Thinking Like a Woman Could Pay Off With Credit Cards

Women shop a lot: We make 85% of all consumer purchases, according to data from the research firms Yankelovich Monitor and Greenfield Online. All that shopping means we’re pulling out our credit cards often — and it turns out, perhaps thanks to all that practice, we really know what we’re doing.

On average, women carry about $100 less credit card debt than men do ($5,536 versus $5,635), are less likely to be 60 or more days overdue on their credit card card payments, and have slightly higher credit scores (675 versus 670), according to the credit bureau Experian. “Women seem to be doing a better job at managing their credit,” says Kelley Motley, director of analytics at Experian.

Men might want to take a page from women’s credit card playbook by adopting these four credit card habits.

  1. Don’t be scared to use credit cards responsibly

Women have 23.5% more open credit cards than men do, according to Experian. Despite that, women have lower average overall balances, which suggests they are opening more cards without maxing them out. In other words, they might be opening new ones to strategically score discounts or other benefits, but for the most part, they aren’t getting into trouble by running up massive balances with them. That means many women are reaping the rewards of credit cards — fraud protection, points, discounts — without winding up with crushing credit card debt.

“Rather than just using one card, they may be using different cards, with different rewards structures, to make certain purchases,” says Catey Hill, author of the forthcoming book “The 30-Minute Money Plan for Moms: How to Maximize Your Family Budget in Minimal Time.” “If you pay them off on time and in full each month, rewards cards, even multiple rewards cards, can be very lucrative.”

  1. Understand behaviors that can improve credit scores

Men were more likely than women to say they considered their credit score knowledge good or excellent — 61% vs. 54% — according to a recent survey by the Consumer Federation of America and VantageScore Solutions. But women were actually the ones who reported more accurate knowledge on many factors about how credit scores work. Women had a better understanding of how to raise a credit score and of the factors used in determining credit scores.

“Women might be slightly more conscientious than men about knowing and understanding their credit scores,” said Stephen Brobeck, executive director of CFA. And as for understanding the actions that can raise credit scores, including making on-time payments every month and maintaining a low credit utilization rate, “that’s the most critical information to have,” Brobeck said.

  1. Get your free credit reports regularly

The CFA survey also found that women are more likely than men to understand the importance of checking their credit reports regularly, something all consumers can do for free at annualcreditreport.com. The reports do not include credit scores, but rather the details of one’s credit history. This makes it possible to spot any errors and work to correct them.

According to the survey, women may also be more likely than men to follow through and obtain their credit report — 67% of women said they’d done so, versus 63% of men.

  1. Avoid delinquencies and maintain low, manageable balances

A late payment or delinquency can lower a credit score. Making regular monthly payments to keep all credit cards (and other accounts) in good standing is an important part of building a strong credit history.

“Women are typically the CEOs of their household and know how to stick to a monthly budget, manage day-to-day spending and pay bills on time,” says Kerry Hannon, personal finance expert and author of the forthcoming book “Money Confidence: Really Smart Financial Moves for Newly Single Women.” “When they sense they’re in debt or bumping up against a shortfall, they trim back their budget, slashing discretionary items like meals out or clothing purchases.”

That kind of fiscal conservatism helps prevent a buildup of credit card debt. Plus, keeping balances manageable can help improve your credit utilization ratio, which is a factor in your credit score.

After all, when it comes to your credit score, how you manage your money matters more than the size of your paycheck. While women typically bring home only about 80% of what men do, according to the American Association of University Women, they still come out on top when it comes to credit scores.

“It shows you don’t have to earn a ton to manage your money well, and that you can take control of your finances even on a smaller budget,” says Hill, the author.

In other words, shop like a woman and you might just end up with a better credit score.

This article was written by NerdWallet and was originally published by Forbes.

More about credit cards

Kimberly Palmer is a writer at NerdWallet. Email: kpalmer@nerdwallet.com. Twitter: @KimberlyPalmer.

The article Thinking Like a Woman Could Pay Off With Credit Cards originally appeared on NerdWallet.

 

Do We Have Your Contact Info?

Do we have your most up-to-date contact information on file? If we don’t, we hope you’ll take a few minutes to let us know that something has changed. Help us to better serve you by making sure we have your current mailing address, cell phone number and email address.

Here are three important reasons why:

  • If there’s ever a question or a problem with your account, it’s important we be able to reach you.
  • If we don’t have the correct mailing address or email address, your statements or other correspondence will just come back to us.
  • If we suspect fraudulent activity on your account, we will try to call you. If we don’t have the correct number, or if we just have your home number and you’re away from home, we won’t be able to reach you. This makes it imperative that we keep your mobile number on file.

If you have online banking, log-in to your online account and look for the Online Forms link at the top of the page. From the list of forms, select the Change of Address Form. This gives you the opportunity change your address, email address and phone number electronically.

You can also change your phone number or email address by calling our Customer Service Team at 1.800.542.5004 or by stopping by your local branch.

To change your mailing address, we do require a written request to make the change. This must be signed and dated by the account holder and can be submitted in-person or by mail, email or fax. This precaution is taken for your protection.

It’s a little extra effort for you but it means a lot to us to know we can reach you if necessary. Thanks for your cooperation!

How to Build Credit in (Exactly) 250 Words

What credit is: Your credit reports are records of how you have repaid debt in the past. Credit scores are three-digit numbers that estimate how likely you are to repay a lender or card issuer as agreed in the future. A “credit check” may look at either or both.

Why it matters: Good credit gives you a better shot at borrowing money at a favorable interest rate. It can also mean lower car insurance bills and lower or no utility deposits.

How to begin: Start using credit, which is easier said than done. See if you can get a credit card, perhaps a secured credit card to start. Becoming an authorized user on someone else’s card may help. Student loans, car loans and credit-builder loans also build credit history.

Do I have to go into debt? No. One of the best ways to build credit is using a credit card lightly and paying the balance in full every month.

Understand your score: Most credit scores are on a scale from 300 to 850. It’s smart to monitor your score; you can get a free credit score from some credit card issuers or personal finance websites, like NerdWallet.

Know what affects your score: The biggest things you can do to boost your credit are:

  • Pay bills on time, without exception
  • Use little of your credit limit (under 30%, and under 10% is better)

Other things help, too:

  • Have both credit cards and loans
  • Keep older accounts open
  • Limit applications for credit

Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

The article How to Build Credit in (Exactly) 250 Words originally appeared on NerdWallet.

 

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How Costly Is Bad Credit? Many Don’t Know, Survey Shows

It’s 2017: Do you know what your credit score is?

Good credit is important for many reasons beyond qualifying for the best loan rates. And the very first step in building it is knowing your starting point. But a NerdWallet survey finds that while more than a quarter of Americans (26%) check their credit scores monthly or more often, nearly 1 in 8 (12%) have never checked their scores.

In an online survey of more than 2,000 U.S. adults, commissioned by NerdWallet and conducted by Harris Poll in April 2017, we asked Americans what they knew about the impact of bad credit, as well as factors that do and don’t affect credit scores. Here’s what we learned:

  • About half of Americans (49%) don’t know that having bad credit can limit a person’s options for cell phone service. There are ways to get a cell phone without a credit check, but consumers with poor credit have fewer options.
  • Almost a quarter of Americans (23%) think a person has just one credit score. Most consumers have many scores, and they can vary based on the information used to calculate them. The score provider and score model your lender will consult depends on the reason you’re looking for credit: there are auto-specific and mortgage-specific scores, for instance.
  • More than 2 in 5 Americans (41%) think carrying a small balance on a credit card month to month can help improve a person’s credit scores. This is a common misconception. To avoid interest charges, pay off credit cards each month.

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What you don’t know about credit can cost you

About 40 million Americans have a FICO credit score lower than 600 [1], and many might not understand the impact it can have on their everyday lives, even if they’re not applying for loans or saddled with high-interest debt.

The everyday effects of bad credit

Having bad credit is expensive, and not just because of the high interest rates lenders charge. More than 2 in 5 Americans (43%) don’t know that having bad credit can negatively impact the price of car insurance, and more than half (52%) don’t know that it can negatively impact the cost of utility deposits. These expenses are often cheaper or nonexistent for those with excellent credit, even though they don’t involve borrowing money.

Bad credit can even limit housing opportunities. Many landlords check applicants’ credit reports, but almost a quarter of Americans (23%) don’t know that having bad credit can negatively impact a person’s ability to rent an apartment. And almost half (49%) don’t know that bad credit can limit the ability to get a cell phone. Consumers with bad credit might be restricted to prepaid phones and miss out on carriers’ best plans. It might even be challenging to get certain jobs with poor credit.

Bad credit means fewer credit card choices

More than 1 in 5 Americans (21%) believe that a person with a credit score above 600 will qualify for any credit card he or she wants. Another 40% aren’t sure if a score above 600 qualifies a person for any credit card. In fact, 600 is a below average score and won’t give consumers access to most of the cards on the market.

Consumers with excellent credit have almost eight times as many credit card options as consumers with bad credit do. [2] Those with bad credit miss out on the cards with the best rewards and lowest interest rates, as well as the best purchase protections and travel benefits.

Misconceptions surround credit scores

Why do so many Americans have bad credit? Here’s one possibility: Increases in the cost of living have outpaced income growth for the past 13 years, according to NerdWallet’s annual household debt study. Many consumers might be maxing out credit cards to bridge the gap and then falling behind on payments or defaulting.

Another theory is that Americans simply don’t understand how credit works. Our survey found many misconceptions about credit scores, including the number of scores people have and the factors that go into them.

What’s a credit score?

A credit score is a three-digit number, usually on a scale of 300 to 850, that estimates how likely someone is to repay borrowed money. If you make regular payments to a lender — on a credit card or auto loan, for example — you probably have credit scores.

More than 1 in 10 Americans (11%) think everyone starts out with a perfect credit score. Actually, you must build your scores from scratch — but they don’t start from zero. Want to measure your progress? Your scores won’t necessarily be listed on your credit report, although almost two-thirds of Americans (64%) think they are. The free credit reports available once per year from AnnualCreditReport.com don’t include scores. However, you can get free scores from various sources, including NerdWallet.

The components of a credit score

Five basic factors go into most credit scores: payment history, credit utilization, length of credit history, types of credit in use and new credit.

Payment history: One of the best things you can do for your credit scores is to make payments on time, 100% of the time. You’re best off paying your entire credit card balance, but at least pay the minimum by the due date. Creditors won’t report payments that are only a few days late to credit bureaus, but pay 30 days or more late and you can tank your scores.

Credit utilization: This refers to the proportion of your available credit you’re using at any given time. Between 1% and 30% is ideal, but people misunderstand these numbers.

Possibly because using credit helps your scores more than not using it at all, more than 2 in 5 Americans (41%) think carrying a small balance from month to month can help improve a person’s scores, while one-fifth (20%) think it can hurt it. In fact, whether someone carries a small balance probably doesn’t affect his or her scores at all.

“The idea that you have to carry debt to have good credit is a dangerous, expensive myth that needs to die,” says NerdWallet columnist Liz Weston, author of the book “Your Credit Score.” Carrying a balance will mean you pay interest, but it probably won’t have any impact on your credit — just your wallet.

Length of credit history: This includes the total time you’ve had credit — starting from your first credit card or loan — and the average age of all your credit accounts. It’s a good idea to keep your oldest account open and avoid closing other older, unused accounts unless you have a good reason, like they charge annual fees or you need to shed a joint account. If you do choose to close other accounts, keep length of credit history in mind to limit the negative effect on your scores.

Mix of credit accounts: Having a mix of account types doesn’t have a large impact on credit scores, but it might be helpful to have both revolving accounts, such as credit cards and lines of credit, and installment loans, such as mortgages, auto loans or student loans. You can build and maintain good credit with just one type of account.

New credit: The final factor concerns the number of new accounts you’ve opened or applied to open. When you apply for a credit card or loan, a “hard” inquiry appears on your credit file. Checking your own scores results in a “soft” inquiry that won’t hurt your credit. But hard inquiries aren’t great for your scores, so you’ll want to limit the number of applications you submit.

The exception is when you’re “rate shopping” for a mortgage or auto loan. In these cases, it’s smart to apply at several different lenders to get the best rate. The credit bureaus count multiple inquiries as a single inquiry as long as they’re made within a certain time frame, usually a few weeks.

How to improve bad credit

Improving your credit means working on the five factors above. However, you also might be able to improve your credit by catching mistakes on your credit reports. Most consumers have one at each of the main credit bureaus: Experian, TransUnion and Equifax. You can obtain each of these reports for free once per year.

Once you receive your reports, read each one closely and dispute any errors. Incorrect information could hurt your credit, denying you access to low loan rates, superior credit products and other benefits of good credit.

People trying to build credit commonly run into a catch-22: They need a loan or credit card to increase their scores, but they can’t get approved for a loan or credit card because their scores are low or nonexistent. For example, it’s hard to find good credit cards for bad credit.

Those with poor credit have a few options:

Credit-builder loansThese loans typically have low interest rates, regardless of your credit scores. But there’s a catch: You don’t receive the money from the loan until you pay it off. These loans exist solely for the purpose of building credit. The lender puts the money into a savings account, and you can claim it once you’ve paid the balance in full. The bank will report your payments to the credit bureaus, which should help your scores, provided you’ve made all the payments on time.

Secured credit cardsWith a secured card, you put down a security deposit that’s usually equal to the card’s credit limit, but sometimes is less. This reduces the issuer’s risk. Not everyone who applies for a secured card gets approved, but they’re still a good option for those with bad credit.

Secured cards aren’t prepaid, so it’s critical that you pay off your charges each month. After “graduating” to an unsecured card or closing the account in good standing, you’ll get your deposit back.

Secured personal loans: If you want to build credit but also need a loan, a secured personal loan might be the way to go. These allow you to borrow against a car, savings account or other assets, including such things as a recreational vehicle or furniture. The rate will likely be higher than it would be on a credit-builder loan, but you’ll have access to the loan money.

“You don’t need to carry credit card debt to have great credit scores,” Weston says. “But you do need to have credit accounts and use them responsibly.”

Methodology

This survey was conducted online within the U.S. by Harris Poll on behalf of NerdWallet from April 6-10, 2017, among 2,250 adults ages 18 and older. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact cc-studies@nerdwallet.com.

Footnotes

[1] According to Ethan Dornhelm, principal scientist at FICO, there are about 40 million U.S. consumers with credit scores below 600. There are an additional 53 million Americans who can’t be scored because they have too little information on their credit file or no credit file at all.

[2] According to the NerdWallet database of more than 1,200 cards, there are 7.7 times as many cards available to those with excellent credit compared to those with poor/bad credit.

How Much 20-Somethings Should Save

Your 20s may seem like an odd time to think of retirement, but it’s actually the perfect moment to start planning for your later years. That’s because the earlier you start saving, the more time your money has to grow.

Savers who begin setting aside 10% of their earnings at 25, for example, could amass significantly more by retirement age than those who wait just five years to start saving. You can use online calculators to see how much starting saving now can produce once you reach retirement.

Building a nest egg on a starter salary and a shoestring budget can seem daunting, though. Focusing on the incremental savings, rather than the goal, can help your savings objectives feel more manageable.

How much to save for retirement
For those earning around $25,000 a year, the median income for 20 to 24 year olds in 2015, saving the recommended sum of 10% amounts to a little more than $200 a month.

It may seem like a reach, but consider this: If you start saving $100 a month at age 25 and invest it to return 7.7% a year — the average total return of the Standard & Poor’s 500 Index of U.S. stocks over the past decade — you’ll have more than $378,000 available at retirement age. And it could be tax-free.

If you wait until you’re 30 to start and save the same monthly amount at the same rate of return, you’ll wind up with less than $253,000.

Several vehicles can help you build a retirement fund. A 401(k) contributory plan, typically offered by your employer, is often the most convenient and easily accessible of these. Contributions you make usually aren’t taxed, which helps reduce your income tax liability.

Pre-tax 401(k) accounts make up around 80% of retirement plans offered by employers, according to the American Benefits Council. Roth 401(k) accounts are another option, though these are less widely available, and money contributed to a Roth 401(k) account goes in after it’s taxed. Money withdrawn from this type of account — including earnings — is usually tax-free.

Companies that offer a 401(k) plan often match employee contributions, up to a certain percentage. This is essentially free money toward your retirement.

If your employer will match your contributions, try to take full advantage and commit a large enough percentage to get the full benefit.

Beyond a 401(k), individual retirement accounts, commonly referred to as IRAs, offer another solid option. There are two types: traditional and Roth.

Money put into a traditional account is tax-deferred, similar to funds put in a traditional 401(k) plan. That means those funds aren’t taxed until they’re taken out. But typically any earnings you make with the money are also subject to income taxes on withdrawal.

Money put into a Roth IRA has already been taxed when you earn it, so there’s no immediate tax benefit. When it’s time to withdraw the cash, however, you usually don’t pay taxes on it. And anything the money earns also can be taken out tax-free.

Contributions to both types of IRAs are currently capped at $5,500 a year for those under age 50, and $6,500 for older workers.

How much to save for emergencies
In addition to retirement, it’s also wise to save for a rainy day. Ideally, your emergency fund should be enough to cover three to six months of living expenses.

Some experts suggest setting aside even more for savings and investments: 20%. That’s roughly $415 a month on an annual income of $25,000.

That’s not always feasible, especially if a big chunk of your monthly income goes to student loan and credit card payments. Consider saving what you can, even if it’s just $10 a month.

Making a habit of saving now could serve you well down the road. And, as your income increases, the percentage you save can as well.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 

A Quick Look: Simplify Your Banking

Most of us lead busy lives. In the spirit of Simplify Your Life Week, we wanted to do a quick summary of some ways you can simplify your banking and {hopefully} free up time for things that are important to you.

Online and Mobile
Gone are the days you have to wait for the mailman to bring your monthly statement. You can still do this but you can also just log in to your online account and see your current balance, past statements, current statement and even pay bills, open an account or prequalify for a loan. It’s free and easy to use our website, plus it gives you greater control over your own money. With VCNB Mobile, you’ll find a one stop shop for your quick banking needs. This is free app gives you access to your deposits and loans from your mobile device. Here you can also pay bills, transfer funds and even deposit a check. It’s like carrying around the bank on your phone.

Want to know more? Here are some specifics!

Online Bill Pay
Many customers seem to think Online Bill Pay is the greatest thing since sliced bread and we are inclined to agree. Set up recurring bills to automatically pay at your convenience or log in and pay a single bill. Either way, it saves using checks and stamps. It also guarantees your payment will be taken from your account when you say. It’s free as long as you use it at least once a month. The great thing about Bill Pay is that it requires so little effort and time to keep paying bills within your complete control.

Popmoney® personal payment service
While Bill Pay helps you pay bills, Popmoney allows you to send funds electronically to individuals. All you need is the person’s email address or mobile phone number. They will receive a text or email notification that your money is waiting for them. They can deposit the money into the checking or savings account of their choice.

Mobile Deposit
Have a check but no time to hit the bank? Deposit it using VCNB Mobile and the camera on your mobile device. You can deposit funds in to the VCNB checking or savings account of your choice for free!

Account Alerts
You don’t even have to log in to keep up with activity related to your checking account, savings account, certificate of deposit or loan. There are nineteen notifications to choose from, allowing you to receive an email or text for activity that interests you. Want to know when your debit card is used or when your checking balance dips below a certain amount? Request reminders for when your loan payment is due or late and even get an alert when your CD is about to mature. Sign up for this free service online.

A Few More Things
Our website and mobile app provide a host of other ways to simplify your banking and save you money. For example, if you’re in the market for a new home, use our online pre-qualification to learn how much you can afford. Open accounts online, track the UChoose Rewards® you earn with Rewards Checking, request a credit increase for your credit card and even chat online with someone in customer service!

Life is too short to waste time on banking. Streamline your banking and your money management with these and other great products at VCNB!

VCNB Tips and Tricks To Keep Your Vacation Running Smoothly

School is letting out across our region and summer vacations are underway. You’ve packed the sunscreen, boarded the dogs and loaded the car but you might not have considered things you should do for your vacation finances. Whether you’re flying to Florida or headed to the mountains, there are some basic things you can do to keep your finances running smoothly and to insure you aren’t stranded somewhere with no access to your money.

Here’s a checklist of some things you can do:

  • Update Your Phone Number With VCNB – In recent years we have seen a spike in fraudulent activity. That’s why we have a talented team to detect and prevent this kind of crime. If we notice activity that’s outside of your normal spending pattern, our fraud department may turn off your card and call you to verify the attempted purchases. If you’re at a gas pump far from home and the only number we have on file is your home number, you won’t understand why your card isn’t working and we will have no way to contact you. PLEASE, take a moment to contact your local branch or our Customer Service Department and give us your mobile phone number.
  • Give Us a Heads Up – If you know you’re traveling, let Customer Service know where you’re headed. It takes just a minute and we appreciate hearing from you.
  • Plan A Second Form Of Payment – Always carry a second form of payment. We actually advise this even when you’re just tooling around town close to home but it’s especially important when you’re far from home. If you plan to use your debit card for primary spending, take a credit card, some cash and/or a prepaid card. VCNB offers credit and debit cards as well as prepaid and gift cards that can be used anywhere Mastercard© is accepted.
  • Download CardValet® – Knowledge is power, especially where your money is concerned. If you haven’t tried it, Card Valet is a fantastic way to keep up with activity on your VCNB cards and even to control how, when and where your cards can be used. With the Card Valet app, you can turn your cards on when you need them and turn them off when you don’t. You can also receive alerts whenever your card is used and place limits so that it can only be used at merchants you choose. You can even place spending limits on your card. This is free and easy to use! Look for CardValet in the app store on your mobile device.
  • Use Account Alerts– Another way to keep up with your money is to sign in to your online banking account and register for account alerts. You can receive a text or email whenever there is activity on your account, when your balance dips below an amount you decide and for a host of other reasons. Knowing how much money is in your account will help keep your spending under control and seeing activity on your account will help you spot unauthorized purchases. This is a free perk of online banking with VCNB.
  • Don’t Forget To Pay Your Bills – Being away on vacation doesn’t give you respite from paying bills. If you have bills due while you’re away, use Online Bill Pay to schedule payments while you’re gone. This is a free service of VCNB online banking, as long as you use it at least one time each month.

Vacation is supposed to be fun! Don’t let money, bills or card problems ruin your relaxing time away. Remember, VCNB Mobile and our http://www.vcnbfamily.com/ are here whenever you need them! You can also call our Customer Service Department at 1.800.542.5004 during business hours.

Teach Teens Money Skills With Student Checking

Every parent wants their child to succeed in life. One way to help them get off on the right foot is to give them a strong financial foundation on which to stand, build and grow. That does not necessarily mean giving them a lot of money but instead helping them understand how to use and manage the money they do have.

Whether they have just a small weekly allowance, pay from an after school job, or have a large savings, it is important for young people to spend their teen years learning how to pay for things and how to manage a checking or savings account.

One way to accomplish this is to help them open a Student Checking My Way account at VCNB. This account is designed especially for teens ages 14-17 and provides them with access to a traditional checking account with mobile and online banking, a debit card and account alerts.

Young customers will have access to a debit card and the spending abilities that come with it.

The account also comes with a host of ways to safely monitor activity and to manage the account electronically. Account alerts can be set to notify you or your teen of account activity. Sign up to receive a text or email for a variety of account activities including whenever the debit card is used or when the balance falls below an amount that you set.

Online banking and mobile banking make it easy to see where and when money is spent, to transfer funds between accounts and to view bank statements.

We encourage parents and teens to work together so that young people are experienced at handling their bank account and prepared to manage their funds by the time they graduate high school. This very basic step can make a tremendous difference when a young graduate is venturing out into the world.

Remember though, a parent or guardian must be made joint account owner. This account can be opened online or in any of our sixteen banking centers.

 

 

 

 

 

 

 

 

 

How To Budget When You Have Seasonal Income

Rewarding careers don’t always come with a steady paycheck. For people who work in agriculture, construction, tax preparation, entertainment, landscaping or other types of freelance and seasonal businesses, income may vary wildly depending on the time of year. This uneven cash flow makes budgeting especially challenging, but it’s by no means impossible.

Here’s how to budget for long-term financial stability when your income changes with the seasons.

Determine your average monthly income
With most traditional budget plans, you start by determining your monthly income. But how can you complete this first step if your income keeps changing? The most effective strategy is to use your average monthly income. To calculate this, add up your post-tax income for the past three or more years and divide that sum by the total number of months. If economic conditions have — or are projected to — hit your industry or business hard, you may want to deduct 15% to 20% from this number to create a safety cushion.

Calculate your average monthly expenses
When work is seasonal, expenses often fluctuate, too. During busy times, you may have to spend more on gasoline, utilities, equipment maintenance and office supplies. If you spend more during your busy season, determine your average monthly costs by adding up your personal and work-related expenses for at least one year and dividing that figure by the total number of months.

Fine-tune your budget
Subtract your average monthly expenses from your average monthly income to get your baseline budget figure. If you find you’re cutting things close or dipping into the red, you’ll need to make some adjustments. Consider cutting unnecessary expenses or picking up extra income by expanding your existing business’s volume, taking temp work during slow times or offering complementary services that peak during your off-season.

Become a saver
Having a savings plan is an especially important safety net when income is irregular. When planning your budget, be sure to include a line for saving each month. It’s best if you can put away 10% or more of your income, but even small amounts deposited consistently add up significantly over time with compound interest. Aim to save at least three to six months’ worth of expenses to ensure you can live comfortably during lean times or emergencies.

Additional survival tips
To help even out cash flow and make the most of seasonal income:

  • Make it easier for customers to pay you quickly by improving your invoicing procedure, offering options such as PayPal or Square to accept credit card payments, or setting up direct deposits to your account with customers.
  • Negotiate with vendors and suppliers for discounts or extended payment terms.
  • Take advantage of financial and budgeting software such as QuickBooks.
  • Consider offering discounts and promotions during slow times to boost business.
  • Track your cash flow regularly and adjust your budget as necessary.
  • Even with your budget plan in place, keep spending to a minimum during slow seasons.
  • Stick to your budget during your busy season to avoid spending the cash you’ll need during the down times.

Seasonal income doesn’t have to mean financial feast or famine. With proper budgeting, you’ll be able to live well no matter what the season.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

What’s On Your Wish List?

2017 Construction & HELOC - VCNB (Rt. 93S & Rt. 50 Clear Channel Lamar)

What’s on your wish list? A big kitchen for family meals? Perhaps a new garage to protect your vehicle from the weather? How about a pool just in time for summer parties? With a Home Equity Loan at VCNB, you can make these dreams come true. Open a new Home Equity Line Credit before April 30 and receive an introductory Annual Percentage Rate (APR) of 2.99%.

A Home Equity Loan or HELOC is a revolving form of credit that uses your home as collateral. The amount of your credit line depends on how much equity you’ve built up in your home. Lots of homeowners enjoy using the equity they have achieved in their homes to make improvements that will increase their resale values or enhance their quality of life.

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Want to speak with a lender? Contact your local VCNB office or chat with a lender from our website!