Houston Defender: Financial Edition: April, 2014

FINANCIAL

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APRIL 17 | 2014 | DEFENDER

Special Edition

Wealth expert shares

PHILOSOPHY

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By TIFFANY WILLIAMS Defender

lanning for your financial future can seem overwhelming, especially if you are unsure of where to start.

Houstonian Cheryl Creuzot has some advice. She is president and CEO of Wealth Development Strategies, one of Houston’s oldest comprehensive financial planning firms. Here at 10 tips from Creuzot on beginning your journey to financial success.

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Be aware of where you are financially. Spending but not knowing where you are financially is like knowing you should be on a diet but being afraid to get on a scale.

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Know your income, what is coming in, as well as your outflows, what is going out. There are several systems available to help you track your spending such as Quicken, QuickBooks, or Mint. Most of these programs will merge with your bank electronically, so you don’t have to write anything by hand.

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Lay a solid foundation. Take care of the “what ifs,” such as a loss of income, getting sick, becoming disabled, dying too soon or living too long.

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To lay that foundation, you will need a focus on debt reduction, health insurance, disability insurance, life insurance and access to long-term care if over 50.

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Create an emergency fund with at least three to six months of income. Most people are ill-prepared when unexpected financial situations arise because they live paycheck to paycheck.

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Establish your long-term goals such as retirement, financial independence or college funding. Once your foundation is set, then you can start working toward your growth goals.

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If you expect your child to go to college, start saving for it as soon as he or she is born.

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Hold yourself accountable. Use a debit card if you can.

It’s more difficult to stay on budget with a credit card because it doesn’t come out of your bank account immediately.

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Set where you’re trying to go. Establish what your shortterms goals are such as buying a home or car or starting a business in a few years. Take the time to put these goals on paper.

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See a financial planner to quantify what it will take to reach your goals. Then, start stepping and moving in that direction. You may need to start downsizing.

About Cheryl Creuzot Hometown Washington, D.C. Education B.A. with honors, University of Houston M.B.A. with honors, UH Bauer College J.D. and LL.M., UH Law Center Involvement Texas State Bar Registry of Financial Planning Practitioners l

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Financial Planning Association Million Dollar Round Table, Houston branch UH Dean’s Advisory Board Trustee, UH Foundation Board of directors, Unity Bank; MD Anderson University Cancer Foundation Board of Visitors Awards Corporate Sector Achievement Award, UH Law Alumni Association l l l l l

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UH Distinguished Alumni Award Women of Distinction Award, Houston Crohn’s and Colitis Foundation National Black MBA Leadership Empowerment Award, Houston Chapter Houston Easter Seal’s Hats Off to Mothers honoree Family Married to Percy Creuzot III; three children l l

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FINANCIAL

DEFENDER | APRIL 17 | 2014

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Table of Contents The KBC helps improve financial IQs

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BBVA Compass Bank

Be prepared for the home-buying process

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Amegy Bank

Know your credit score: 720 is the new A+

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Wells Fargo Bank

Prepare your kids for financial success

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Develop financial strategies at any age

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BB&T Bank

Financial knowledge is key to success

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Capital One Bank

Financial security begins with fiscal fitness 14B Cadence Bank

How to make homeownership a reality

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JPMorgan Chase Bank

Start a kitchen table economics conversation 18B

Message from the Publisher

Managing your money takes work

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Sonceria Messiah-Jiles

his special financial issue is focused on something that impacts us all – money – and the timing couldn’t be better.

First, April is Financial Literacy Month, a time to educate Americans about their finances. Second, the deadline for filing taxes just passed, and tax refunds received will provide an excellent opportunity to jumpstart savings accounts.

In most instances, managing money is not something we’ve been taught in school, but it should be. It’s also a subject parents rarely talk to their children about in detail. Once again, it should be.

Because many of us lack in-depth financial knowledge, we often fall in a trap where we’ve overextended ourselves or find ourselves living from paycheck to paycheck.

There’s another reason why many of us are struggling. We try to satisfy our wants instead of our needs, and end up with very little savings and a whole lot of debt.

It all boils down to discipline, which is easier said than done. But it’s actually a simple equation.

The best way to save money is to pay yourself first and then pay everyone else. You might say this is silly because of all the bills you have to pay. But

who are your working for, your bills or yourself?

Managing money takes work. So if you need to dig yourself out of a financial hole, don’t just sit there, take action. Make a budget and stick with it.

Cut costs. Use credit cards wisely. Work out a payment plan with your creditors. Work on improving your credit score.

Technology offers you a number of advantages as well. Take your savings off the top before it goes to direct deposit and live on what’s left. Use online banking to help pay your bills on time.

You determine your destiny based on your choices. Now go to work and work your plan to win.

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FINANCIAL

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Is debt weighing you down?

Defender News Services

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Debt Boot Camp graduates were honored at a celebration held at the Kingdom Builders’ Center.

The KBC helps

improve financial IQs

By MARILYN MARSHALL Defender

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ntrepreneurs and individuals seeking to improve their financial IQs have found assistance at the Kingdom Builders’ Center (KBC).

In addition to serving as a multi-purpose facility where Houstonians can “convene, connect or celebrate,” the KBC offers several financial programs. They include the Debt Boot Camp Program, the Entrepreneurial Learning Center and the Construction Contractors’ College.

The boot camp, sponsored by Capital One Bank and Windsor Village United Methodist Church, promotes fiscal responsibility and economic self-reliance.

“At the completion of the nine-month course of study, all participants who have followed and were committed to the plan see their credit scores rise, their total debt decline and their sav-

ings balances increase,” said Tandelyn Weaver, the KBC executive director.

Weaver said the KBC’s Entrepreneurial Learning Center is where ideas and innovation power success.

“The programs nurture the development of small businesses, helping them to create and retain jobs; providing them with mentoring, management guidance, technical assistance and consulting tailored to their specific needs; providing access to appropriate space and technology support services; and providing access to obtaining the capital necessary for growth that will allow job creation,” Weaver said.

The KBC’s newest offering is the Construction Contractors’ College, which will improve participants’ chances of getting a piece of the $2 billion pie in Houston government and private sector contracts. It is also funded

by Capital One. “The 18-session program is designed to equip minority small

Many Americans of all ages are overwhelmed by debt. If you’re having trouble paying any debts or bills, there are ways to gain control.

Here’s some advice from the Federal Deposit Insurance Corporation (FDIC).

If you think you won’t be able to make a loan or bill payment, contact the lender or others you owe. Lenders, utility companies and other businesses may have solutions to help consumers who can’t make their payments. If you can’t make a payment on your mortgage, call your lender or loan servicer as soon as you can, because if you default on the loan, you could lose your home.

Consider getting assistance from a reputable, nonprofit housing counselor (for rent or mortgage difficulties) or a credit counselor (for other debt). A counselor can help if you have trouble paying your bills or if you expect to in the future.

Be on guard against scams.

Con artists “guarantee” loan approvals or promise to settle debts for less than is owed, then collect high upfront fees for assistance that never materializes.

Remember that you have rights. Federal and state laws generally require that you be treated fairly and without harassment by those attempting to collect debts you may owe others.

If you are contacted about a debt owed by a deceased relative, be careful. “Collectors may tell the family that they are responsible for the debt of the deceased, even when they have no such legal obligation,” said Evelyn Manley, an FDIC senior consumer affairs specialist.

businesses in construction and construction services who have been in business at least one year with the necessary tools to bid and win contracts in the public and private sectors that helps them creating living wage jobs,” Weaver said.

“Awarded contracts will provide disadvantaged small businesses with an improved economic ability to offer local citizens living wage jobs.”

Weaver said all of the programs are important to the community.

“They seek to improve the economic conditions of lowincome families that have been disproportionately affected by the economic downturn,” she said.

“Small businesses are prepared for procurement and other business opportunities that help them provide financial stability and improved quality of life.”

The KBC is located at 6011 West Orem Drive. For information call 713-726-2519 or visit thekbc.com.

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FINANCIAL

DEFENDER | APRIL 17 | 2014

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Be prepared for the

home-buying process

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By BBVA COMPASS

hile owning a home is a major financial decision, it may also provide a good measure of financial security. More than a fifth of all applicants for home loans in 2012 were denied, however, which hits home how important it is to be prepared — and realistic — about the process.

“Buying a home can be a complicated process, with weighty decisions at nearly every turn,” said BBVA Compass Real Estate Lending Executive Director Jon Mulkin. “The best thing anyone can do is be prepared so their expectations are in line with reality.”

Finding a lender and working with a mortgage officer who will speak frankly with you after they size up your situation is key, he said.

A realistic look at your qualification for a mortgage Ask yourself these questions:

What is my credit history? If it’s lower than it needs to be, raise it by consistently paying your bills on time and reducing outstanding debt. There are several useful tools that allow you to determine how much your score would change based on certain activities — paying off a credit card, for instance, or getting a raise. You can obtain one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies by visiting www.annualcreditreport.com or calling 877-322-8228.

Do I have enough saved for a down payment and closing costs? The more you are able to put down on your loan could result in better loan rates. However, there are low-down-payment loan programs available for borrowers where that makes sense.

(BBVA Compass offers such options. See sidebar.)

Know your debt-to-income ratio. Lenders usually require the principal, interest, taxes and insurance of your housing expenses to be less than or equal to 25 to 28 percent of your monthly gross income.

Calculate your “back-end” ratio. Lenders also usually require housing expenses plus long-term debt — student loans, for example, or child support obligations — to be less than or equal to 33 to 36 percent of your monthly gross income.

At this stage, you may want to consider getting pre-qualified by a lender. Pre-qualification is an informal way to find out how much you would likely qualify for. The lender takes some basic info over the phone, including your employment, income, down payment information and outstanding debts.

Ready to start looking?

In tight markets, it’s likely that a seller would consider a buyer who’s been pre-approved more seriously than one who’s been pre-qualified. Pre-approval is an actual commitment from the lender to lend you money. It lets you know how much of a mortgage you can obtain and tells sellers you are prepared to buy a home.

To obtain pre-approval, assemble pay stubs and W-2 forms for the last two to three months, tax returns for the last two years, information about your assets and debts, bank statements and proof of additional income.

Then it’s time to choose a mortgage option. Here are some examples: Fixed-rate mortgage (term is usually 15 or 30 years) l

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Loans for those with lower down payments* 100% Financing • Property must be located in low-tomoderate income census tract • Borrower must contribute at least $500 • No income limitation 97% Financing • 3% down payment required • Property can be outside low-tomoderate income census tract • Borrower maximum income cannot exceed 80% of HUD median income • Minimum credit score: 620 95% Rate/Term Refinancing • Maximum income cannot exceed 80% of HUD median income FHA Product • Minimum Credit Score: 580 • FHA guidelines apply * The mortgage terms above are for BBVA Compass products only.

Pay the same principal and interest amount each month at a fixed interest rate for the life of the loan.

Adjustable-rate mortgage (ARM) The interest rate adjusts based on an index; usually the rate is fixed for a certain amount of years, then automatically adjusts each year based on an index and margin.

Interest-only mortgage: l

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BBVA Compass’ classes 2014 Southeast Texas Fair Housing Conference When: April 24, 2014 Time: 10:30 a.m. – 11:45 p.m.

Where: Beaumont Civic Center, 701 Main in Beaumont Financial Empowerment Conference 2014 When: June 28, 2014 Time: 10 a.m. – 4 p.m.

Where: Fountain Life Center, 14065 S. Main Street in Houston You pay only the interest on the mortgage in monthly payments for a fixed term.

Biweekly payment mortgage: Usually fixed-rate conventional mortgages with payments due every two weeks.

“When it comes to loans, there’s no such thing as onesize-fits-all,” Mulkin said. “Work with your lender to find out what’s best for you. Ask questions, think through different scenarios.”

What if you’re ultimately denied?

First, you aren’t alone. In 2012, about 22 percent of all applications for home loans were denied, according to Home Mortgage Disclosure Act data.

Second, don’t despair. Many applicants who’ve been denied then go on to obtain some of the most favorable loan terms. Start by tackling the issues, whether it’s your credit score, down payment and expense levels. Also, attend a local homebuyer’s education class. (See sidebar for BBVA Compass’ classes) “It’s all about getting yourself in the best position possible to step into the American dream,” Mulkin said. l

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Lending our support.

At BBVA Compass we believe smart mortgage lending helps build strong neighborhoods and communities. That’s why we’re committed to helping more people achieve the dream of home ownership.

Our suite of mortgage options provides creative solutions to help get you one step closer to your dream home. Our products and services may make it easier to qualify and may require a lower equity requirement with no down payment.

Call today and let me help you get started.

Skip Scott Mortgage Banker NMLS#298164 832-316-5279 skip.scott@bbvacompass.com Apply online at www.bbvacompass.com/mortgages/sscott

Loans subject to program eligibility, collateral, underwriting and approval, including credit approval.

BBVA Compass is a trade name of Compass Bank, Member FDIC. Compass Bank is an Equal Housing Lender.

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FINANCIAL

DEFENDER | APRIL 17 | 2014

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Know your credit score:

720 is the new A+

By AMEGY BANK

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uring our early years, achievements are measured in As and Bs. However, once the reports cards have gone away and we gain more financial responsibility, we should strive to attain a minimum rating of 720 or higher, also known as your credit score.

Understanding how your credit score impacts your ability to purchase a car, a home, and other major expenses can help you achieve these milestones sooner than later.

Here are some commonly asked questions: What’s the significance of my credit score?

Your credit score is one of the most important pieces of information used to determine your credit worthiness when applying for a loan. A credit score represents your historical financial performance and is made up of the following criteria: 35%: payment history (paying promptly is highly valued) 30%: outstanding debt and available credit (try to keep all payments below 25% of income) 15%: length of time you have had credit (the longer your credit record the better) 10%: the amount of inquiries on your credit report (many inquires in a short period are viewed negatively) 10%: current types of credit = Credit Score The above criteria will produce a number between 300 and 850, which is known as your credit score. A credit score of 720 and above is considered good and will generally allow you to be approved for a loan more easily and at a better interest rate.

A lower credit rating can negatively impact your ability to get additional credit, buy a car, rent or buy a house and sometimes even get a job.

How does my credit score affect my chances of getting a loan?

Whether you are purchas-

ing a new home or applying for a credit card, your credit score will be considered in the loan approval process. As a general rule of thumb, the higher your credit score, the better.

Credit agencies consider a credit score as an indicator of your ability and willingness to repay any debt, which means a higher score will likely get you approved for a larger loan amount or credit limit. A higher score may also get you a lower interest rate and, as a result, lower monthly payments.

For home loans, keep in mind that you need a minimum credit score of 620 to get a con-

ventional mortgage loan and a minimum credit score of 580 to get a loan through the Federal Housing Administration.

How will opening a credit card impact my credit score?

A credit card, when used appropriately, can have a positive impact on establishing and maintaining good credit by proving you can manage credit responsibly. Owning a credit card allows the borrower to earn a higher credit score by making timely payments, having available credit, and building credit history over time.

There are many types of credit cards that can meet a variety of needs depending on where you are in your financial journey.

Also, many cards offer rewards or cash back options that can provide savings on every day purchases while benefitting your credit score in the long run.

What are some other ways that I can improve my credit score?

It is important to understand that repairing a credit score isn’t a quick fix, but something that can be done over time with consistent, positive credit behavior. However, there are actions you can take right away that will help improve your score going forward: Request a copy of your credit report, which can be done at no charge once a year through one of the three major credit bureaus (TransUnion, Equifax, and Experian). Review and dispute any errors you may find on your report.

Set up automatic payments.

As mentioned before, payment history makes up 35% of your credit score, so take advantage of tools that help you make your payments on time.

Decrease outstanding debt, increase available credit. Come up with a payment plan for your outstanding debt, and stick to it! Paying off debt with the highest interest rate should be your priority.

While it may take some time to see the benefits of this plan reflected in your credit score, you will enjoy watching the “amount due” on your monthly statements get smaller and smaller.

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A rewards program as big as Texas

Anything you buy can now be your reward.

FOR EVERY DOLLAR SPENT IN THE FIRST 90 DAYS 1

See all the benefits and learn more at amegybank.com/bigastexas or call 713-232-1920.

follow us on

amegybank.com

Š 2014 Amegy Bank N.A. Member FDIC.

*Credit cards subject to credit approval. Certain terms, conditions and restrictions apply.

1 Customers earn two points for every dollar spent on net purchases only during the first 90 days of account opening. At the end of the three months, cardholder will earn one rewards point for every dollar spent on net purchases only. Rewards points are not earned on cash advances, balance transfers, fees, quasi-cash such as travelers' checks and money orders, accumulated interest, returned merchandise, ATM transactions, unauthorized charges, fraud charges, foreign cash transactions, casino gaming and betting, and lottery tickets.

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FINANCIAL

DEFENDER | APRIL 17 | 2014

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Prepare your kids for

financial success

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By CARY YATES Wells Fargo

o you want to set your kids up for future financial success? Then start now. That’s the first rule of introducing your kids to financial education – the sooner you start, the better.

Money management is probably the last thing on the minds of most kids – if it even registers at all – but there are concrete steps you can take as a parent to help ensure that your children know how to think about money, including the importance of saving for the future.

If you plant those seeds with care, they’ll take root, and your children will be much more likely to achieve financial success later in life.

So what lessons can we give today’s children and young adults to prepare them for financial success in the future? Today’s kids are much more likely to spend rather than save. Even parents who try to teach their children about finances, such as by giving them a regular allowance, might find their lessons overshadowed by stronger messages that come from advertising, or from children’s peers.

Unfortunately, by the time most young people Cary Yates graduate from high school, they know all about spending and very little about saving or spending wisely.

Consider these facts: • American teenagers spend most of their income – about 21% – on clothing, followed by food (18%); accessories and personal care (10%); shoes (9%); carrelated expenses (8%); electronics (8%); music and movies (7%); video games (6%); concerts and events (6%); other expenses (3%); books (2%); furniture (2%). (Source: Piper Jaffray, 2013) • Most students devote about one half or more of their earnings to discretionary spending on relatively short-term wants and needs. (Source: University of Michigan Institute for Social Research, 2014) • Teenagers spend about $100 billion a year, and children under 12 spend $11 billion a year, of their own money. They influence 75%, or approximately $165 billion, of their parents’ money. (Source: Answers.com, 2014) Recently, thousands of bankers, including many from Wells Fargo, connected with kids in classrooms and after-school programs across the country during the annual

American Bankers Association’s Teach Children to Save Day. These efforts will help young people take an important first step in mastering their financial ABCs. In addition, Wells Fargo is committed to using the entire month of April to highlight the financial education programs it offers to children, teens, young adults, and adults year-round.

Five Tips for Parents

Parents play a crucial role in their children’s financial success later in life. Here are five tips for parents from Wells Fargo: 1. Start early. Before they even start school, children begin to understand the process of managing money.

2. Set goals. Have children write down things they want and what they cost. Teach them about making choices and saving.

3. Pay a modest allowance. Just a small amount can help children learn.

4. Make a budget. Start with three categories: spend, save, give.

5. Use Free Resources. Check out your local library, and the Hands on Banking® website a parent-

tested, parent-approved program available free at handsonbanking.org; Wells Fargo’s children’s financial success resource center at www.wellsfargo.com/resource_ center/childsfuture; and your public library, which likely has a number of good books on the topic.

A tip for children ages 3-7: Take three jars and label them separately: Spend, Save, Give. Help the children split up their money into each jar and watch it grow as they save and disappear as they spend.

A tip for pre-teens, ages 8-12: Create a short- term savings box. Have the pre-teens choose something they want (a brand name pair of shoes or a video game system). They will learn the value of savings when they save enough to purchase the item.

A tip for teens, ages 13 and up: Open a savings account for long-term savings. Have teens save a certain percentage for a few years to make a bigger purchase.

Parents should ask their banker for more ideas and advice. Their child’s long-term financial security is at stake. By starting early, they can help their child develop good financial habits that will last a lifetime.

Cary Yates is the market growth & development manager for Wells Fargo in Houston.

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Made the honor roll Lettered in track Not so sure how interest works They don’t learn everything they need to know in school. So come in to Wells Fargo together, and we’ll show your family how our products, services, and resources just for parents and teens may help get them off to a great start financially.

Join us for Teen Financial Education Day

Saturday, April 26, 2014, at your nearest Wells Fargo location to learn more.

© 2014 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (1183833_11606)

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DEFENDER | APRIL 17 | 2014

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FINANCIAL

Develop strate

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ong-time financial planner James Marshall is optimistic about the financial future for AfricanAmericans.

As CEO and founder of Marshall Wealth Planning in Houston, he cites steady growth in the net wealth of his mostly Black clientele.

“I’ve seen a real change over the last 35 years,” he said.

Despite Marshall’s encouraging experiences, the Institute on Assets and Social Policy cites a $152,000 increase in the racial wealth gap between Blacks and whites between 1984 and 2009.

Further, the 2014 Corporation for Enterprise Development Scorecard reveals that two in three households of color lack adequate cash reserves.

Still, Marshall and other money experts insist now is as good a time as any for seniors, families and singles to improve their finances through sound financial strategies.

Singles

James Marshall

Donald Bowers learned early on, when he was much younger and single, about the dangers of fiscal mismanagement. As a college student partly lured by the promise of a free t-shirt, he signed Donald Bowers up for his first credit card. Bowers intended only to purchase a pair of flashy tennis shoes, but couldn’t resist also buying a sweat suit to match.

“So here I had a $500 credit card maxed out from just one shopping trip,” Bowers recalled lightheartedly.

But, Bowers still grimaces at the fact it took him five years and a lot of late payments to clear the balance. The ding on his credit also slowed the process of him later purchasing a home.

“It’s a lesson learned the hard way,” he said.

Today, Bowers serves as an assistant vice president for the Federal Reserve Bank (FRB), Houston Branch, where he oversees economic education and community development activities.

One of his biggest pieces of advice for single individuals is to pay special attention to managing debt related to college and other

career-readiness training.

Jackie Hoyer, FRB senior community development advisor, agrees. She stressed the importance of singles distinguishing between wants and needs and minimizing the amount of college loans they assume.

Both Hoyer and Bowers point to research showing that 15 percent of young people who graduate from college in Texas will default on student loans within the first three years of graduation.

“So then they’re strapped with these student loans…and it’s going to be with them for a while,” Hoyer said.

In addition to managing debt, Bowers said it’s imperative that singles begin the practice of saving.

A recent Corporation for Enterprise Development report shows that one-third of Houstonians do not have a savings account. This can be especially damaging for singles with children, who must also consider life insurance coverage and other financial decisions that would impact their kids.

Bowers said plans focused on retirement and other investments, healthcare coverage and homeownership should be among other chief concerns for singles. Owning a home might not be ideal, especially for singles.

“If you don’t want to deal with the maintenance of a home…or if you’re going to move within six years or change careers, you can build wealth through investing,” said Marshall.

Families

One of the first strategies Marshall recommends for families is the adoption of a financial vision.

“You have to agree where you’re going and not be afraid to chastise the person who’s getting off track,” he said.

Another initial step, he said, involves taking stock of where you are as a family financially.

“Assess your situation, do you have cash reserves? Are you spending too much money? Put it down on paper.”

Then, if necessary, Marshall advised husband and wife teams pay down debt and build cash reserves simultaneously. He cited

lack of emergency savings as one of the key Statistics show that the average Ameri from financial ruin, due to inadequate liquid “These things are not fun, they’re not s Marshall said about saving and reducing de When it comes to shoring up, Bowers suggest saving a minimum of three months maximum of six.

After what Marshall considers the foun building plan is laid, he advocates tithing 1 percent in 401K retirement funds and stock Marshall also is a big proponent of fam pooling their resources to form financial sto can borrow. He’s also adamant about famili having adequate insurance so they’re able t And it’s never too early for families to said, noting that even a single share of stock like oneshare.com can set them on a positiv “They can own Nike and they can own said.

“Start educating the kids as early as yo

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ey predictors of financial success. ican household is one crisis away d savings. sexy, but they have to be done.” ebt. “You have to build up.” and other financial experts s of living expenses and a

ndation for a family wealth 10 percent of income, investing 40 ks, then living off 50 percent. milies and extended relatives ockpiles from which contributors ies tackling estate planning and to leave financial legacies. o teach children about money, he ck purchased for a child from sites ve path to wealth. n a piece of Disney,” Marshall

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Seniors

Ideally, by the time individuals and couples reach retirement, their financial houses should be steady.

But as Bowers noted, this isn’t always the case.

“A lot of the responsibility for saving and investing for retirement has been pushed on the individual, so there’s a lot of concern for moderate and low-income individuals,” he said.

For those who are prepared, minimizing the risk of inflation against their retirement funds is critically important, Marshall said.

Another biggie is health insurance and long-term care coverage.

He advises that seniors know their options and seek discounts through organizations like the American Association for Retired Persons (AARP), even their alma maters, sororities and fraternities – noting that today’s average cost of residing in a nursing home is $5,000 a month.

Estate planning should also be among the list of financial strategies seniors consider.

Marshall explained that, “Simple wills deal with who gets your stuff and living wills deal with ‘Do you want them to resuscitate or not?’ ” Establishing a durable power of attorney (someone to make decisions on your behalf, if needed), as well as a medical directive also important, according to Marshall.

One of the most common pitfalls Marshall sees with financial planning for seniors is how they handle life insurance beneficiaries.

He says too often someone will leave the lump sum to a single person, and then expect that individual to distribute the proceeds to multiple people.

To avoid confusion and ill intentions, Marshall suggests splitting the beneficiaries on the policy itself.

“Make sure it’s going where you want it to go,” he said.

Seniors also should stay abreast of financial scams designed to siphon money from them, Bowers added. If ever in doubt, he

he Houston area for over 80 years

recommends checking it out with the Better Business Bureau.

Marshall said a major benefit of proper estate and financial planning for seniors is the assurance that things are left as they intended.

“It’s about making sure when it’s all said and done and you go on to glory, you have the good goodbye.”

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FINANCIAL

DEFENDER | APRIL 17 | 2014

Knowledge is

key to success

F

By BB&T

inancial education is important for all aspects of your life, whether personal or business.

At BB&T, we always strive to share our knowledge and expertise to provide our clients and communities with customized resources.

This is especially true for the small business owner who has the task of managing both personal and business financial needs simultaneously.

Strong community partners are key to BB&T’s outreach efforts and longterm economic growth throughout the Greater Houston area. BB&T is deeply engaged in the Houston community, where we nurture owner-managed businesses through the support of organizations such as the Greater Houston Black Chamber of Commerce and the Houston Minority Supplier Development Council (HMSDC).

BB&T is also a preferred lender with the SBA, providing SBA Express Loans, SBA 7(a) loans and 504 loans.

Joseph Sykes, a commercial banker with our north Houston team, serves as BB&T’s liaison to HMSDC and sits on its corporate Supplier Diversity Advisory Committee. HMSDC is an important organization that links minority businesses with major corporations that may wish to purchase goods and services from these minority business enterprises (MBEs).

“BB&T believes business is a two-way street,” Sykes said. “Through our partnership with organizations like HMSDC, we actively seek opportunities to purchase goods and services in the communities where we do business.

“BB&T also provides needed capital, financial services and a high level of personalized service to qualified MBEs. And it is this superior service that has made BB&T a strong bank for 142 years.”

A great bank realizes that banking is not an abstract concept. Rather, it is about helping the people. That is why we strive to provide clients with key information about areas of concern, as well as to develop comprehensive strategies that move the client forward.

Kai Jones, a business services officer with BB&T’s West Houston team, makes this part of his personal value promise to clients. ”I want a business owner to understand not only what the bank is looking for when reviewing loan applications, but also what those numbers mean to the business’ long-term viability,” Jones said.

“Touching base with the business owner on a quarterly basis allows for consistent re-evaluation of

the business’ performance. This approach opens up valuable dialogue between the business owner and bank. BB&T associates serve as a trusted advisors who really want to build relationships and help businesses succeed and grow.”

So, whether you are just getting started in your business, looking to expand, or thinking about your business’ succession plan, BB&T has associates who are deeply engaged in the Houston market and are ready to be a part of expanding your financial knowledge and growth opportunities.

Finally, at some point, most businesses will require external financing for growth and working capital. As a relationship bank, BB&T will need to fully understand your current business and your future plans. Items that we focus on include the Five Cs: Capacity to repay the loan based upon historical financial performance and future projections.

Capital that you yourself have invested in your business i.e. your “skin in the game.”

Collateral that you can pledge to provide additional security for the loan examples-real estate, marketable securities, CDs, strong accounts receivable.

Conditions that may impact the future success of your business such as demand for your product and the proposed use of the funds requested.

Character, including your background, industry experience and how you have handled credit in the past.

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Moving your business in the right direction.

You know where you’d like your business to go. But you may not know the next steps to take. BB&T is here to support businesses of all sizes by sharing the financial knowledge we’ve gained over more than 140 years. BB&T’s flexible options are tailored to your needs, your goals and your vision. So you have what you need to move your business forward. Let’s get started today. BBT.com

Joseph Sykes 713-344-2270 Joseph.Sykes@BBandT.com Kai Jones 281-201-3187 Kai.Jones@BBandT.com

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I N V E S T M E N T S

Member FDIC. Only deposit products are FDIC insured. © 2014, Branch Banking and Trust Company. All rights reserved.

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Financial security begins with

fiscal fitness

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By CAPTITAL ONE BANK

pril is National Financial Literacy Month, so now is a perfect time for people of all ages to increase their money management skills and make sure they are on the path to a life of fiscal responsibility and economic reliance.

“Maintaining your financial health is a lot like staying in good physical condition – both require healthy habits,” says Laurie Vignaud, senior vice president, Community Development Banking, for Capital One Bank. “Your body requires a balanced combination of nutrition and exercise to stay healthy.

Likewise, good fiscal fitness requires a balance of smart budgeting, spending and savings habits.”

So it’s wise to get – and stay – fiscally fit, and here are some tips from Capital One Bank to achieve that: Create a realistic budget, and stick to it. You can start by creating a realistic budget that outlines all of your monthly expenses and income. Looking at your budget will help you map how much you can save and have available to spend. Don’t forget to consider a reserve fund for unexpected expenses, like car repairs.

Borrow only what you can afford to repay.

A general rule of thumb is to spend no more than one-third of your income on debt. That includes mortgages, credit cards, and consumer loans – for example, car loans, student loans, and lines of credit. Always track your spending to make sure that you’re staying within your monthly budget.

Pay bills on time and carry debt responsibly.

It’s very important to pay your bills on time every month. Never skip payments, and show lenders that you are responsible and trustworthy. A large part of your credit score depends on timely payments. If you have a credit card, be responsible when carrying a balance.

Check your credit report at least once a year.

Checking your credit report regularly will help you catch and correct potentially costly errors such as accounts you don’t recognize, loans that have been paid off but still show up as “open,” and incorrect personal information.

Laurie Vignaud

Some basic strategies can also help businesses get off the ground and achieve success. Here are a few: • Learn how to keep the books, write contracts, get a business license and pay the bills.

• Think about your target audience or customer base and do some research on your competition.

• Write a good business plan – one that will include an analysis of the market, information about

how the business will be run, a marketing and sales strategy, and a forecast of income and costs.

• Determine the legal structure for your business.

• Establish your creditworthiness.

• Determine what kind of financing you need.

And before you need to borrow money, choose a bank that will be able to offer guidance and expert advice, as well as the kinds of loan services you may need now or in the future.

Many programs and organizations are available to provide consumers, families and businesses with information and tools they need to make smart financial choices.

For example, Capital One Bank’s “Getting Down to Business” program is an innovative technical-assistance training course for small businesses, including those serving low- and moderate-income neighborhoods.

The program offers workshops that address the core needs of small businesses, including credit, budgeting, marketing, business plans, financing, accounting best practices, and much more.

Capital One Bank also sponsors the “Debt Boot Camp” for Houstonians, a first-of-its-kind program designed to walk participants through the process of becoming debt free and financially sound.

Both programs are free, and participants are selected through an interview process. To learn more about Getting Down to Business, call 713-435-5317, and for more information about Debt Boot Camp, call 713-726-2519.

And to learn more about money basics, savings, credit and other financial education programs and topics, visit capitalone.com/financialeducation.

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Capital OneÂŽ works every day to give back to the communities where we live and work. Through programs that support financial literacy, education and affordable housing, we provide people the tools they need to succeed.

capitalone.com/investingforgood Š2014 Capital One. All rights reserved.

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How to make

homeownership a reality

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By CADENCE BANK

wning your own home is the ultimate American dream, yet only about 65 percent of Americans are homeowners, according to the U.S. Census Bureau. There are steps you can follow to help make the home buying process understandable and achievable.

First, determine if you are ready to buy a house. Being ready requires that you have a steady source of income and that you have maintained that income for at least the last two to three years.

You also need a credit history, which is created by borrowing money, such as through credit cards.

It also is important to calculate your income versus expenses to ensure you will be able to make the mortgage payment every month, plus the additional costs associated with taxes, insurance, maintenance and repairs. The monthly mortgage should be no more than 28 percent of your monthly income.

Lastly, ask yourself if you have enough money saved for a down payment and closing costs. A down payment refers to the portion of the home’s purchase price that you pay in cash.

The more money you put down, the less money you will

need to borrow and the less interest you will pay over time.

Local homebuyer assistance programs are available. To learn about these programs, talk to your lender, real estate agent and the City of Houston.

Determine how much mortgage you can afford. With no paperwork or obligation, pre-qualification is a good first step to help you figure out how much you can borrow, but it is only a ballpark figure.

To pre-qualify, a lender will ask you for some standard information over the phone about your employment, income, down payment capabilities and outstanding debts.

You also can do some basic calculations on your own using an online mortgage calculator.

With different mortgage options available, determine which one is best for you. These options include fixed-rate and adjustable-rate mortgages. Your lender can help you explore the benefits − and potential pitfalls − of each mortgage type and determine which works best for you.

Look around for the best price. Use the Internet to check rates, and call different lenders on the same day to compare quotes. Keep in mind that rates change frequently, and make

sure to ask for all of the costs in writing. This includes a Good Faith Estimate, or GFE, which is an itemized list of all the estimated costs and fees related to your loan.

Before you finalize your loan, you will be given the loan terms. Among other things, loan terms let you know the maximum change (increase or decrease) in the loan interest rate − monthly, yearly and over the life of the loan. A lender is required by law to provide you with a GFE and the loan terms.

It’s now time to qualify for a loan, unless you have already been pre-approved. The qualification process requires more in-depth financial records as well as a completed application. After analysis, a lender will advise you on the amount you are able to borrow, down payment required and interest rate. In markets where homes sell quickly, it may be wise to secure preapproval before house hunting.

The final step is the settlement, or closing, where the borrower, seller and any other representatives meet to finalize the sale of the house and any mortgage financing. At least one day before closing, you have the right to review the settlement statement to make sure it is accurate before you sign. It is a good idea to review this statement against the GFE you received.

One word of caution – beware of predatory lending practices that are meant to deceive borrowers. Work only with a reputable lender or community development organization.

For additional useful information on managing personal finances, visit cadencebank.com.

Source: FDIC Money Smart

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It’s time to get moving!

If you are in the market for a new home, Cadence Bank can identify a loan that fits your needs.

• Conforming conventional mortgages • FHA and VA loans • Rural development financing • First Time Home Buyer Programs • Jumbo loans above the Fannie Mae and Freddie Mac loan limits Or, if you already own a home, we can help you refinance your existing mortgage. Call us today to learn more about the mortgage loan options available to you at Cadence Bank.

Debbie Lambert

Mortgage Lending Manager NMLS# 728962 713-552-2053 debbie.lambert@cadencebank.com

Dick Flynn

Mortgage Loan Originator NMLS# 417135 713-334-2267 dick.flynn@cadencebank.com

Daina Pipkin

Mortgage Loan Originator NMLS# 728970 713-201-0653 daina.pipkin@cadencebank.com

Gary Pigg

Mortgage Loan Originator NMLS# 869391 713-552-2051 gary.pigg@cadencebank.com

MORTGAGE All loans are subject to credit approval. Loan terms and availability subject to change. Consult a Cadence Bank Loan Officer for complete details. Cadence Mortgage is a Division of Cadence Bank, N.A.

EQUAL HOUSING

LENDER

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Sometimes community support means leading by example.

We’re inspired by those who stand up to make things better in our communities. Chase celebrates the businesses and individuals who are dedicated to preserving and growing our local neighborhoods. Future viability and success requires a strong, unwavering commitment from us all. And we look forward to being a good neighbor for many years to come.

Visit us in your neighborhood or at chase.com Š 2014 JPMorgan Chase Bank, N.A. Member FDIC

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