the unparalleled customer experience of UMB!


Mr. Gardner is a Fraud Risk Manager for UMB. He is responsible for support of UMB Financial Corporation’s Information Security Program through ongoing development, implementation and administration of the Company’s formal Fraud Risk Management Program. He joined UMB in 2014 and has six years of experience in risk management.



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Strength of the U.S. Dollar

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Our Chief Investment Officer answers your questions about the strengthening U.S. dollar:

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The Positive Side of a Strong Dollar?
Throughout the past few quarters, the strengthening U.S. dollar has been gaining a lot of investors’ attention. An appreciating dollar can be both a blessing and a curse. I’ve noticed that much of the news has focused on the negative impacts of a strong dollar. Many corporate CEOs have cited the strength of the dollar as a headwind to their earnings growth. Today I will spend a few minutes on a different perspective: the positive side of a strong dollar.

What drives the U.S. Dollar?
The value of the dollar is a function of relative economic strength. So it’s not just about the Federal Reserve action or domestic economic growth, it’s also is a function of global growth. I believe the global economy is the primary driver of the dollar’s recent strength. Historically, faster-growing economies have rising currencies due to capital inflows. A strong dollar has been associated with slower global economic growth, because the dollar remains the reserve currency.

Pros and Cons?
Even though most of the headlines cite a strong dollar as a negative, there are some positive effects.

  • Typically with a strong dollar comes lower commodity prices. This is positive for the consumer, as energy costs decline.  And businesses benefit if commodities are an input variable.
  • The United States is a net importer; we import more goods than we export. Less expensive imported goods and services will increase consumer confidence and spending. Businesses buying imported raw materials or components may increase their margins or pass on savings to consumers.

What does a strong dollar mean to the U.S. economy and markets?
A strong dollar will transfer demand from the U.S. economy to economies around the world. This will negatively impact some industries, where exports represent a significant portion of their business, such as industrial conglomerates. However, other industries, focused on the domestic consumer, will benefit.

Given our forecast of an improving global economy, whether it’s actual green shoots of economic growth in Europe, or the hope of economic stimulus in China, I believe we’ll see the dollar stabilize for the remainder of the year.

I don’t believe a strong dollar will derail our market forecast.  Historically domestic equity markets have performed well in periods of both a strong or weak dollar. The message here is the dollar is not the primary driver of stock prices and I would expect the S&P 500 to post returns in the 7-10 percent range in 2015.


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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Financial Word of the Week: Individual Retirement Accounts (IRAs)

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Financial Word of the Week

So far this month, we talked about a few savings account options, including HSAs, FSAs and 401(k) plans.  Two other common retirement savings account options are traditional IRAs and Roth IRAs.

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Traditional IRAs

A traditional IRA (Individual Retirement Account) is a savings account for retirement that gives you tax advantages. The contributions you make to your traditional IRA might be deductible from your taxes depending on a few circumstances.

The IRS sets the limit on how much you can contribute. This year the maximum amount is $5,500 or $6,500 if you are 50 or older. Even if you contribute less than this amount, your contribution is still eligible for tax deductions.

Generally, if you are contributing to a traditional IRA, you cannot access the money without a tax penalty until you are 65, have participated in the plan for at least 10 years or terminate service with your employer. You can learn more on the IRS website.

Roth IRAs

A Roth IRA is a savings account for retirement where the contributions are not tax-deductible. Roth IRAs are very flexible. You can withdraw your regular contributions without a tax penalty or fee; however, you generally cannot withdraw your earnings on the contributions without penalty until you are 59.5 or have held the account for five years.

In order to be eligible to contribute a Roth IRA, your modified adjusted gross income must be less limits established by the IRS. There are also contribution limits. It may seem like a no-brainer, but you cannot contribute more than you make in a year if your earned income is less than your contribution limit. So if you make $4,000 a year at a part-time job, you wouldn’t be allowed to contribute $5,000 to your Roth IRA using other funds like interest from another savings account.

Another advantage is if you decide to work during retirement, you can continue to contribute to the account. You can also leave money in your Roth IRA for as long as you live. Learn more on the IRS website.

While there are many savings options available, always do your research first and talk to a trusted financial advisor to ensure you are using the best account for your unique retirement goals.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Opportunities for Municipal Borrowers

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Interest rates are historically low. The anticipated date for the eventual rise in rates has not been formally set by the Fed, and seems to be regularly postponed.  Low interest rates present a challenging investment climate for municipalities, hospitals, school districts and colleges or universities. But it’s not all gloom and doom. There are options in which these entities may meet the challenges and seize the opportunities that come from low interest rates when they issue municipal bonds.
municipal borrowers

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The Challenges and Opportunities in the Current Marketplace
Let’s say you are a university finance officer and you need to underwrite $10 million in order to build a new library. You raise the $10 million via a new bond issue but the project calls for the cash outflow for the new building construction to happen throughout the next 24 months.  This means you have to invest the currently unspent balances in the meantime. Given the current low interest rate environment, the rate you receive on the invested balances will likely be lower than the rate you paid to raise the debt.

This situation, called negative cost of carry, occurs when an entity issues debt and then invests all or a part of the proceeds at a rate lower than the rate being paid on the debt issued.  Examples of this would include: project construction funds, escrow funds to redeem refunded bonds and debt service reserve funds where not all of the proceeds are immediately used. The interest rate on the bonds, or the borrowing rate, may be substantially higher than the rate which may be earned on proceeds, resulting in a negative cost of carry. Like our library example, if you do an underwriting for $10 million and pay an average of 3 percent interest on those bonds, in many cases, all of your proceeds aren’t put to use immediately for a building or project. Therefore, you would have $10 million in cash for a period of time. Rather than sitting on that cash and earning nothing, you’d probably invest the $10 million. However, since interest rates are so low, you wind up investing the cash you are paying 3 percent interest on into something yielding far less.

While the low return on invested proceeds can create a drag on the financing of the project as the current market provides a substantial tail wind with the low interest rate on the issued bonds. This opportunity is most apparent with refunding bonds. Unlike the corporate bond market, the municipal bond market typically allows issuers to embed the right to prepay without penalty on their long-term fixed rate bonds. Issuers can see substantial savings in interest costs by issuing new debt and using the proceeds to redeem, or prepay, the old, higher rate debt on the call date. In 2014, refunding bonds represented nearly 41 percent of all long term municipal issues, up from 33 percent in 2013. We believe this trend will continue in 2015.

Gain Better Timing and Rates through Private Placement
Private placements can be another great alternative to traditional public issues, which might result in negative cost of carry.

Let’s go back to our example of the new university library. Instead of the debt being sold in the public markets, it could be privately placed with one or a small accredited group of investors to allow for additional flexibility as it relates to the structure of the debt. Instead of the university having to deal with negative cost of carry for two years as indicated above, it could instead structure the debt so that it drew the cash in accordance with the construction timeline, potentially lessening the impact of negative cost of carry in a low interest rate environment.

A growing number of issuers have captured the low borrowing rates and then addressed the interest rate gap between the cost of issuance and rate they are able to invest at by structuring issues in the private placement market which offer more flexibility. As private placement purchasers appetite for debt has increased, the spread between publicly issued debt and privately placed debt has decreased, making it an attractive proposition. Here are other possible advantages to private placements:

  • Private placement purchasers, frequently commercial banks, are currently offering attractive borrowing rates not far removed from rates bid for publicly-offered issues.
  • Private sales avoid the time-consuming and costly work of preparing the disclosure documents required to publicly offer the bonds.
  • Issuers will not be required to observe the continuing disclosure rules of 15(c)(2)12 of the Securities Act.
  • Private placements are not registered with the SEC, so registration and disclosure requirements like the Municipalities Continuing Disclosure Cooperation Initiative are not required.
  • Credit ratings, bond insurance and printing costs can all be eliminated with private placements.

Another Advantage: The Draw Feature
In addition to the ease of issuance, only private placements can offer a valuable alternative called the draw feature. At settlement, the initial draw is used to pay cost of issuance, the remaining bond proceeds are paid to the issuer when needed rather than at settlement. Interest will not accrue on the bond until, and only to the extent that, proceeds are drawn. Construction project financings greatly benefit from the draw bond structure. For instance, a $10 million construction project that is financed at 4.00% over 20 years and takes two years to complete, would generate an estimated savings of $380,000 when financed with a draw bond.  Interest would accrue on approximately $5 million on average over the two year construction period, or $400,000 of interest, instead of $800,000 of interest accruing on the full $10 million over the same period with a public sale. The public sale would permit approximately $20,000 of interest earnings on the project pending disbursement.

Draw bonds provide similar efficiencies for refunding bonds. For example, assume an outstanding $10 million bond yielding 4 percent which may be called in one year. The delayed draw refunding bond paying 2.50 percent will reduce the size of the escrow requirements and avoid the negative investment earnings in the escrow. These efficiencies result in over $300,000 or 2 percent of the bond size in additional estimated savings compared to a publicly-issued bond in which proceeds are held in escrow and invested during the one year escrow period.

However, what if the issuer has an outstanding bond which may not be called for several months, and has already been advance refunded? The delayed draw structure can be used effectively to lock in today’s low rates on the refunding bonds and still comply with the restrictions on no more than one advance refunding. The privately placed, delayed draw bond simplifies what might be addressed in a public issuance with complicated and expensive swaps and derivatives.

Final Note
It is important to consider that while the new developments in the private placement of municipal bonds may provide the issuer with more flexible and efficient alternative financing options, current interest rates and uncertainties can be tough for institutions when managing these strategies.

Keep in mind, there are a number of sensible and intelligent ways to take advantage of any economic situation.

The information and opinions expressed in this message are solely those of the author and do not necessarily state or reflect the opinion of UMB or UMB Financial Corporation. 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Philip Richter is a Senior Vice President for UMB Bank. He is the Manager of the Public Finance Department in the Investment Banking Division. Phil joined UMB in 1997 and has over thirty years of experience in the municipal bond and financial services industry.



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Financial Word of the Week: 401(k) Plan

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Financial Word of the Week

A 401(k) plan is a retirement savings account usually offered through your employer. Some employers will offer a match or non-elective contribution to your retirement account, which is a smart way to help you reach your retirement goals faster.

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It’s important to understand the plan your company offers to ensure you are getting the full employer match by contributing as much as you need to be. Remember, your employer’s contribution match is free money!

The contribution you elect to make is taken out of your salary before taxes. The IRS regulates how much you can contribute each year. For 2015, the limit is $18,000. If you are 50 or older (and therefore closer to retiring), you can contribute an additional $6,000 as a catch-up contribution. 401(k) contributions are usually invested in mutual funds, which will be covered later in our series. Generally, a 401(k) account cannot be accessed until you are 65 without early withdrawal tax penalties.

Use our calculator to obtain an estimate of where you stand with your retirement savings.

If your employer doesn’t offer a 401(k) plan, stay tuned for next week’s post when we explore other retirement savings account options.

 


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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First Quarter 2015 Earnings Explained

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We recently released our First Quarter 2015 earnings. Our CFO, Brian Walker, took a moment to explain where we faced headwinds as well as the positive aspects of the last quarter.


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Mr. Walker is the Chief Financial Officer and Chief Accounting Officer at UMB Financial Corporation. He joined UMB in 2007. He earned a Business Administration (Accounting) degree at Kansas State University and his Masters of Business Administration degree at Rockhurst University. In addition to his involvement with several community and charitable organizations, he is also the treasurer for the Big Bash Foundation, a not-for-profit foundation focused on providing financial assistance and increasing visibility for local not-for-profit organizations.



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Financial Word of the Week: HSA vs. FSA

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Financial Word of the Week

You’ve probably heard a lot about health savings accounts (HSAs) recently. They have been all over the news because the industry saw a 29 percent increase in the number of accounts in 2014. In fact, UMB Healthcare Services recently reached 600,000 accounts and $1 billion in assets and deposits for HSAs.

So what is an HSA?

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To be eligible for an HSA, you must be enrolled in a qualified High Deductible Health Plan.  An HSA is a savings and investment tool for current or future qualified medical expenses. HSA deposits and earnings grow tax-free,1 and your withdrawals are tax-free as long as you spend the money to pay for eligible medical expenses. Deposits into your account up to the annual contribution limits and any interest on those deposits are not taxed. At the end of the year, the money you have saved rolls over and continues to do so throughout the duration of your HSA’s life. Many companies will also contribute to or match your HSA funds to a certain amount; free money for your medical expenses. You can find out even more about HSAs here.

Another type of account to consider, if it is offered by your employer, is a flexible spending account (FSA).

A FSA is also a tax-advantaged savings account. You can set aside funds each year to cover qualified medical costs throughout that year. Some companies will even contribute to your FSA. The big difference between an HSA and an FSA is that the funds you put into an FSA have to be used by a certain date or the money is forfeited. Learn more about FSAs here and take a look at our chart that compares three types of consumer directed health care.

Comparison of Consumer Directed Healthcare

 

1All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. Please check with your state’s tax laws to determine the tax treatment of HSA contributions, or consult your tax adviser. Neither UMB Bank n.a., its parent, subsidiaries nor affiliates are engaged in rendering tax advice.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Credit Card Debt vs. Emergency Funds

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You probably already realize the importance of keeping an emergency fund for unforeseen events such as auto repairs or health issues. However, actually saving for the unexpected can be a challenge. By not planning, you can put yourself at risk for financial disaster.

A recent poll from Bankrate revealed 24 percent of Americans have more credit card debt than they have in their emergency savings. Most people, 58 percent, who don’t struggle with credit card debt still fall short when it comes to having a strong emergency fund.

emergency savings vs. credit card debt

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Greg McBride, Chief Financial Analyst at Bankrate, can’t stress enough the poor situation consumers are putting themselves into. “These numbers mean that three out of every eight Americans are teetering on the edge of financial disaster,” says McBride.

How to manage credit card debt

While there isn’t one definitive way to erase credit card debt in a hurry, below are a few helpful tips to expedite the process.

  1. Tackle high interest debt first
    It may be easier for you to stick with a debt payoff goal if you attack the card with the lowest balance. However, most financial experts agree that the best practice is to pay down the balance on the highest interest card first.
  2. Double or triple payments
    Consider doubling or tripling your monthly payments, or apply tax refunds towards outstanding balances. The faster you can tackle your highest interest card, the sooner you will reach a debt-free lifestyle.
  3. Stick with your plan
    When faced with high debt, it is critical to track and budget expenses to monitor progress and keep spending habits under control. Once the highest-interest card reaches a balance of zero, it’s time to move on to the next highest interest card.
  4. Build an emergency savings
    Building an emergency fund is just as important as getting debt under control. Tuck away money each month and set aside for emergencies only. Do this even if it means paying less on your debt payments. Most experts agree that a healthy emergency fund equals at least six months of living expenses.

Getting credit card debt under control requires excellent planning, dedication and patience. Once goals are met, it is important to keep moving forward with healthy spending and savings habits.  Being financially prepared for life’s unexpected events is smart. Having peace of mind is priceless.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Em Sullivan is an AVP Product Manager for UMB Payment Solutions. She joined UMB in 2011 and is responsible for managing consumer credit card activities, including product development, product Marketing, partner implementation & on-boarding.



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Financial Word of the Week: Tax Exemptions

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Financial Word of the Week

To wrap up this tax month, let’s talk about exemptions—special deductions that you can use to lower your taxable income.

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Exemptions are a set amount of income that is not subject to income tax. This amount could change each year and could be reduced if your adjusted gross income is above a certain amount. For 2014, you may deduct up to $3,950 for each exemption you claim. You may claim exemptions for yourself, your spouse and any dependents.

Phaseout of Exemptions (2014)

Filing Status                                       Adjusted Gross Income Level That Reduces Exemption Amount

Married Filing Separately                                       $152,525

Single                                                                                 $254,200

Head of Household                                                    $279,650

Married Filing Jointly                                               $305,050

Qualifying Widow(er)                                               $305,050

For example, if you are married and have two qualifying children, you may be able to claim four exemptions. For 2014, this would equate to an exemption amount of up to $15,800 ($3,950 x 4).

If you can be claimed as a dependent by another taxpayer, then you are not allowed an exemption for yourself on your own tax return, even if the other taxpayer does not actually claim you as a dependent.

A dependent can be either a qualifying child or other qualifying relative, but your spouse can never be considered a dependent. Special rules are used to determine whether someone can be considered a dependent.

For more information on exemptions, refer to IRS Publication 501.

 

*This post is not meant to replace the advice of a tax professional.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Teach Children to Save

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Do your kids know that money doesn’t grow on trees? Here are some helpful tips for each age group.
Teach Kids to Save

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You don’t have to wait until your kids are teenagers. You can start talking to them about the basics of money as early as preschool. Here are some tips about how to talk to your kids about money at any age:

  • From ages three to five you can teach kids that money can be exchanged for things. Explain to them the difference between pennies, nickels, dimes and quarters.
  • From ages five to nine you can start giving them an allowance. This is also a good time to explain bank accounts and what it means when a bank account earns interest.
  • From ages nine to 13 you can help them open a savings account. Encourage them to save their allowance towards a goal (a new toy or a DVD). You might even consider setting up a matching savings plan like most companies do with a 401(k). This is also a good time to start talking to them about the idea of keeping a minimum balance based on the savings account requirement. You can also introduce the concept of keeping savings in case of emergency. Even though they won’t need to pay for an emergency at such a young age, you can explain the importance of keeping a nest egg.
  • From ages 13 to 15 you can expand your children’s allowance to include more expensive items like clothes or gifts for friends. This is also a good time to introduce entrepreneurship. Encourage your kids to earn their own money with jobs for neighbors and friends.  Arrange for them to have an ATM card so they can withdraw money from their savings account.
  • From ages 15 to 18 and up you can help your children open a checking account with a debit card. Teach them how to manage their account online or with mobile banking. You can even go old school and show them how to use a check register. This is also a good time to talk fiscal responsibility about when they go off to college. Be very clear about what expenses you will pay for which ones they will cover.

Explaining money management to your kids can start out with something as simple as giving them an allowance. If you talk to them regularly, teach by your own fiscally responsible example and give them the right tools, you will do more than teach them about money basics. You will instill in them a respect for earning and saving money that will hopefully set them on a path to being financially independent and responsible in adulthood.


Ms. Pierson serves as executive vice president of Consumer Banking. She joined UMB in 2011. She received a Master of Business Administration from Rockhurst University and a Bachelor of Science in Industrial Engineering from the University of Missouri. Ms. Pierson is actively involved in the community, having served on a number of boards including the Kansas City Area Development Council, LISC of Greater Kansas City, the University of Missouri Industrial Manufacturing Systems Engineering Board and the Lee's Summit Education Foundation Advisory Board.



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