M A G A Z I N E

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LEARN EVERYTHING YOU NEED TO KNOW ABOUT BANKING AND FINANCE!

JUMP-START YOUR NEXT ADVENTURE!

THEINTERNETKNOWS EVERYTHING

FEATURE //

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ABOUT ME!

RENT OR BUY?A COMPARISON FEATURE

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HOW CAN I KEEP MYACCOUNTS SECURE?

C O N T E N T S

FALL 2016

Boring Budgets Fund Fun Times 4

Which Should I Use? 7 Credit Card vs. Debit Card

What You Didn’t Know You NEEDED 9 to Know About Your Credit Score

COVER STORY Rent or Buy? 11

FEATURE STORY The Internet Knows Everything About Me! 13 How Can I Keep My Accounts Secure?

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JUMP-START YOUR NEXT ADVENTURE!

Ask questions, stick to your budget and build your savings to jump-start your next adventure!

CHALLENGE:Ask questions about money! Get comfortable talking about it and making financial decisions. When you understand your options you can make smart financial choices to help fulfill your dreams.

When you’re on that plane headed around the world, or you see the frame of your home being lifted, you’ll love seeing the results of your hard work, smart money decisions and sacrifices.

First Kentucky Bank provides a reliable, personal approach to finances. Our bank has roots spread across western Kentucky, proving our longstanding reliability.

Adventure is defined differently by everyone. You may want to climb a mountain, go surfing in Hawaii or take a road trip across the U.S. Or, you may want to design and build a new home, start a new business or study abroad.

Whatever your definition of adventure is, at some point you have to start thinking about how you will fund your dreams.

Money talk can be stressful and make you feel like you’ll never see those dreams realized. With the right planning and sacrifices you might just find those dreams are attainable!

Start with a simple plan for your adventure. Don’t be too detailed, but get a general idea of how much you’ll need to save. Then, get serious about your budget and adding to your savings account (see page 3 for help!).

You may discover you need to take out a loan or put some of your expenses on a credit card, so start building your credit now (see page 9).

Finances can be confusing and there are times you’ll have to sacrifice something you want in the short term so you can achieve your goals in the future. Would you like to eat out every night? Or would you rather receive a college education, see the Eiffel Tower or build your dream home?

Taking care of your finances doesn’t mean you live a boring life, it just means you’re able to pay for your needs first and then the extras you really desire.

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BORING BUDGETSFUNDAN INVESTMENT FOR THE FUTURE!

FUNTIMES

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Retirement planning should begin with your first job.

Many wait till their 30s or 40s to start saving and then find later in life that they don’t have enough to retire.

You may think keeping a budget is boring and a waste of time. But, do you want to travel one day? Want to pay off your dream car? Want to save up for a home to call your own?

A boring budget can help you have a BLAST...one day.

Budgets help you stay within your means of income and keep track of how much you’re investing in your future goals.

When you create a budget, the first question to ask yourself is what is the purpose? What goal do you want to achieve if you keep within your budget?

If you live paycheck to paycheck, your main purpose is to meet your monthly expenses. If you are saving up for a vacation or want to purchase a home, you may want to cut budget items found in your “extras” column so you can put more into your savings.

Why Do You Need a Written Budget?You may think as long as you have the money in the bank, that’s all you really need to know about your finances. But, saving and staying motivated for your future is difficult without tracking your spending.

Write out your budget, track your expenses and stay conscious of where your money is being spent and how much you have left.

You may want to go to the movies, but if you don’t have the funds left in your entertainment budget, then consider not going. It may seem like a bummer right now, but in the end you’ll be glad you sacrificed a little for your future endeavors.

What Can I Cut to Save Money?After you’ve written out your budget and your sav-ings goals, you can have a better perspective of what changes need to be made to your lifestyle to meet those goals.

Many people think they have to cut out fun to be able to save money. But that’s not always the case!

MONTHLY EXPENSES BUDGETTOTAL INCOME

Car Payment

Taxes

FOOD/TOILETRIES

Entertainment

Clothes/Shoes

SAVINGS GOAL Earn by to pay for

Other Loans/Credit Card Payments

Internet/Cable

Retirement Savings (401K, IRA)

UTILITIES (Water, Gas, Electric, Trash)

Fuel (Work Commute, Weekend Trips, etc.)

OTHER

Insurance (Car, Renters/Home, Health)

Rent/Mortgage

Phone Bill

Savings (recommended 10%-20% of each paycheck)

TOTAL

INCOME – EXPENSES =

KNOWN EXPENSES

NEEDS & WANTS

Here are some tips to find where you can cut your budget so you can siphon more money into savings:

1.What can I live without? Do you really need to eat out every Friday night? If you have a gym membership, are you actually using it? Look at monthly expenses you could cut or ask for lower rates. For example, call your car insurance agency to see if you can lower your monthly premium. Or, talk with your internet company to see if there’s anything you can do to lower your bill.

2.What can you do to save money on the things you need or want?

A) Try keeping your home 1-2 degrees cooler in the winter and warmer in the summer to see if this makes a difference on your electric bill.

B) Do you love movies but need to stop paying for your weekly movie rental or theater visit? Go to your town’s discounted movie theater. Or, start visiting your library for movies and TV shows instead of paying for a streaming service.

C) Coupon, but don’t go crazy. Many grocery stores have apps you can use to help you save money. They may have you download coupons or even give you credit for future purchases. There are even apps that give you cash for buying certain items when you shop, on top of the coupons you’ve already used.

3.Think of all the extras you pay for each month and prioritize. You don’t have to eliminate every-thing, just decide what is most important and then cut the rest. If you love video games, then try to cut back on how many you purchase or try to work out a trading system with your friends. If you like having date night every week, look for fun activities that are a little cheaper than dinner and a movie.

The key to budgeting is to stick with it. You have financial goals, and staying within your budget will allow you to reach them!

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Having too many credit card accounts can hurt your credit score.

The number of accounts opened and closed impacts your credit score.It can be difficult to stay on top of payments if you have too many accounts.

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CREDIT CARD

Travel Expenses

Online Purchases

Large Purchases (washer, dryer, TVs)

Bills (even if online)

Everyday Purchases (groceries, dinners, etc.)

Movies, Clothing, Games, Gifts, etc. (small extras that fit into your budget)

D E B I T C A R D OR ELECTRONIC CHECK

CREDIT CARD OR DEBIT CARDW H I C H O N E S H O U L D I U S E ?

Use your debit card when you know you have the funds in the bank. If you overdraw, your credit score could suffer and your account could be closed.

You may think a credit card and debit card are the same thing. At least they look alike in your wallet, right? While they do look alike, there are key differences to consider.To help you stay money smart and keep track of your purchases, here are two questions to help you decide which one to use: 1. Do you have the money to pay? 2. Do you have a repayment plan?

Only use your credit card when you know you will be able to repay in a short amount of time (e.g. by your next credit card bill). If you will not have all of the funds in the bank by your next bill, work out your repayment plan before you purchase. Learn more with

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A credit card is not free money.

Confession: At first it feels like it. You have a card; you can easily swipe it to purchase just about anything online or in-store, but the fact you have to repay, possibly with interest, is easily forgotten.

Having multiple credit cards may be tempting to get that one time good deal, but resist temptation. The hassle of canceling or keeping track of purchases on multiple cards can be a daunting task.

Keep one credit card and always keep track of your purchases and payment due dates.

Everyone has a social security number and therefore everyone has a credit score. That’s why it’s important to be smart about your credit, at any age!

WHAT YOU

KNOW YOU

ABOUT YOURTO KNOW

DIDN’T

CREDITSCORE

NEEDED

Why is Your Credit Score Important?- Do you want to keep your debit card/checking account?- Do you want to find a good job? - Do you want to buy a car? - Do you want to rent an apartment? - Do you want to buy a house? - Do you want to have electricity and water turned on at your new place? - Do you want to be able to buy new furniture?

What is a Credit Score?Your credit score is essentially a reliability score. This number, between 300 and 850, represents the likelihood that someone will repay their debts. If the number is closer to 300, it indicates they are at a high risk of not repaying. This could result in a higher interest rate or a loan refusal. The highest score anyone can achieve is 850.

Any time you need a loan, your credit will be checked to determine if you are at a high risk of not paying back your loan. Also, human resource departments and landlords will check your credit to better understand your character and judge if you will be a reliable employee or tenant. Your credit score is a major factor in your ability to buy, rent or invest in your future.

What Impacts Your Credit Score?- Your credit card purchase and payment history. - Your checking account history. Don’t overdraw. If the bank closes your account, this hurts your credit score and can also keep you from being able to get an account at other banks. - The number of credit and checking accounts you have open. - Bills in your name — pay on time! - If you’re searching for a loan, don’t have too many places check your credit. This activity can lower your score.

If you make a mistake and your credit score goes down, don’t be too discouraged. This is a fluctuating number so here are some best practices for increasing your score, whether you’re just starting out or trying to improve a bad credit score:

1) Create a budget (see page 6) 2) Account for repayment plans in your budget. 3) From now on, always pay bills on time. Set up an alarm on your phone or mark it on your calendar so you never forget when they’re due.

Before You Swipe, Determine if You Should PASS

P lan to Repay How and when can you repay this? Assess Is this a want or need? Does this fit within your budget priorities?

Swipe or Skip? If it’s a need, then swipe. But if you can’t form a payment plan and it’s a want, then be wise and skip the purchase.

4) Before making any more large purchases, remember the acronym PASS (see above).

5) Keep a record of all your purchases, bill payments and income. Keep your checking account balanced and alert your bank of any unknown charges or discrepancies.

Extra Tidbits

Keep your credit maximum low. Your credit card company may increase your max, but call and tell them to keep it at a level you’re comfortable with. Starting out, keep it at less than $500. This will help protect you from large fraudulent charges and encourage you to stay within your budget.

Check your credit report once a year for free at annualcreditreport.com.

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MONEY MANAGEMENT // RENT OR BUY?

There are benefits to both housing situations:

RENTING

Worry-free repairs, maintenance

Flexibility in moving

Privacy

Potential to resell at higher price

Investment in collateral

BUYING

No need for loans

Before purchasing a home, there are many factors you need to consider. There are benefits to both renting and buying, but considering the facts will help you determine the best choice for you.

Many families or young couples want to have their own property and home. But it’s OK if the time to purchase isn’t right now. That’s why budgeting and saving (see page 3) is so important for you to reach your goals.

It’s OK if you’re not ready for the commitment of purchasing a home. If that’s the case, focus on increasing your savings and building credit (How do you build credit? (See page 9.) Consider putting your savings into a short term “can’t touch” option, such as a CD or Money Market Account. These will give you a higher interest rate than a normal savings account, but will still be accessible with a few limitations.

To build your credit, start paying for larger purchases on a credit card and immediately paying them off. Or, take out a small personal loan and make all the monthly payments on time.

If you think you’re ready to buy a home, there are a few things you should do first:

1. Analyze your budget and calculate how much you’ll need.

The American Bankers Association gives a good starting guideline for deciding your initial price range. Of course, your credit history and current income will play a major factor in the loan you’re able to acquire.

Gross Income* x 2.5 = Low Range of House Cost Gross Income x 3 = High Range of House Cost*Your gross income is what you make before taxes or any deductions.

2. Consider the extra costs of purchasing and owning a home.

There is much more than just the asking price for a home to take into consideration as you analyze your budget.

Down Payment: Most loans require 10–20% down on a home.

Closing Costs: Sometimes this is paid for by the lender or by the seller as part of your deal.

Moving Costs: Don’t forget the cost of moving, especially if you plan on hiring movers or renting a trailer.

Future Maintenance and Up-Keep: A home comes with extra responsibility. Can you afford a lawn mower? What if the stove goes out the first month after you move in?

3. Find the right lender

Do shop around for a lender, but don’t let each of them check your credit score. Every time your credit is checked, your credit score could suffer. (For everything you want to know about credit, see page 9.)

Talk with each lender and see if you think you can work with them over the next few months. Pick a lender you feel confident will help you choose the right type of loan for your family.

Visit any of your First Kentucky Bank branches to meet with a loan officer. They can work with you to get pre-qualified before you begin looking at homes. If you’ve already found a home you’re considering, start the pre-approval process for a loan.

Remember this decision is not one to take lightly. Take your time building your savings so you can purchase your home instead of stressing out about the future.

If this is the time to rent, that’s great! You’re stimulating your local economy while enjoying a lower stress housing option. If it’s time to buy, enjoy finding the home that fits your family’s lifestyle and needs!

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THE INTERNET KNOWSEVERYTHING ABOUT ME!

HOW CAN I KEEP MY

ACCOUNTSSECURE?

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It is amazing all the information Google, Facebook and other websites have on each person. Your search history, social post history and online activity contribute to the information database and algorithm these sites work off of.

But, just because they know your interests, hobbies, and possibly even the car you drive, it doesn’t mean they need to know your financial information.

Keeping your account secure should be top priority for your banking institution. But, your security doesn’t fall solely on their shoulders. You need to be proactive in keeping your information secure.

What You Can Do

Protect Your Password & Login Info

Choosing a password should take a little thought. The best passwords are a combination of random letters, numbers and characters.

Don’t choose a password that will be easy for hackers to guess with very little information about you. Your spouse’s name and wedding date isn’t a good password. Nor is your graduation year

paired with your hometown. The reason? These details are all easily found online.

You may think, “No one will remember the year I got married.” While that’s probably true, if it’s listed on your social media account, then it’s not a forgotten number. These sorts of details are what hackers look for when try-ing to break into banking, social media and email accounts.

Do Not Use Public Wi-Fi

It might be convenient, but do not use the Wi-Fi offered in hotels and restaurants.

Be Wary of Checking Your Online Banking Account in a Public Place

Whether you’re on your phone or a desktop, be sure to notice who is standing near you. Can they see your information?

Close Your Browser

When you log out of your banking account, also close your browser. Don’t immediately switch to another site; close your browser and reopen to continue browsing the web.

Install Anti-Virus Software

Download and install a certified, credible anti-virus software, and always download updates as soon as they are available.

Update Your Browser

Make sure you are always using the latest technology.

Regularly Monitor Your Account

Monitor the activity on your account and double check it against your receipts or check register.

Don’t Fall for the Scams

Your bank will never ask for your personal information through email, text or phone call. If you receive a mes-sage asking you to provide your account login, password, social security number or any other personal information, do not provide it and contact your bank immediately.

What Your Banking Institution Should Do

• Use software that monitors suspicious login activity around the clock

• Issue you a secure login, with security questions

• Automatically lock your banking account after three failed login attempts

• Mask a portion of your account numbers online

• Automatically log you out after inactivity in the browser

• Alert you immediately with security and account related messages

As more information and banking tasks are completed online, you should routinely take action to keep your online bank account secure. This is not just on your desktop, but when you’re using your banking app as well.

As you and your bank monitor your online banking activity, the chance of fraud or theft devastating your finances becomes much slimmer. Take precautions, follow the steps above and work alongside your bank to keep your identity and money safe.

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