Monthly Archives: December 2015

To sign or not to sign – Deciding to Co-sign a Loan

co-signing a loan

Co-signing is an act of great responsibility and trust. This formality of dual liability enables those otherwise unable to attain a loan to gain the financial capabilities they seek. When approached to co-sign for someone you may want to consider the following tips, provided by Timberwood Bank.

Look at the relationship you and this person currently have.

Are they trustworthy in the capacity you socialize with them? Have any red flags popped up concerning them and their well-being in the recent past? Co-signing affects not only the principal signer, but also the co-signer, holding both to the terms of the contract. It is a fantastic deed to help another achieve their goals, but ensure that you are protected as well when doing so. As a precaution it is a good idea to speak with the loan officer and request communication if the principal signer does default on a payment. In this instance you are aware of the problem before interest and fees begin to accumulate on any missed installment.

Analyze your current financial stability.

If some unforeseen event occurs and you are left holding the bucket for the remaining amount attached to the loan, will you be able to pay it along with your other regular expenses? Take some time to calculate your own capabilities with this loan if you were the sole signer for the account. If the funds don’t work into your budget, or cut the budget too tight, you may consider reducing the loan amount, or postponing the timeline for loan signing. It may be possible to speak with a loan officer to negotiate and see if the co-signer may be responsible for the principal amount only, no interest. Never hurts to ask!

Communicate with both the bank and your fellow co-signer.

Throughout the loan payments your credit and financial reputation will be tied to this agreement. It is much better to help pay a payment or two than have the loan default. By keeping consistent communications with the other co-signer and their bank you can have update on their own financial state, aiding if needed. Since this is a two person liability ensure you reach out to the co-signer often, if they decide this wasn’t for them, you may be left paying the loan yourself.

 

Co-singing loans opens many doors for new graduates, credit builders, and other friends and family that need assistance. With a good credit score and financial history you could be a great fit to be a potential co-signer.

Thoughtful Last-Minute Gifts for the Holidays

holiday gifts

The clock is ticking, the budget is dwindling, your energy is fading… what do you do about those last couple of names on your gift list?

Instead of grabbing the first thing you see on the shelves, our team at Timberwood Bank has assembled a couple of last-minute gift options which are both personal and wallet friendly.

  1. Tap the App store: If your gift recipient is app-happy, gift them a few new apps from the Apple store. Sent directly from your personal device, choose the “Gift This App” option to deliver it to another’s iPad, iPhone, or iPod in a matter of moments.
  2. Compile a memory bucket: For $5-$10, you can stuff a creative container (think lanterns, shower caddies, etc.) with snacks and trinkets that commemorate your relationship. Dollar stores, bargain bins, and thrift stores are perfect for padding this gift, as the goal is quantity and not quality of materials (although the memories they represent are top notch!).
  3. Personalize a mug: Most dollar stores carry mugs that can easily be customized with the help of a Sharpie. Draw on a favorite quote, a lesser-known nickname, or an inside joke they wouldn’t be able to find anywhere online. Stick it in the oven to bake for 15 minutes at 400 degrees to seal it on. Bonus points if you stuff the mug with packets of their favorite hot drink!
  4. Whet Their Appetite for a Dinner Date: Rather than a gift card to a restaurant, gift a symbolic item promising they can redeem it for the real thing with you later. Do they love barbecue joints? Wrap up a bottle of their favorite sauce! They’ll love the excitement of a two-part present.
  5. Where you met: For friends and significant others, commemorate the first time you met with an inexpensive memento of that location. If it’s a coffee thermos from the café, or a homemade pendant of the city where your paths collided, they’ll remember the launch to your relationship every time they use it.

You don’t need to break the bank to make your gifts matter. For an extra hand allocating your cash wisely, give our personal bankers at Timberwood Bank a call!

Give to others and yourself with tax deductions this season!

donations and taxes

During the season of giving, Americans dig into their pockets to give back to their favorite charities. You can give and receive this holiday season with tax deductions on charitable donations, minimizing taxable income and lowering the total amount you owe come April 15. Check out charitable giving FAQs from Timberwood Bank to help you make the most of your generosity.

Where does my gift need to go to make it tax deductible?

Score a deduction by itemizing and filing a 1040 form when you donate to a qualified organization. Non-profit institutions like religious groups, public government causes, nonprofit schools and hospitals, public parks and recreation areas, and war veterans’ groups fall under the qualified category, whereas for-profit entities, individuals, or political candidates for public office, don’t make the cut.

What’s with itemizing?

There are two types of deductions: standard and itemized. Standard is a fixed amount that reduces the income you’re taxed based on your filing status and age. Itemized lets you list your deductions on a schedule, which includes filings like property taxes and charitable donations. If you claim standard instead of itemized on gifts, you may not receive the deduction you deserve.

How much can I deduct from charitable donations?

If your cash benefits a public organization, deduct up to 50 percent from that year’s Adjusted Gross Income (AGI). That means that a $25,000 donation from your $40,000 AGI will only let you claim $20,000 on your charitable gift in the year that you give it. You can, however, roll over that extra $5,000 up to five years after donating. For contributions to private donations like the Bill & Melinda Gates Foundations, use the same rules but swap 50 percent with 30.

I donated stuff, not cash. Does that count?

Yep! Household goods (clothing, furniture, certain appliances, etc.) and other personal property can be claimed based on fair market value. However, it must be in good or better shape that when it was first purchased for the IRS to count it as a deduction. Regardless of the item, keep track of receipts from your donated items, which is especially required for donations of more than $250.

You’ll want to consult your Tax Advisor if you have any questions about how your charitable giving might play out on your tax forms.

The 5 Most Important Elements of Savings Plans

savings plan

Hearing the call to start a savings plan? Answer it! But first – do you know what’s pushing you to do it, how to get there, and what obstacles could deter your path to financial success? Timberwood Bank breaks down the five keys to keeping you on track as you save.  

#1: How You Think Affects What You Save

Say you’re aiming to save $10,000 for your child’s college tuition. That’s no chump change. Savings plans often fail because they seem too daunting of a task. The key? View it in smaller, manageable chunks and not one large lump sum.

#2: It Takes Time

It’s an unavoidable truth. Unless you land a bonus or secure funds elsewhere, recurring bills won’t allow you to squirrel away $1,000 all at once. Bit by bit, $25, $30 or $50 at a time is what makes it possible. Saving is about delayed gratification. Save now to savor the gain later.

#3: Consistency is Crucial

Saving money thrives on consistency. It can be as easy as automatically transferring a set amount from your checking account to your savings account every week. However you go about saving money, try to keep it as simple and routine as possible.

#4: You Need to Be Real with Yourself

Living a responsible life and saving what you can = good. Starving yourself and living desperately = bad. Be realistic about your saving, both in what your target is and how you’re going to get there. Food, housing and health take up a serious chunk of your income. Set an attainable amount per month to achieve in small increments.

#5: Cutting Loose Can Save You Big

All savings and no play makes your budget a pain to follow. Depriving yourself of any little purchases here and there makes you more at risk to snap and drop $200 on an impulse buy. Budgeting in a little wiggle room makes it easier to spend responsibly and keeps you from feeling weighted down your obligation. Just remember to keep track of your small expenses; they add up fast.

No matter how much you’re aiming to save, Timberwood Bank is ready to help. Contact one of our personal bankers to start your journey today!