Whether you plan to plant a tree in honor of Arbor Day or not, we thought it might be useful to remind you of some easy ways you can help save trees and reduce the amount of paper clutter in all of our lives.

Here a few simple things you can do to save a tree:

Use Online Banking

Online banking is a great paperless solution to managing your bank accounts – all you need is a computer with internet access (such the one you’re using right now to read this article).

Pay Bills Using Electronic Bill Payments

Once enrolled in online banking, you can initiate payments using the bill payment service.  Using an electronic bill payment service is simple, and it reduces your need to order checks, not to mention the envelopes and stamps you save.

Transfer Money between Banks Using External Account Transfers

Using external account transfers, also known as account to account transfers, you can move money electronically between accounts at various financial institutions.

Sign Up for eStatements

eStatements are delivered electronically to your online banking mailbox.  Not only do eStatements save trees, they also save you the time and trouble of filing your paper statements.  With eStatements, 18 months of statements are automatically saved electronically for retention purposes, so you don’t have to worry about keeping track of all your old statements.

Use Mobile Banking

With Mobile Banking you can see your account balances and transfer money between accounts on the go.  There’s no need to haul around a laptop, simply use your internet enabled phone to quickly access your bank.

In honor of the great White Oak (The official Maryland State Tree…but you knew that, right?), be sure to take advantage of ways to manage your finances without using unnecessary paper.

Gas prices are on the rise yet again, though you probably don’t need us to tell you that because you probably already felt the pain the last time you were at the pump.  Since there doesn’t seem to be any end in sight and buying a new electric car might not be in the picture, we thought we would share some tips to help you conserve gas and save a little extra money.

♦ Plan trips.  It might seem simple, but by combining errands you can save wasted trips.  Similarly, traveling at less congested times will help limit the amount of gas wasted while sitting in traffic.

♦ Don’t speed.  While this is probably a good overall tip, traveling in excess of 55 miles per hour significantly increases the average car’s gas consumption.

♦ Don’t accelerate too quickly.  Agreed, it’s fun to be the fastest car off the line when the light turns green, but the quicker you accelerate, the quicker your car consumes gas.  Not to mention this might also be dangerous behavior which the police tend to frown upon.

♦ Use cruise control.  Just like accelerating too quickly uses gas at a quicker rate, so does accelerating frequently.  If you can keep a constant speed, you’ll use less gas once the car is in motion.

♦ Remove excess weight.  It’s estimated that an additional 100 pounds decreases your fuel efficiency by 2%.  So, if you can’t ditch your passengers, at least be sure you don’t have excess baggage that you’re toting around.

♦ Have proper tire pressure.  Underinflated tires cause your car to burn more gas.  Be sure your tires are inflated to the recommended pressure.

♦ Change your oil.  A well-oiled machine will run efficiently – it really is that simple.  Be sure all general maintenance on your car is up to date.

♦ Wait to refill.  It may seem counterintuitive as prices keep going up, but gas is heavy, and the extra weight decreases your fuel efficiency – see number 5.

♦ Close your windows.  There’s no better way to enjoy a beautiful spring day than to have your windows down and music up but the truth of it is that open windows makes it more difficult to propel you car forward, thereby requiring more fuel.

♦ Buy gas when it’s cool outside.  Gas is sold by volume, which is why we pay per gallon.  Gas, however, is most dense when it is cooler, and denser gas will get you a higher combustion rate which means more bang for your buck (pun intended).  For more information on this tip, consult a scientist, but for those looking for a simple gas tip, just go with it and buy gas in the morning or once the sun has set.

So the next time you find yourself doing 70 miles per hour down the highway with your windows down and golf clubs that you haven’t used for weeks in the trunk, remind yourself of these simple ways to make a gallon of gas last a little bit longer.

It’s that time of the year again, and if you haven’t already started working through the process of filing your 2011 taxes, now is the time.  While it likely isn’t the most favorite chore you’ll tackle in 2012, it might be one that pays off.  According to the IRS, the average tax refund this year is about $3,000.  Some might argue that getting a tax refund isn’t the best way to manage your money throughout the year, as you essentially gave the government an interest free loan.  Nonetheless, using your tax refund wisely can greatly benefit your financial position and might even help you get a bigger refund when you file your 2012 taxes.

Resist the urge to spend the money before it hits your bank account.  Most certainly avoid refund anticipation loans unless absolutely necessary to deal with an emergency, as these are expensive and might even leave you owing more money than you get back in your refund.  Consider having the money refunded via direct deposit from the IRS directly into your bank account.  Direct deposit isn’t only a safe way of receiving your money, it is also the quickest way of getting your refund from the IRS.

Once you know how much you can expect to receive in your tax refund, make a plan and consider spending the money in the following three categories to invest in your future.

Emergency Fund

Nobody wants to think that something bad might happen, but it’s always a possibility, and planning for an emergency in advance can help lessen the burden if it happens to occur.  Experts suggest you should have 3-6 months of salary tucked away in an emergency fund.  With this money in savings, you should be able to offset hardships that could come from illness, unemployment, or other unexpected events.  Another way to plan for an emergency is to stock up on nonperishable food items and household supplies that are not only good for natural disasters but can provide a source of stability if an unexpected event, such as job loss, was to occur.  While providing for an emergency isn’t a fun way of spending your tax refund, according to Maslow, by securing fundamental needs we can move on to talking about ways to maximize your full potential.

Invest in Yourself

There isn’t much in life more important than your future, so be sure to spend some money to ensure your future is strong.  Consider going back to school or taking a class that can help you learn new skills or techniques that will help advance your career and earning potential.  Attend a conference relevant to your industry – not only will you be exposed to cutting edge information, you’ll also be exposed to networking with people you may not have otherwise met.  Spend some money to update your professional wardrobe.  We all know first impressions are important, so be sure your professional attire is sharp.  Invest money in a retirement account.  Even if you love your job, the time will come when you want some time for yourself.  By investing in a retirement account, you can look ahead to life after work.

Tax Deductible Activities

Consult your tax advisor on this topic, but there are ways you can spend your tax refund that could potentially reduce your future tax burden.  Tackling home improvement projects like purchasing energy-efficient windows or doors, adding insulation, and installing energy-efficient appliances or solar panels are all good ways to improve your home and potentially lessen you tax burden.   Consider saving for or buying a house, as there are many tax benefits to being a homeowner.  Make a donation to your favorite charitable cause.  Not only will you feel good about making the donation, you’ll being doing good for the community.  Many self-investments that are career oriented might also help reduce your tax burden.  Again, consult a tax advisor to understand the details, but using your refund to improve your house, your retirement, or your community might mean less tax in the future.

While the above activities are all important, it is just as important that you treat yourself too.  Don’t blow it all on a weekend in Vegas, but make a smart plan to further your financial progress and after making smart investment decisions, do something to reward yourself as well.

1st Mariner Bank supporting the 2011 Financial Literacy Summit

Throughout my years working for 1st Mariner Bank and observing credit trends across the country, I’ve learned how little most young adults (and even some older adults) know about managing their finances and what affects poor management might have on their life. Because of this, I’ve spent some time working with local schools to help bring financial literacy into the classroom. There are many great programs that exist to help educate students but we may have a chance to help further this effort by making this part of the curriculum for Maryland students.

I feel strongly that our future and that of our students will be brighter by providing them with financial literacy courses. Through these courses, students will learn about saving, investing in the future, managing budgets, and how to manage credit. This will not only help them personally but will also provide an excellent foundation for our next generation of future leaders.

To find out how you can help, please visit: http://www.marylandtaxes.com/comptroller/initiatives/literacy/.

Let your house work for you.

So, you’ve decided to add an addition, pay tuition expense, or have a cushion for life’s unexpected expenses. As your home is one of your greatest assets, many people decide to borrow against the equity in their home by obtaining a Home Equity Loan or a Home Equity Line of Credit. The tough decision is deciding which product will best suit your situation.

When working through the decision of whether to obtain a Home Equity Loan or a Home Equity Line of Credit, there are 4 categories to consider: Access to Funds, Interest Rates, Monthly Payments, and Potential Tax Savings*. By understanding each feature you’ll be well positioned to decide between a Home Equity Loan or a Home Equity Line of Credit.

Access to Funds

Home Equity Lines of Credit are great when you need to access the funds in various increments or need a revolving credit line to pay expense as they occur. With a credit line, you are free to make advances just like you are with a credit card, up to your credit limit within the terms of the agreement.

With a Home Equity Loan, the full loan amount is disbursed in one lump sum, much like a car loan. This is great when you need a set amount and don’t need reoccurring access to the loan.

Interest Rates

For the most part, interest rates tied to Home Equity Lines of Credit tend to be variable, tied to the Wall Street Journal Prime Rate. With a variable rate loan, you get to take advantage of current market rates as they shift throughout time.

Home Equity Loans tend to be fixed rate loans, where the interest rate established at settlement will be the rate you assume for the duration of the loan.

Monthly Payments

Home Equity Lines of Credit are typically interest only for a portion of the term. This means you have the option to pay interest only each month or make additional principle payments as you see fit.

Home Equity Loans generally bill for principle and interest each month. You’ll never have to guess what your payment will be as it will be fixed for the duration of your term.

Tax Deductibility

I would advise you to discuss this with your tax advisor but given your individual circumstance, the interest paid towards either a Home Equity Loan or Home Equity Line of Credit may be tax deductible at the end of the year. As this applies to both Home Equity Loans and Home Equity Lines of Credit evenly, this shouldn’t be a deciding point in your choice between either product.

In short, if you’re looking for flexibility, a Home Equity Line of Credit might be the best product to suit your needs. If you prefer stability, you may want to narrow your search to a Home Equity Loan.

Click here for more information on our Home Equity Loans and Home Equity Lines of Credit.

*Please consult your tax advisor.

Your credit score impacts every major (and some minor) purchase that you’ll make during your lifetime. In regards to making a purchase that requires financing, (i.e. a house or car) your credit score can dictate the applied interest rate and in some occurrences, can prevent you from being eligible to receive financing at all. How about the impact on your career? Nowadays, many employers run credit checks before hiring.

Do you want to own a car, buy a house, have a career and be an all-around self sufficient individual? Mmm. Not much thought required there, huh? Of course you do!

So what is the best way to tackle this overly-exciting subject matter?

We asked our very own Wade Barnes, Vice President of Consumer Lending, to run through the ins and outs of a credit score with a word that we think will be all too familiar to you – the dreaded GPA.

“Professor” Barnes, meet the world.

The world, meet “Professor” Barnes.

700 – or above- is the score (or grade) that will get you on the honor roll of society. Like GPAs, credit scores are simply a numerical ranking of your credit performance.  The best way to think of a credit score is like a grade in school.  There are many parts to this grade like tests, quizzes, homework, participation, and attendance.  The teacher then weighs each factor in accordance with its importance and determines a final grade or score.  Credit scores are no different and look to the following factors.

Not everything is treated equal – the return of “weighted averages.”

35% of your overall credit score is determined by your Payment History, which is the single most impactful factor of your credit score.  Be sure to make your payments on time every month.  If you’re having issues paying your bills talk to your lender.  Many lenders will work with you to help establish favorable terms for both you and the lender.

Next on the list is outstanding debt, holding a 30% weight.  It is important that you don’t carry high balances on your credit cards.  Carrying balances of less than 35% of your available credit limit is ideal.  Balances using 70% of your credit limit or greater are having a negative impact your score.

Weighing in at 15% is the length of time the accounts have been established.  It is helpful to have accounts with a long history reporting to the credit bureaus established.  For revolving accounts that have been managed well, consider keeping these accounts open so they continue to build history.

At 10% each, inquires and credit diversity are the least impactful but are nonetheless important to consider.  Be sure you aren’t authorizing lenders to pull your credit report needlessly – keep this in mind when you’re checking out at your favorite retail store where they offer a discount for opening a store credit card.  With regards to diversity, be sure your debt instruments are spread amongst various loan products.  An individual who has a car loan, credit cards, and a mortgage will rate better than an individual who simply has multiple credit cards.

Is the test going to be graded on a curve?

Yep. Just like finals, these factors are scored on a curve type system where your performance is compared directly to other individuals.  Scores range from 350 – 850 where anything over 700 is good and anything under 600 needs improvement.

Be Aware

Perhaps the most important tip is to be aware of what’s on your credit report.  With over 290 million reports, mistakes are bound to happen.  You are entitled to receive a free copy of your credit report from each of the reporting bureaus every year.  To obtain your credit report, visit www.annualcreditreport.com , an official site sanctioned by the bureaus to allow you free access to your report.  Put this on your calendar and make it an annual practice.

As always, feel free to reach out with any questions you have about your credit score or any other credit question.

Convenient or expensive??  The FDIC posted an article on convenience checks issued by credit card companies.  While this may be a convenient service for many borrowers, it may come with expensive fees and unseen pitfalls from overdraft fees to fraud if you’re not careful.  Check out the FDIC’s article: http://www.fdic.gov/consumers/consumer/news/cnspr09/blank_check.html

 There has been a lot of discussion this week revolving around the Credit Card reformation act that became effective this week (If you missed the conversation, check out the Credit Legislation post for details).   A result of the proposed legislation was a knee jerk reaction by the credit card companies to raise rates across the board to all of their customers, as future rate hikes will be regulated a bit more aggressively.  Over the past few months, many good customers whose rates have been hiked now feel slighted and want to close their account with their credit card holder.  By all means, if you feel so strongly don’t let me discourage you from acting.  On the flip side, this same legislation has unintentionally made credit harder to come by (and likely more expensive), so you may want to consider this before axing your old account.  On top of this, think through what affects this may have on your credit rating.

I had lunch with a friend a few weeks ago who is an executive at a local business.  He has never been late on his payments, never gone over his credit limit, has excellent credit, a stable job with a solid income but was still a victim of blanket rate increases by his unnamed credit card company.  Out of frustration, he wanted to close this account that has been opened for over 20 years. 

The reality of it is, my friend never carries a balance on their card and hence is never affected by the associated interest rate.  Even if a balance was carried from month to month, I’d check out the competition’s rate before moving a balance as the grass isn’t always greener. 

On to the core issue: If they close their credit card, an account with an excellent history, their credit score will take an immediate hit – especially if they open a new card in its place.  Not only would they close a beneficial account in their credit history, they would also reduce the available credit limit, which could affect the credit usage ratio (the amount of revolving credit outstanding / the total credit limit).  So, there are two factors that could possibly affect your credit score by closing an account with a solid history to keep in mind before jumping ship.  Keep in mind though, with a stable credit rating, even this minor hit won’t affect your overall rating in the long-term and shouldn’t be of great concern but there are consequences to every action that should be considered before making any financial decision. 

For more information on how credit scores are calculated and factors that affect your score, check out the post on maintaining credit ratings during tough timesor feel free to be in touch for more information (wbarnes@1stmarinerbank.com). 

As always, I welcome questions and conversations about situations you may have encountered and how these recent changes have affected you.

First, I apologize for being dormant with posts recently.  As you are probably aware, the credit industry has been going through some fierce revisions, many of which are overdue.  We can debate the pros and cons in another conversation but essentially this works to remove dishonest lenders and/or lending practices and create a template for explaining loan terms in a consumer friendly fashion. 

You may notice some changes from your credit card provider thanks to the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.  Consumers Union has done a nice job explaining the provisions of the act and how they may affect you and your account.  As the legislation is making it tougher to increase credit card rates in the future, many companies are raising rates now and in some cases for no apparent reason. 

Changes to the Real Estate Settlement Act (RESPA) and Regulation Z are set to take place in January.  These new rules work to present the costs involved with obtaining a mortgage in an easy to read document.  The goal is to create a shopping document where you can compare the rate and costs of the loan between lenders.  There are also provisions in place to keep lenders from increasing fees after the initial disclosure (within reasonable measures). 

As there are pros to the new legislation, there are also cons.  I am happy to discuss any questions or concerns you may have.  Feel free to share your thoughts as well.

Congratulations Kendra for winning 1st place in the NFTE City-wide Business Plan Competition!!  Kendra worked hard designing a business, Alice’s Bake and Make. 

This is the second year in a row students from Patterson High School won the city-wide competition!  Well done Kendra and congratulations Patterson for another great year of excellent business plans!