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Money Masters: Local Experts Give Financial Advice

Financial matters can be complex and confusing. The same way you place your trust in the hands of medical professionals instead of turning to Google to find out how to perform a home appendectomy, it’s important to have someone you trust who has knowledge and expertise in money matters in your corner to help guide you to a more financially secure future. We asked several experts from throughout the region for their thoughts on some basic financial questions.

Danielle Robinson

Assistant vice president of corporate philanthropy, Jackson

What is your best advice for planning for retirement?

Start today.

Wherever you are in life’s journey, it is never too early to take action to support your financial future. It’s important to talk openly with kids about money — our financial behaviors and attitudes are formed in childhood, so that’s why the Jackson Charitable Foundation provides free financial education to more than 1.5 million students across the country each year.

As you begin making adult financial choices, talk with someone you trust. Money decisions are incredibly personal, and obtaining help to better align those decisions to your values and goals will be time well spent.

Tim Salisbury

Regional president for mid-Michigan, PNC Bank  

Why should people have more than one bank account? 

Having more than one bank account makes it easier for people to use their accounts for different purposes.

For example, PNC Virtual Wallet is a financial tool that includes a checking account called Spend for everyday purchases; a second checking account called Reserve, which is useful for setting money aside for upcoming expenses; and Growth, a savings account with a competitive rate to save for the future.

Greg Adkins

First vice president and commercial lending officer, Mercantile Bank

How is the credit-worthiness of a business determined?

One of the first things we do when talking with a customer or prospective customer is listen.

Every business is different and getting to know their needs is key to developing a comprehensive banking and lending plan. It’s not a one-size-fits-all approach; it’s more relationship driven. There are, of course, guidelines that most financial institutions focus on when working with a business, and questions regarding cash flow management, collateral and market conditions are sure to be a part of the process.

Mercantile Bank is committed to partnering with businesses and entrepreneurs to empower them to do what they do best, which is run their company. It’s our job to provide them with the tools they need to be successful. It’s that level of service and unique approach to addressing the needs of our customers that sets us apart.

Patricia Barnas

Market president, First National Bank of Michigan

How is a credit score calculated?

Access to capital is a primary ingredient for a successful small business.

For your bank to consider a loan, you would provide copies of the last three years’ federal tax returns for anyone owning 20% or more of the business along with a personal financial statement, three years of the business entity federal returns, and an interim balance sheet and income statement. If your business is a startup, you would need to provide your business plan.

Your personal credit score is an important piece to access capital. Your score is determined by credit history, credit usage, total balances, available credit and the number of times a credit report is pulled. Take steps now to have capital in place when you need it.

Deidre J. Davis

Chief marketing officer, Michigan State University Federal Credit Union

What is your best advice to get out of debt?

Begin by making a list of who and how much you owe. After that, make a payoff plan. The snowball and avalanche methods are both good ways to pay off multiple debts.

Snowball: Look at your list of debts and find the one with the lowest balance. Pay as much as possible above the minimum due on that smallest debt and continue paying the minimum on the other debts. Once you pay off the smallest balance, move to the next debt (now the smallest balance) and keep going until you pay off all your debt

Avalanche: Instead of starting with the smallest balance, pay off the loan with the highest interest rate first, then tackle the loan with the next highest interest rate and so on. With this method, you won’t necessarily get the “quick wins;” but as you pay off debt, you’ll be paying less and less interest.

Nicole Nyboer-Halliwill

Financial adviser, Edward Jones

When should people start thinking about retirement savings and why?

When should you save for retirement? The sooner the better.

The later you start saving for retirement, the more you’ll need to save on a monthly basis. For example, the monthly investment required to get to $1 million by age 65 is $405 per month if you started investing at age 25. This increases dramatically at age 40 to $1,277 per month, and even more so if you start saving at age 50 requiring a monthly savings of $3,214. The longer you wait to save, the more you miss out on the power of compounding.

You can use the power of time by adjusting how long you save. You can use the power of money by controlling how much you save. With the power of return, you manage your investment mix to control your return potential or how much you earn.

Joe Pichla

Commercial Relationship Manager, Dart Bank

What are the benefits of a money market account?

Commercial banks and credit unions are permitted to offer money market accounts to their customers.

While it is not a federally prescribed minimum balance, the normal minimum is $1,000. Terms may vary from institution to institution, and the accounts may only have a total of six transactions per month. These accounts are not intended to be used for regular transactions but as a place to keep excess cash balances.

Money markets include many benefits, including a typically higher interest rate than passbook savings. Also, they carry FDIC (Federal Deposit Insurance Corp.) insurance, making them less risky than publicly traded money market funds.