Spend wisely–and safely–during the holidays

Park State Bank Steven J. Raj 08-20-2013By Steven Raj

The holidays are right around the corner, and most of us will soon be entering into one of the busiest periods of the year for personal spending.

As we’re spending, we also need to be thinking about budgeting, planning and protecting our finances to ensure that we not only make the most of our funds but that we also avoid overspending and falling prey to fraud and other dangers especially prevalent during the holidays.

Here are a few of my tips as a banker to help you make the most of your holiday spending and also to emerge from the season protected, safe and secure financially.

Set a budget. This is perhaps a banker’s favorite suggestion, but we repeat it for good reason: It works. Your holiday spending will be more effective if you enter the season with a plan—and a limit—for how much you will spend. Before you head into the stores or start shopping online, sit down and rough out a plan for what you are prepared to spend for gifts, meals, decorations and other holiday activities.

One of the benefits of a budget is you always can adjust as you go. But having a general sense from the start of what you are able and willing to spend can help you avoid the biggest regret from the holidays—overspending that causes you to start the New Year in trouble with your savings or credit-card accounts.

Use credit cards wisely. Speaking of credit-card debt, if needed, limited use of credit cards during the holidays is best. Remember that charging your credit cards to the limit could have a negative effect on your credit score. Credit cards can be fine for purchases that you can pay off rather quickly in order to avoid hefty finance charges.

But for much of our holiday spending, we can save ourselves headaches and hassles by paying with cash, checks or debit cards. Buying this way requires that we apply some form of budgeting by using available cash or cash-related purchasing tools. This also prevents us from paying high credit-card interest rates on extremely small purchases such as decorations for the tree or stocking stuffers. Think about how cash, your debit card and your checks can help you buy smarter.

Be on the lookout for fraud. Sadly, the holidays are a time when fraud artists and other criminals are out in force trying to separate us from our money. You can avoid the trauma of falling victim to holiday fraud with a few simple steps.

First, be extra careful with your cash, wallet or purse, credit cards and checkbook as you’re shopping. We’re more distracted during the holidays as we hustle from store to store working on our shopping lists. Pickpockets as well as those who might be tempted by crimes of opportunity, such as a purse or wallet left unattended in a shopping cart or a credit card left in a chip reader, can’t prey on us if we don’t let them. Do your best to be extra careful with your items, including your newly purchased gifts.

Second, use one credit or debit card for online purchases to minimize the danger to your overall finances if that card is somehow compromised. Also, be sure to check your card statements more regularly online at this time to ensure that no strange purchases are appearing.

Third, be wary about attempts to steal your credit card, bank account or other financial information via online solicitations, including those masquerading as holiday charitable offers and email messages claiming to be from banks or credit card companies. Ask extra questions of anyone to whom you are giving important financial information, and know that reputable banks never ask for your secure information this way.

The holidays are a special time for reflection and relaxation with family and friends as we contemplate what truly is meaningful in life. By taking a few basic steps with our finances, we can avoid problems and enjoy this time as we should.

Steven Raj is Vice President of Lending at Park State Bank in Duluth. You can reach him at stevenr@parkstatebank.com or 218-727-8001.

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Park State’s Stessman receives industry honor


park-state-bank-leann-stessman-11-14-2016Leann Stessman, Assistant Vice President and Client Relationship Manager at Park State Bank, has been named to the 2016 Outstanding Women in Banking list compiled by NorthWestern Financial Review.

Stessman is one of only six women across the Midwest in banking chosen for the honor, presented annually by NorthWestern Financial Review, a leading source of community banking news in the Upper Midwest. Based on nominations submitted by readers, NorthWestern annually honors outstanding women bankers who have made significant contributions to their communities and the banking industry.

“I am honored to be recognized as one of the 2016 Outstanding Women in Banking. Not only do I have the privilege of working with a great team, I am fortunate to be part of a fantastic organization that is constantly encouraging and supporting my career growth,” Stessman said. “I look forward to continuing to contribute to Park State Bank’s growth plans through our innovative and client-centric approach.”

Stessman was the bank’s first major hire after new ownership purchased the bank last year. She came to Park State with management and client-relationship experience at banks in Iowa and Minnesota. She holds a Bachelor of Arts Degree in Business Management from the University of Northern Iowa.

“We are proud of Leann’s work at the bank and in the community. Her recognition on the Outstanding Women in Banking list is a well-deserved honor” said David Saber, Chief Executive Officer of Park Financial Group, the holding company for Park State Bank. “Leann exemplifies the extreme high-touch client service the bank offers and is continually finding ways to provide a unique client experience.”

The full 2016 Outstanding Women in Banking report is available at northwesternfinancialreview.com.

Park State Bank is a great Minnesota bank with significant financial strength and the ability to provide a breadth of banking solutions and services. Our client-centric approach to delivering financial solutions defines how we do business. Our quality of service sets us apart from competitors. With locations in Duluth and the Twin Cities, Park State Bank believes in being a good community partner and has been recognized for community involvement.


Rob Karwath | North Coast Communications | 218-343-9418 | rob@northcoastcommunications.com

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Enhancing and using credit is key to financial health

Park State Bank Steven J. Raj 08-20-2013By Steven Raj

Credit remains a mystery—and sometimes a scary subject—for many people.

We know we’re likely to need credit at some point in our lives. Most of us have understood from an early age the importance of building and maintaining good credit. But questions linger about what exactly credit means, how to maintain and how to improve it.

As a banker, credit comes into play in discussions and decisions I make with clients nearly every day. I’d like to demystify the concept as well as provide some tips for how to better understand, better use and better maintain credit.

A good place to start is a clear understanding of what credit is and how it works. A simple definition of credit is your reputation for meeting your financial obligations, including your bills and any loans you have taken out.

Your credit score, determined by one of three large national rating agencies—and available at no cost to you for review—is a number between 300 and 850 that ranks your creditworthiness based on a compilation of your financial history. A good rating, generally considered 700 or higher, can help you obtain credit, or the ability to borrow funds to make purchases. The most common uses of your credit score are to obtain a credit card or to apply for a loan, often to buy a house or a car.

If the words of your parents or grandparents are ringing in your ears, it’s for good reason. Many of us have had the message emphasized to us since youngsters that we would one day need credit and that it was important to ensure we had a good credit score. Our parents and grandparents knew from experience about the daunting experience of seeking credit for one of those big purchases in life.

So how exactly does one go about building and keeping good credit?

First, pay your bills on time. Staying current with utilities, purchases on credit cards and store credit programs is essential to establishing and maintaining good credit. You may not consider your electric bill a form of credit, but it is. The utility company has provided you with service based on the trust that you will pay for what you have used at the end of every month. When you do, you bolster your credit. When you don’t, you damage your credit.

A strong credit score generally requires that you do some buying on credit as well. Those who always pay for their purchases on time but do so entirely with cash don’t leave much of a credit track record compared with those who purchase responsibly using credit cards.

Bankruptcies, foreclosures and other adverse financial judgments can have the worst impact on your credit. By following the basic tenets of credit—using it wisely and only for items you can afford—consumers can avoid these dangerous traps. Once you fall into one, it can take years to climb out.

What can you do to improve your credit score? In addition to using the credit you have and staying current with payments, you can request an increase in your credit limit. Just make sure you have been able to handle the credit limit you already have. Another avenue in credit building are credit counseling courses provided by your local bank or credit agencies.

Young people seeking to establish credit or those who want to improve their credit after experiencing problems also can participate in a credit-building loan program, offered at many local banks. These programs allow you to take out a loan, with proceeds placed in an interest-bearing savings account. You make payments on the loan to the bank. When the loan is paid off, you not only have a pot of money in a savings account but also have established a track record of paying off a loan, building your credit.

Credit is an important part of financial life in America. Our parents and grandparents were right when they told us that we would one day need credit and that it was important to build and maintain good credit. Doing this is our responsibility with how we spend and pay our bills, but your local banker is there to help if you have questions or needs.

Steven Raj is Vice President of Lending at Park State Bank in Duluth. You can reach him at stevenr@parkstatebank.com or 218-727-8001.

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