Blog   Tagged ‘FWOTW’

Financial Words of the Week: Back to School – Joint Accounts & Online Banking

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FWOTW

Back to School Series

When a high school graduate moves away from home, an adjustment period inevitably follows. Paying bills, maintaining jobs and making sure their checking accounts remain positive, can cause college freshmen and new-to-the-work-force employees to struggle with finding a balance.

Whether you’re in this situation yourself or you have a child who is adapting to this new life, opening a joint checking/savings account and online banking can be helpful tools for a smooth transition.

Many banks offer free accounts for college and high school students that do not charge a monthly fee for maintaining an account. The minimum balance requirements are often more flexible since many students don’t have the income to satisfy typical account requirements. By opening a joint account, a parent or guardian can easily track spending and transfer money.  One of the best ways to do this is by utilizing online and mobile banking, which is free at most banks. You can see full transaction history and statements, transfer money from one account to the next, or see how much you have saved … all from your computer or smart phone. Many banks even have options for those who do not have smart phones that utilize text messaging commands.

By working together with your family’s bank, you can ensure you and your student have the right foundation for great educational and fiscal responsibility.

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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 diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Words of the Week: Back to School – Student Loans / FAFSA

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FWOTW

Back to School Series

There are different types of student aid that come from various sources. Aid can be in the form of grants (money that is not required to be paid back) that come from schools, private organizations or even from the state and federal government. Some students enter work-study programs that allow them to earn money towards their education as another type of aid. The most common form of aid comes from student loans.

Student loans are funds that are made available for students and guardians to pay for education expenses. It is important to note that, like all other loans, student loans are required to be paid back. However, many student loans offer a deferment period that eliminates the need for payments while a student is in school. There are some loans that are subsidized, so that while a student is in school, the loans don’t accrue interest that the student will have to pay. The federal government is actually paying that interest, not the student.  There are also unsubsidized loans in which the interest accrues while the student is still in school. There still may be the option to utilize in-school deferment, but the interest adds up the entire time the loan exists.

Sometimes it can be difficult to know where to start and which form of aid you may be eligible for. That is where Free Application for Federal Student Aid (FAFSA) comes in. The FAFSA is a form developed by the federal government that helps determine what types of aid students qualify for. Most colleges require that you complete the FAFSA when applying for financial aid. Visit FAFSA’s websiteto find out more details.

Remember to also work with a bank partner or trusted financial advisor, your high school guidance counselor and your college admissions office to understand if there are any additional resources for your education expenses.

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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 diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Words of the Week: Back to School – Coverdell ESA/529 Plan

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FWOTW

Back to School Series

Parents—do you know all of your options when it comes to saving early for your children’s education? Here, we’ll discuss two of our recommended options for saving funds for education well in advance of your first child going off to college: the Coverdell Education Savings Account and the 529 Plan.

The Coverdell Education Savings Account (ESA) allows for a family member to deposit funds into an account that grows tax-free until funds are distributed. It is a great vehicle to start growing funds for both K-12 and college tuition. You can even direct how you want to invest the funds yourself to offer a high level of control over rates of return. There are a few restrictions to this plan such as income limitations and an annual contribution cap of $2,000. After the beneficiary turns 18, you can’t contribute unless special exceptions are granted.

As with the Coverdell ESA, the 529 Plan is a savings account that will allow your contributions to grow tax-free. Unlike the Coverdell ESA, however, the 529 requires that your distributions be used for college expenses only. With the 529 Plan, you are not restricted to an income or age limit, and there is a much higher annual contribution limit: $14,000 per year or nothing that exceeds the education expenses, whichever is lower. In some situations, your state might even offer additional tax benefits for using their 529 Plan. While not offering the same kind of control over investments as the Coverdell ESA, the 529 Plan still offers great value and benefit to parents and students only concerned with college expenses.

Which is right for you?

Work with your local bank partner or financial advisor to review the pros and cons of each option to create an individualized savings plan. You can also check out IRS.gov for more information.

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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.

 

 
DISCLOSURE AND IMPORTANT CONSIDERATIONS:

UMB Private Wealth Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals.  UMB Financial Services Inc * is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation. Banking and trust services offered through UMB Private Wealth Management, a division within UMB Bank, n.a.

This report is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Private Wealth Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Private Wealth Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Private Wealth Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. This information is not intended to be a forecast of future events and this is no guarantee of any future results. Neither UMB Private Wealth Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Securities offered through UMB Financial Services, Inc. member FINRA, SIPC, or the Investment Banking Division of UMB Bank, n.a.

Insurance products offered through UMB Insurance, Inc. You may not have an account with all of these entities. Contact your UMB representative if you have any questions.

Securities and Insurance products are:

NOT FDIC INSURED * NO BANK GUARANTEE * NOT A DEPOSIT * NOT INSURED BY ANY GOVERNMENT AGENCY * MAY LOSE VALUE


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Financial Word of the Week: Back to School – Co-Signer

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FWOTW

Back to School Series

You have probably heard the phrase, “You need to have credit to get credit.” It can be difficult for someone starting out with no credit to establish a record. One way to overcome this hurdle is to have a co-signer on a loan or revolving line of credit.

A co-signer is a person who also promises to pay the debt. A co-signer is often used when the original applicant has no credit or “poor” credit. Having a more credit-worthy applicant ensures that the creditor, in most cases the bank, has more protection because there is a second person to pay the debt.

The co-signer is responsible for the loan payments. This includes all past and future payments not yet made as well as any additional late fees or penalties. Additionally, co-signers can have their credit impacted if payments are not made on time, so weigh all of the options before agreeing to be a co-signer.

Parents of college students often co-sign for an auto loan or small credit card. By having a low-limit credit card or a small auto loan, students can build good payment history to establish credit with little risk to their parents.

Whether student, co-signer or just a single applicant, one thing is certain – it takes a long time to build credit and a short time to negatively impact it. We always recommend borrowing and paying responsibly to ensure you have access to funds you need. If you’re considering co-signing a loan or credit card, it’s important to first make sure that you can make the monthly payments in full before you make your decision.

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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 diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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