Teaching Kids About Money: From Birth To College

Even before your baby is born, you’re probably thinking about the financial changes a child will bring. New parents have to revise their household budgets to account for expenses like diapers, clothes, childcare, and more. You may also want to start saving for college now. But don’t forget to include your child in financial habits and literacy. Kids learn behavior from their parents, but they can’t learn anything about money if you don’t teach them and model good habits. In this article, we’ll discuss personal banking for kids and how to develop good habits from birth through college.

Start Early With Savings

The earlier you start saving, the more time your money has to grow. Even little amounts will add up over time. This is due to Compound Interest, which is when you earn interest on your initial deposit as well as the interest you accumulate. You can use this Compound Interest Calculator to show your child how much a deposit to their savings account now will grow over a certain number of years.

Building the savings habit will also help your child learn good money habits, such as delayed gratification. Saving also teaches the concept of financial planning–we are putting money away for a rainy day, for example, or saving for a specific purchase or expense.

To help your new baby or young child get an early start on savings, you could open a custodial account or start a trust fund. Both types of accounts give you control over when your child will have access to the funds. Consult with your tax advisor about the tax implications of a trust or custodial account.

Family around piggy bank

Open a Youth Savings Account

Let your child in on the fun! Kids savings accounts are a type of joint account–both you and your child must be on the account, so take them to the bank with you and let them participate in opening the account. You can also take them to deposit funds and use the coin counter machine. Make banking fun so your child will take an interest and want to continue with saving as they get older.

Our Treehouse Club is a special savings account for kids aged 6-18. It comes with a piggy bank for saving at home, a passbook for recordkeeping, and a prize every five deposits. There are no minimum balance requirements or service fees. Learn more about the perks and benefits of Treehouse Savings.

Learn About College Savings Accounts

In addition to general children’s savings accounts, parents can open a college savings account to prepare for future educational expenses. Even if your child ends up taking a different path, the funds can be used for a sibling’s college education. These educational savings accounts can also be used for K-12 private and religious school costs. A college savings account can also be closed and the funds disbursed, although tax penalties will apply.


Also known as a qualified tuition program (QTP), each state has its own 529 plan to help residents either prepay for college tuition or save for higher educational expenses.


Earnings on your 529 plan accumulate tax free while in your account. Withdrawals for qualified higher education expenses are not taxed. 529 plan funds can also be used to make payments on the beneficiary’s or a sibling’s student loan (limited to $10,000).


If your child doesn’t use all of the balance for educational expenses, and there is no sibling to transfer funds to, you can close the account and use funds for other expenses–subject to a tax penalty and other terms.

Coverdell Education Savings

Contribute up to $2,000 per year and enjoy tax-free withdrawals for qualified educational expenses.

Teen managing bank account

Kids’ Checking Accounts

As your child gets older, they may start working to earn their own money. And they may want to spend some of the money they’ve been learning to save. This is the time to open a checking account for your teenager. Learning how to manage a checking account is an important part of financial literacy and well-being. They can use a debit card, keep track of the money coming in and going out, and reconcile their account to avoid overdrafts. As your teen accumulates some of their own expenses, such as a car or cell phone, they can also learn to budget for monthly income and expenses. Remind them that “saving should always be your biggest expense.”

Jars with coins with little girl behind them

Financial Responsibility

As your child gets closer to adulthood, it becomes more and more important to teach them financial responsibility. As they grow, you can build upon lessons you taught them when they were young.

  • Teach budgeting with an allowance. Kids know how much they will get each week and can decide what to spend and how much to save.
  • Incentivize saving. Show your kids their savings account statement so they can see compound interest in action. Offer a “match,” such as one dollar or a few dollars for their savings deposits.
  • Encourage generosity. Have your kids contribute to a family donation to a local charitable cause. Ask them to use their own money to buy holiday or birthday gifts for a sibling or other relatives.
  • Talk about spending as a series of choices. Instead of saying “we can’t afford that,” you can say “we’re choosing to use our money for ___ instead.”
  • Offer opportunities to earn more. Whether or not you require chores for your child’s regular allowance, you could offer occasional chances to earn extra money for help around the house.
  • Explain how debt works. Your kids may see you using a credit card to pay at a store and think that money is “free” or “grows on trees.” Talk to them about how you pay off your credit card charges each month or, if you don’t, your credit card will charge a high interest rate to carry a balance and that interest compounds, too.

Open a savings account for your child!

Set your child up for future financial success by opening a college savings account. At age six, take your kid(s) to your local F&M Bank branch in the Shenandoah Valley, Virginia, to open a Treehouse Savings Club account. Have questions about youth savings accounts or other aspects of your family’s finances? Give us a call or visit your nearest branch location.


F&M Bank Named “Best of Virginia”


Virginia Living Magazine has released its annual 176-page statewide guide listing the more than 1,500 winners from its January readers’ survey. Nearly half a million votes were cast in 104 categories, covering the best in Food & Drink, Living & Recreation, Services, and Shopping across the Commonwealth’s five regions.

“We are delighted to be among the top three financial institutions named Best of Virginia in the Shenandoah Valley region. Since 1908, our team has been grateful to play a part in the growth of the Shenandoah Valley economy and today remains more committed than ever to the success of our neighbors, the agricultural industry, small business ventures, and the nonprofit sector,” said Holly Thorne, F&M Bank’s director of marketing.

The twelfth annual Best of Virginia issue is available by subscription and at newsstands, including select Barnes & Noble, Kroger, Wegmans, Publix, Harris Teeter, Books-A-Million, and Target stores. Learn more at VirginiaLiving.com. View the digital edition here https://issuu.com/capefear/docs/2023_bov_issuu

Press release content courtesy of Virginia Living Magazine. CONTACT: Vayda Tarleton, Associate Editor, Special Projects, VaydaTarleton@CapeFear.com, 804-343-0778

Understanding Inflation as a Small Business Owner

When it comes to inflation, small businesses are more vulnerable to the challenges of rising prices than larger companies. Not only does it increase your cost of doing business; it may also deter your customers from spending as much as they usually would. It’s important to know that you’re not alone as a small business owner grappling with the effects of inflation. In this article, we’ll share the best inflation strategies for keeping your business running smoothly.

What Is Inflation?

Inflation refers to an overall rise in prices within a certain period of time. As prices increase, individuals’ and businesses’ purchasing power falls. For example, if it costs more to fill up your gas tank or buy a week’s worth of groceries, you have less money to spend on other things.

The federal government tracks inflation through the Consumer Price Index, which tracks prices paid for certain goods and services over time. As of March 2023, prices were 5% higher than the previous year.

The Federal Reserve’s target inflation rate is 2%–enough to keep the economy growing steadily each year without causing the kind of financial pain we’ve seen over the past year or so. That’s why the Fed has been raising interest rates, increasing the cost of borrowing money but also delivering higher interest rates for savers.

The current streak of inflation can be traced back to the beginning of the pandemic, when people stuck at home started buying more stuff than usual with the money they weren’t spending on going out. Demand for consumer goods such as furniture and more grew faster than supply, leading to higher prices. A labor shortage during the pandemic also caused many companies to increase their wages and salaries. Then the Russia-Ukraine war contributed to a spike in energy and wheat prices. With a global supply chain, disruptions in one country or industry have a ripple effect everywhere.

How Does Inflation Affect Small Businesses?

Just as a family’s budget can be squeezed by inflation, small businesses may have to make some changes as well. Unlike larger companies, small businesses may not have as much of a cash cushion either in savings or with their cash flow.

Higher operating costs (for labor, materials, services, utilities, etc.) may cut into whatever cash cushion you do have, forcing you to try and cut costs, raise prices for your goods and services, or both. Or you accept smaller profit margins to avoid passing costs onto your customers.

Inflation also causes uncertainty about the future. When prices change quickly or unpredictably, it’s harder to plan and forecast for the months or year ahead. Luckily, there are steps you can take as a small business owner to lessen any negative impacts of inflation on your business.

Woman doing bills in small business

Budgeting For Inflation as a Small Business Owner

A solid budget provides a roadmap, with room for flexibility, for your business operations.

  • Create and stick to a business budget.
  • Leave room in your budget for monthly adjustments as costs rise and fall.
  • Involve your employees–your budget and company’s success affect you and everyone who works for you.
  • Make employees aware of changes to ensure everyone is working towards the same goal.
  • Employees on the ground may also offer new insights or creative solutions.
  • Overestimate your expenses. It’s better to have leftover funds than to not allocate enough.
  • Don’t plan on running perfectly on budget–there will almost always be an unexpected cost.
  • Understand the ebbs and flows of your market. Not every month will show growth–most businesses will have a “slow” season.

If you’re experiencing a cyclical or temporary cash flow shortage, a commercial line of credit gives you the flexibility to tap working capital when you need it, pay back what you borrowed, and use the credit line again.

Inflation-Proofing Strategies for Small Business Owners

Beyond budgeting, here’s what you can do to “inflation-proof” your business.

  • Consider long-term vendor contracts to lock in pricing. That will help prevent your business costs from rising faster than inflation.
  • Cut down on unnecessary expenses or switch to cheaper options, such as with office supplies.
  • Communicate with your customers about any inflation-related challenges you’re facing and why you need to raise prices accordingly. Your customers will appreciate the honesty and they want to see you succeed.
  • Re-evaluate your vendors. As your business changes, so do your vending needs. There may be a new vendor who can help you cut costs in your market.
  • Invest in automation and technology. This can help reduce your overhead and increase productivity. For example, F&M Bank’s Cash Management services for businesses can help you automate everyday tasks such as depositing checks and more.

Man holding packages looking at laptop

How to Stay Ahead of the Curve

We want to help your small business not just survive but thrive. Inflation isn’t the only curveball that life can throw your business. Here are some ideas for helping you get ahead.

  • Invest in your employees. Losing experienced employees can set a business back, as well as the expenses that come with training a new hire. Focusing on retention will save you money in the long run and help protect you against the costs of recruiting and training during a time of inflation.
  • Put extra money in an interest-bearing savings account. As the Fed raises rates to help fight inflation, let your extra cash work for you. It will take some time to see a gain, but in the long run you can come out ahead. For example, interest rates on Business Certificates of Deposit (CDs) are very competitive.
  • Improve your Accounts Receivable Turnover Ratio. With the availability of ACH and credit card payment solutions, giving customers 30 or 60 days to pay a bill may be unnecessary. Shorter payment terms (such as 20 days), down payment requirements, and upfront payment for new clients with no credit history can result in an improved AR Turnover Ratio. You could use that increased monthly cash flow to reduce your dependency on credit cards. Depending on the increase in cash flow, improving your AR turnover may be enough to support additional staff who can drive more business.
  • Build your inventory of supplies. Before price increases and shortages hit, have a stable of necessary supplies stored safely and out of the way to be prepared. This is especially helpful when preparing for a busy season such as the holidays.

F&M Bank can help your Virginia small business succeed!

F&M Bank has helped generations of small businesses in the Shenandoah Valley and we can help you, too. Check out testimonials from our business customers to see how we meet the banking needs of local businesses and help them grow. Contact us to discuss your specific pain points around small business inflation and find the right solutions to get back on track.

Spring Clean Your Finances

Spring is a natural time to start planning for the upcoming year, whether you plan to buy a home, return to school, or simply map out your summer vacation. Just like you clean your house and switch out your wardrobe, now is the perfect time to clean up your finances, help you prepare for tax season, and get things in order for the year ahead.

Conducting your own financial spring clean doesn’t have to be hard or overwhelming, and each time you do it the easier it will get. If it’s been a while, begin small, setting aside a half hour to conduct an easy check, gradually moving onto larger tasks as you gain momentum. Let’s start with a simple task—reviewing your credit score.

Checking credit score

Review Your Credit Score

At the minimum, you should check in with your official credit record once a year. This is especially important if you plan on applying for a loan in the near future, as your credit score is one of the most important deciding factors for both approval and determining your interest rate.

Why check your score?

You may pay your bills on time every month and be responsible with your use of credit, but it’s vital for your financial health to both be familiar with your score and understand the factors that go into your particular score—taking corrective actions to improve it when necessary. Even if you’ve never missed a payment, there are other things that can lower your score, from maxing out or carrying large balances on your credit cards, opening too many accounts, or even being the victim of identity theft. Knowing your score and its breakdown can help you address any issues that are dragging it down.

How to check?

You can check your credit report from each of the three major reporting agencies (Experian, Transunion, and Equifax) for free, once a year, at AnnualCreditReport.com. Your report will show your full payment and account history, pointing out aspects of your credit that could be improved.

Official credit scores from the credit reporting agencies, however, are not free. You can buy access to your score through any of the reporting agencies, at any time, but there are other options. Every time you apply for a loan or other form of credit, the financial institution will disclose your credit score to you. Additionally, many credit cards will offer you free credit scores and monitoring—sometimes your score will appear right on your monthly statement. Lastly, it’s possible to sign up for free credit monitoring and get an unofficial (but still helpful) score, with an analysis. Just be sure to only sign up with reputable companies and watch out for hidden fees—they all have them.

What to check?

When reviewing your credit history, be sure that all the following are correct:

  • Payment history
  • Listed accounts
  • Accounts listed as closed (or open)
  • Credit limits and balances
  • Public records
  • Inquiries

What to do if something looks incorrect?

If there’s something wrong, you’ll need to dispute the error with the credit bureau and also report any inaccuracies to the company who reported the information (credit card company, bank, hospital, utility company, etc.). For more information on how to fix errors with your credit report, check out this excellent resource from the Consumer Financial Protection Bureau: Is it possible to remove accurate, negative information from my credit report?

Holding credit card and phone looking at subscriptions

Revisit Recurring Payments

Recurring payments can make up a large portion of your monthly bills and can be an easy way to free up a decent chunk of your monthly budget.

Why should you check recurring payments?

Although each individual charge may be small, these payments can add up! In fact, according to a recent study the average consumer spends $273 per month on subscription services, up from $237 in 2018.

How to check?

Online and mobile banking can make recurring payments easy to check and keep track of. Log into all your bank and credit card accounts, looking for fees that appear each month in the same (or similar) dollar amount. If a line item looks familiar, conduct a web search to find out what it is.

What to cut?

To reduce spending on these recurring charges, considering canceling things you don’t regularly use or need, including:

  • Magazine subscriptions
  • Streaming subscriptions
  • Memberships (gym, club, etc.)
  • Mobile apps and games
  • Other services

Additionally, if you are looking to balance your budget, consider other regular, discretionary expenses—including holiday shopping or spring break vacations—that can be reduced. Set a budget and save for them in a designated account like a Christmas Club Savings Account, instead.

Older parents with younger couple

Assess Your Beneficiaries

When was the last time you checked who is designated as a beneficiary on your financial accounts—or that there was one listed at all? Because we never know what to expect from life, it’s important to have your financial accounts in order, should an unforeseen circumstance or event occur.

Why should you revisit your beneficiaries?

You may have experienced a major life change in the past year, like a divorce or a death in the family—or perhaps simply a minor one. Who you want to gain the benefit from your financial holdings—account by account—maybe change from year to year. And not having a beneficiary on some accounts, like IRAs, can cause unnecessary complications and delays during estate settlement.

What accounts and documents to check?

Nearly all financial accounts allow you to list a beneficiary. Look into your:

  • Bank deposit accounts: checking, savings, money market accounts, and CDs
  • Custodial accounts: accounts you hold for your dependents, or accounts where another person is or was the custodian for you
  • Retirement accounts – 401(k)s, IRAs, Annuities

Additionally, take the time to review your estate planning, including your will and any trusts you have. For more information on the many types of account ownership and designations, from estate accounts to power of attorney, check out our account ownership post.

Jar of coins labeled retirement next to clock

Audit Retirement Accounts

If you have changed jobs more than once, chances are you have multiple retirement accounts—maybe even some that you’ve forgotten all about. Take the time to round up all your retirement investments to ensure that you have the most cohesive and easy-to-manage plan in place, that also has the best financial payoff.

Why check in with your retirement accounts?

If you have multiple 401(k)s or other plans, it can be easy to lose track of them, possibly losing access to a valuable asset. Additionally, checking in with the specific mixture of investments for each plan—working with a financial advisor—can help you assess which accounts are doing the best, and which ones could use an adjustment. And keep in mind that work-sponsored HSAs belong to you (even after you leave a job), and can be valuable retirement tools for medical expenses, as well.

What to do?

Find account information for all retirement accounts, including those with previous employers. This could include 401(k)s, 403(b)s, HSAs, IRAs, and Roth 401(k)s. Most accounts will have some form of online account management. If you don’t currently have access, take steps to gain it again (by reaching out to your employer or investment company). Here are a few things you can do to manage and simplify your retirement accounts:

  • Reduce redundancies: Roll over 401(k)s and combine other similar accounts into one account
  • Check address, contact information, and beneficiaries
  • Increase your automatic contributions from your paycheck
  • Review investments and make changes to poorly-performing assets
  • Make sure recurring investments or dividend distributions are being reinvested—uninvested accounts cannot grow! 
  • For more investment tips, check out our post: Six Keys to More Successful Investing

What if I don’t have any retirement accounts?

The earlier you start saving for retirement, the better. If you don’t have a retirement plan, start one today. If your employer offers retirement benefits, reach out to them to enroll. If not, consider an individual retirement account—a Roth or Traditional IRA. These accounts allow for yearly contributions that must be completed by tax day. With a Traditional IRA, your contribution can have immediate tax benefits, too! Speak to a wealth manager to learn more about your options and create a plan that works for you.

How F&M Can Help

Spring can be a busy time of year, from tax prep to summer planning. But creating a yearly ritual of checking in with your financial accounts and revisiting your long-term plans can help you avoid pitfalls, stay organized, and increase your chances of success.

At F&M Bank, there are many ways we can help. Make an appointment and stop by one of our branch locations throughout the Shenandoah Valley to review your accounts with us, ask questions, and make any necessary changes. And while you’re there, consider meeting with an F&M financial advisor to understand the many retirement and investment options available to you to help you meet your financial goals. Reach out to us today to freshen up your finances and prepare for a new season of growth!


F&M Bank Corp. Reports Fourth Quarter and Year-End 2022 Results and Fourth Quarter Dividend

Company Release – 1/30/2023 3:55 PM ET Strong fourth quarter loan growth sets the stage for solid results in 2023. See associated, unaudited financials for additional information. TIMBERVILLE, VA / ACCESSWIRE / January 30, 2023 / F&M Bank Corp. (the “Company), (OTCQX:FMBM), the parent company of F&M Bank (the “Bank”) today reported fourth quarter and […]

Buy Now Pay Later vs. Layaway vs. Credit Card

There are more ways to pay for your purchases than ever before, and with the holidays approaching, you may be wondering which method of payment is the best for you to use for your seasonal shopping. New options on the horizon that allow you to pay out of time, like buy now, pay later, and old favorites like layaway and credit cards, are a few of the most popular options out there, often utilized to cover purchases that you can’t or don’t want to pay for upfront.

But it can be hard to determine which options are right for you, and what might work for one purchase might not make sense for another. In this post we’ll dive into these common payment choices, discuss their basic features, as well as pros and cons of each one. Making the right choice, especially during the busiest shopping season of the year, can help you save money over the holidays, and even into the new year. Keep reading to learn more.

Buy Now, Pay Later (BNPL)


Buy Now Pay Later payments have grown in popularity and most major retailers offer this option.


Buy now, pay later purchase options can be enticing at checkout—instead of paying the full price up front, you only pay a fraction of the price, and then make smaller payments to cover the rest. This can make you feel like you are saving money, or take the bite out of larger, more expensive purchases. But you are still paying the full amount, and the lower payments can lead to irresponsible spending if you’re not careful. However, these plans can be useful in certain situations, for instance for large purchases you need to make, like a new appliance, that you might not have the funds for immediately. Let’s take a closer look at buy now, pay later plans.

How They Work

With buy now, pay later you set up an installment plan for paying off your purchase.  You will likely be required to pay some money upfront, but pay off the balance over time in a series of smaller payments. Some BNPL systems have a fixed schedule of four payments, while others will allow you to choose how many installments you make. This type of payment system has grown in popularity since the pandemic, and now most major retailers, including Amazon, offer these plans as a payment option. Popular and reputable platforms include Afterpay, Affirm, and Klarna.


There are many reasons and benefits for choosing BNPL, which is why this type of financing plan is growing in popularity. Some pros include:

  • No Interest: Many retailers and programs don’t charge any interest if you make all your payments on time.
  • No Credit: You don’t need to have established credit to qualify and no hard credit checks will be run when you apply.
  • Availability: Most major retailers offer BNPL as an option during the checkout process, including many online retailers.
  • Affordability: With BNPL, you can make larger purchases more affordable by breaking the payment into more digestible chunks.
  • Credit without a credit card: BNPL can help fit purchases into your budget without requiring use of credit cards, which usually have much higher interest rates.


Although BNPL plans have a lot of perks, they’re not right in all situations. Here are some downsides:


  • Possible Interest or Fees: Some retailers do charge interest, a fee, or both—especially if you miss a payment.
  • Might not build your credit: Even if you make all your payments on time, some retailers don’t report your activity to the credit reporting agencies, which means your credit won’t be improved or established with BNPL.
  • Could harm your credit: While some payment plans are automatic, not all are. If you miss a payment or a payment fails to go through, it could harm your credit.
  • Could lead to overspending: Because you don’t have to pay a balance upfront, it can be easy to overspend. Even if the payments are smaller and distributed over time, if you rack up a lot of these plans, you could end up in debt.
  • Expensive late fees: In addition to potentially harming your credit, if you miss a payment, you could be hit with expensive late fees.



A downfall of using layaway as a payment method is that some stores require a deposit that could be larger than you can afford.


Layaway is an old favorite—it’s been around since the Great Depression, and is a useful way to put money aside for an item, little by little, when you know you want it but you can’t afford the whole cost up front. In this way, layaway is essentially the inverse of By Now, Pay Later. And if you don’t need an item right away, it’s a great way to work towards larger purchases while creating a habit of savings in the process.

How It Works

Today, layaway is available in stores, as well as at many online retailers. There are different options for layaway, from making payments in person at stores, to setting up automatic payment plans. Though many brick-and-mortar stores have discontinued their layaway payment options, there are still a few major retailers who offer it, including Burlington, K-Mart, and Sears. With in-store layaway, you select the item that you would like to purchase, taking it to customer service to set up a layaway plan. You may need to put down a deposit and pay a fee to get started. With major retailers, you can often make payments online or in-store, but need to make them on a regular schedule, and by a certain date. Online layaway is similar, except that the item will ship to you after you have made all your payments.


While layaway has decreased in popularity over the years, it serves a valuable role in certain situations. These are some of the best aspects of using layaway for your purchases:

Smaller payments: Just like BNPL, the smaller payments can make it easier to fit the cost into your weekly or monthly budget.

No interest: Layaway isn’t a loan, so you won’t be charged interest in the process.

Easy to qualify for: There is no credit or income requirement, you simply need to put a percentage of the money down, and in some cases pay a small fee.

Holds the item for you: If you are worried an item may sell out, putting it on layaway can hold it till you have the funds to cover it. However, not every item in a store may be available for layaway.

Avoids overspending: Layaway helps you make larger purchases, but in a way that ensures that you can actually afford them.


On the other hand, layaway isn’t for everyone. It’s usually not free, and its requirements can feel onerous. Here are some of the specific cons of layaway:

Fees: Many stores charge fees for starting a layaway plan, as well as fees for not completing payments by a certain date.

Strict repayment terms: Many layaway plans have strict repayment terms that require you to make regular payments. If you don’t have an automatic payment plan and are making in-store payments, this can be a burden.

Long wait: You won’t be able to complete the purchase and take home the item that day, instead you will need to wait until it is completely paid for. If you need something right away, layaway is probably not the best option for you.

Annual fees: Many cards, especially those that offer the best rewards, charge an annual fee.

Credit Cards


Using a credit card for purchases is a great way to build your credit score.


Credit cards are possibly the most well-known of these payment options, accounting for  nearly a third of all payments made in the U.S. Major credit card issuers, like American Express, Visa, Mastercard account for about 96% of all credit card transactions.

How They Work

Credit cards are a kind of revolving credit account that allows you to borrow funds to pay for purchases, paying off the balance over time. Credit cards have limits, and this will vary from account to account. This is the maximum balance the account can hold at any time. There isn’t a time frame that it needs to be paid off, but there does need to be a payment made monthly, determined by the credit card company. And any balance you have after one month is subject to interest—often at fairly high rates. In fact, the average interest rate for 2022 is 16.65%, which can start building on top of those balances quickly.


Credit cards have a lot of pluses for shoppers, which is why they are one of the most popular methods of payment. Some of these benefits include:

  • Convenience: Never bother with carrying cash and never worry if there is enough money in your account to cover a purchase (though each card does have a limit).
  • No overdraft fees: Instead of fees for overdraft, your card will simply be declined, avoiding extra charges.
  • Great for building credit history: when you make on time, monthly payments, and keep your balances low, credit cards are one of the easiest ways you can establish good credit.
  • More secure than cash: Users are generally not responsible for fraudulent transactions.  And unlike cash, if your card is lost or stolen, you can simply report it to the company to cancel it.
  • Great rewards: Many cards come with some form of reward from airline miles and travel points to cash back.


Although credit cards are convenient and can be a great way to build your credit, their ease of use can contribute to many of their cons, including:

  • High interest rates: Rates can be significantly higher than that on secured debt, like home and car loans, and all that interest can add up surprisingly quickly.
  • Easy to go into debt: No requirements to pay off balances each month, in conjunction with high interest rates can quickly lead to debt, as balances grow each day. If you do find yourself in debt, check out our post, 9 Tips for Paying Off Your Credit Card Debt.
  • Can damage your credit: If your balances are too high, you have too many cards, or you fail to make your minimum payments, your credit score will be negatively impacted, making it harder to qualify for other credit like home loans. However, if you use a credit card responsibly and make each payment on time, it can be a boon to your credit.

Which is best for Shenandoah residents?

There is no one financial solution that works for every individual, in every situation. However, regardless of how you choose to pay for your purchases, F&M Bank can help. From rewards checking accounts with debit cards, to low-interest rewards credit cards with no annual fees and great incentives, we have options to fit everyone’s needs. Stop by one of our Virginia branch locations today to apply for one of our great credit card options, and see what F&M Bank can do for you!

Six Keys to More Successful Investing

A successful investor maximizes gain and minimizes loss. Though there can be no guarantee that any investment strategy will be successful, and all investing involves risk, including the possible loss of principal, here are six basic principles that may help you invest more successfully.

Long-term compounding can help your nest egg grow

It’s the “rolling snowball” effect. Put simply, compounding pays you earnings on your reinvested earnings. The longer you leave your money at work for you, the more exciting the numbers get. For example, imagine an investment of $10,000 at an annual rate of return of 8 percent. In 20 years, assuming no withdrawals, your $10,000 investment would grow to $46,610. In 25 years, it would grow to $68,485, a 47 percent gain over the 20-year figure. After 30 years, your account would total $100,627. (Of course, this is a hypothetical example that does not reflect the performance of any specific investment.)

This simple example also assumes that no taxes are paid along the way, so all money stays invested. That would be the case in a tax-deferred individual retirement account or qualified retirement plan. The compounded earnings of deferred tax dollars are the main reason experts recommend fully funding all tax-advantaged retirement accounts and plans available to you.

While you should review your portfolio on a regular basis, the point is that money left alone in an investment offers the potential of a significant return over time. With time on your side, you don’t have to go for investment “home runs” to be successful.


Endure short-term pain for long-term gain

Riding out market volatility sounds simple, doesn’t it? But what if you’ve invested $10,000 in the stock market and the price of the stock drops like a stone one day? On paper, you’ve lost a bundle, offsetting the value of compounding you’re trying to achieve. It’s tough to stand pat.

There’s no denying it — the financial marketplace can be volatile. Still, it’s important to remember two things. First, the longer you stay with a diversified portfolio of investments, the more likely you are to reduce your risk and improve your opportunities for gain. Though past performance doesn’t guarantee future results, the long-term direction of the stock market has historically been up. Take your time horizon into account when establishing your investment game plan. For assets you’ll use soon, you may not have the time to wait out the market and should consider investments designed to protect your principal. Conversely, think long-term for goals that are many years away.

Second, during any given period of market or economic turmoil, some asset categories and some individual investments historically have been less volatile than others. Bond price swings, for example, have generally been less dramatic than stock prices. Though diversification alone cannot guarantee a profit or ensure against the possibility of loss, you can minimize your risk somewhat by diversifying your holdings among various classes of assets, as well as different types of assets within each class.


Spread your wealth through asset allocation

Asset allocation is the process by which you spread your dollars over several categories of investments, usually referred to as asset classes. The three most common asset classes are stocks, bonds, and cash or cash alternatives such as money market funds. You’ll also see the term “asset classes” used to refer to subcategories, such as aggressive growth stocks, long-term growth stocks, international stocks, government bonds (U.S., state, and local), high-quality corporate bonds, low-quality corporate bonds, and tax-free municipal bonds. A basic asset allocation would likely include at least stocks, bonds (or mutual funds of stocks and bonds), and cash or cash alternatives.

There are two main reasons why asset allocation is important. First, the mix of asset classes you own is a large factor — some say the biggest factor by far — in determining your overall investment portfolio performance. In other words, the basic decision about how to divide your money between stocks, bonds, and cash can be more important than your subsequent choice of specific investments.

Second, by dividing your investment dollars among asset classes that do not respond to the same market forces in the same way at the same time, you can help minimize the effects of market volatility while maximizing your chances of return in the long term. Ideally, if your investments in one class are performing poorly, assets in another class may be doing better. Any gains in the latter can help offset the losses in the former and help minimize their overall impact on your portfolio.


Consider your time horizon in your investment choices

In choosing an asset allocation, you’ll need to consider how quickly you might need to convert an investment into cash without loss of principal (your initial investment). Generally speaking, the sooner you’ll need your money, the wiser it is to keep it in investments whose prices remain relatively stable. You want to avoid a situation, for example, where you need to use money quickly that is tied up in an investment whose price is currently down.

Therefore, your investment choices should take into account how soon you’re planning to use your money. If you’ll need the money within the next one to three years, you may want to consider keeping it in a money market fund or other cash alternative whose aim is to protect your initial investment. Your rate of return may be lower than that possible with more volatile investments such as stocks, but you’ll breathe easier knowing that the principal you invested is relatively safe and quickly available, without concern over market conditions on a given day. Conversely, if you have a long time horizon — for example, if you’re investing for a retirement that’s many years away — you may be able to invest a greater percentage of your assets in something that might have more dramatic price changes but that might also have greater potential for long-term growth.

Note: Before investing in a mutual fund, consider its investment objectives, risks, charges, and expenses, all of which are outlined in the prospectus, available from the fund. Consider the information carefully before investing. Remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporate or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.


Dollar cost averaging: investing consistently and often

Dollar cost averaging is a method of accumulating shares of an investment by purchasing a fixed dollar amount at regularly scheduled intervals over an extended time. When the price is high, your fixed-dollar investment buys less; when prices are low, the same dollar investment will buy more shares. A regular, fixed-dollar investment should result in a lower average price per share than you would get buying a fixed number of shares at each investment interval. A workplace savings plan, such as a 401(k) plan that deducts the same amount from each paycheck and invests it through the plan, is one of the most well-known examples of dollar cost averaging in action.

Remember that, just as with any investment strategy, dollar cost averaging can’t guarantee you a profit or protect you against a loss if the market is declining. To maximize the potential effects of dollar cost averaging, you should also assess your ability to keep investing even when the market is down.

An alternative to dollar cost averaging would be trying to “time the market,” to predict how the price of the shares will fluctuate in the months ahead so you can make your full investment at the absolute lowest point. However, market timing is generally unprofitable guesswork. The discipline of regular investing is a much more manageable strategy, and it has the added benefit of automating the process.


Buy and hold, don’t buy and forget

Unless you plan to rely on luck, your portfolio’s long-term success will depend on periodically reviewing it. Maybe economic conditions have changed the prospects for a particular investment or an entire asset class. Also, your circumstances change over time, and your asset allocation will need to reflect those changes. For example, as you get closer to retirement, you might decide to increase your allocation to less volatile investments, or those that can provide a steady stream of income.

Another reason for periodic portfolio review: your various investments will likely appreciate at different rates, which will alter your asset allocation without any action on your part. For example, if you initially decided on an 80 percent to 20 percent mix of stock investments to bond investments, you might find that after several years the total value of your portfolio has become divided 88 percent to 12 percent (conversely, if stocks haven’t done well, you might have a 70-30 ratio of stocks to bonds in this hypothetical example). You need to review your portfolio periodically to see if you need to return to your original allocation.

To rebalance your portfolio, you would buy more of the asset class that’s lower than desired, possibly using some of the proceeds of the asset class that is now larger than you intended. Or you could retain your existing allocation but shift future investments into an asset class that you want to build up over time. But if you don’t review your holdings periodically, you won’t know whether a change is needed. Many people choose a specific date each year to do an annual review.


Contact us today for an assessment.


Prepared by Broadridge Investor Communications Solutions, Inc.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.




Eleven Things to Keep in Mind in a Crazy Market

Keeping your cool can be hard to do when the market goes on one of its periodic roller-coaster rides. It’s useful to have strategies in place that prepare you both financially and psychologically to handle market volatility. Here are 11 ways to help keep yourself from making hasty decisions that could have a long-term impact on your ability to achieve your financial goals.


  1. Have a game plan

game plan

Having predetermined guidelines that recognize the potential for turbulent times can help prevent emotion from dictating your decisions. For example, you might take a core-and-satellite approach, combining the use of buy-and-hold principles for the bulk of your portfolio with tactical investing based on a shorter-term market outlook. You also can use diversification to try to offset the risks of certain holdings with those of others. Diversification may not ensure a profit or protect against a loss, but it can help you understand and balance your risk in advance. And if you’re an active investor, a trading discipline can help you stick to a long-term strategy. For example, you might determine in advance that you will take profits when a security or index rises by a certain percentage, and buy when it has fallen by a set percentage.


  1. Know what you own and why you own it

When the market goes off the tracks, knowing why you originally made a specific investment can help you evaluate whether your reasons still hold, regardless of what the overall market is doing. Understanding how a specific holding fits in your portfolio also can help you consider whether a lower price might actually represent a buying opportunity.

And if you don’t understand why a security is in your portfolio, find out. That knowledge can be particularly important when the market goes south, especially if you’re considering replacing your current holding with another investment.


  1. Remember that everything is relative

Most of the variance in the returns of different portfolios can generally be attributed to their asset allocations. If you’ve got a well-diversified portfolio that includes multiple asset classes, it could be useful to compare its overall performance to relevant benchmarks. If you find that your investments are performing in line with those benchmarks, that realization might help you feel better about your overall strategy.

Even a diversified portfolio is no guarantee that you won’t suffer losses, of course. But diversification means that just because the S&P 500 might have dropped 10% or 20% doesn’t necessarily mean your overall portfolio is down by the same amount.


  1. Tell yourself that this too shall pass

The financial markets are historically cyclical. Even if you wish you had sold at what turned out to be a market peak, or regret having sat out a buying opportunity, you may well get another chance at some point. Even if you’re considering changes, a volatile market can be an inopportune time to turn your portfolio inside out. A well-thought-out asset allocation is still the basis of good investment planning.


  1. Be willing to learn from your mistakes

Anyone can look good during bull markets; smart investors are produced by the inevitable rough patches. Even the best investors aren’t right all the time. If an earlier choice now seems rash, sometimes the best strategy is to take a tax loss, learn from the experience, and apply the lesson to future decisions. Expert help can prepare you and your portfolio to both weather and take advantage of the market’s ups and downs. There is no assurance that working with a financial professional will improve investment results.


  1. Consider playing defense


During volatile periods in the stock market, many investors re-examine their allocation to such defensive sectors as consumer staples or utilities (though like all stocks, those sectors involve their own risks and are not necessarily immune from overall market movements). Dividends also can help cushion the impact of price swings.


  1. Stay on course by continuing to save


Even if the value of your holdings fluctuates, regularly adding to an account designed for a long-term goal may cushion the emotional impact of market swings. If losses are offset even in part by new savings, your bottom-line number might not be quite so discouraging.

If you’re using dollar-cost averaging — investing a specific amount regularly regardless of fluctuating price levels — you may be getting a bargain by buying when prices are down. However, dollar-cost averaging can’t guarantee a profit or protect against a loss. Also consider your ability to continue purchases through market slumps; systematic investing doesn’t work if you stop when prices are down. Finally, remember that the return and principal value of your investments will fluctuate with changes in market conditions, and shares may be worth more or less than their original cost when you sell them.


  1. Use cash to help manage your mindset


Cash can be the financial equivalent of taking deep breaths to relax. It can enhance your ability to make thoughtful decisions instead of impulsive ones. If you’ve established an appropriate asset allocation, you should have resources on hand to prevent having to sell stocks to meet ordinary expenses or, if you’ve used leverage, a margin call. Having a cash cushion coupled with a disciplined investing strategy can change your perspective on market volatility. Knowing that you’re positioned to take advantage of a downturn by picking up bargains may increase your ability to be patient.


  1. Remember your road map

Solid asset allocation is the basis of sound investing. One of the reasons a diversified portfolio is so important is that strong performance of some investments may help offset poor performance by others. Even with an appropriate asset allocation, some parts of a portfolio may struggle at any given time. Timing the market can be challenging under the best of circumstances; wildly volatile markets can magnify the impact of making a wrong decision just as the market is about to move in an unexpected direction, either up or down. Make sure your asset allocation is appropriate before making drastic changes.


  1. Look in the rear-view mirror

If you’re investing long term, sometimes it helps to take a look back and see how far you’ve come. If your portfolio is down this year, it can be easy to forget any progress you may already have made over the years. Though past performance is no guarantee of future returns, of course, the stock market’s long-term direction has historically been up. With stocks, it’s important to remember that having an investing strategy is only half the battle; the other half is being able to stick to it. Even if you’re able to avoid losses by being out of the market, will you know when to get back in? If patience has helped you build a nest egg, it just might be useful now, too.


  1. Take it easy


If you feel you need to make changes in your portfolio, there are ways to do so short of a total makeover. You could test the waters by redirecting a small percentage of one asset class to another. You could put any new money into investments you feel are well-positioned for the future, but leave the rest as is. You could set a stop-loss order to prevent an investment from falling below a certain level, or have an informal threshold below which you will not allow an investment to fall before selling. Even if you need or want to adjust your portfolio during a period of turmoil, those changes can — and probably should — happen in gradual steps. Taking gradual steps is one way to spread your risk over time, as well as over a variety of asset classes.


Schedule a free portfolio review with our advisors.


Prepared by Broadridge Investor Communications Solutions, Inc.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.




Handling Market Volatility

Conventional wisdom says that what goes up must come down. But even if you view market volatility as a normal occurrence, it can be tough to handle when your money is at stake. Though there’s no foolproof way to handle the ups and downs of the stock market, the following common-sense tips can help.


Don’t put your eggs all in one basket

Diversifying your investment portfolio is one of the key tools for trying to manage market volatility. Because asset classes often perform differently under different market conditions, spreading your assets across a variety of investments such as stocks, bonds, and cash alternatives has the potential to help reduce your overall risk. Ideally, a decline in one type of asset will be balanced out by a gain in another, though diversification can’t eliminate the possibility of market loss.

One way to diversify your portfolio is through asset allocation. Asset allocation involves identifying the asset classes that are appropriate for you and allocating a certain percentage of your investment dollars to each class (e.g., 70% to stocks, 20% to bonds, 10% to cash alternatives). A worksheet or an interactive tool may suggest a model or sample allocation based on your investment objectives, risk tolerance level, and investment time horizon, but that shouldn’t be a substitute for expert advice.


Focus on the forest, not on the trees

focus on forest

As the market goes up and down, it’s easy to become too focused on day-to-day returns. Instead, keep your eyes on your long-term investing goals and your overall portfolio. Although only you can decide how much investment risk you can handle if you still have years to invest, don’t overestimate the effect of short-term price fluctuations on your portfolio.


Look before you leap

When the market goes down and investment losses pile up, you may be tempted to pull out of the stock market altogether and look for less volatile investments. The modest returns that typically accompany low-risk investments may seem attractive when more risky investments are posting negative returns.

But before you leap into a different investment strategy, make sure you’re doing it for the right reasons. How you choose to invest your money should be consistent with your goals and time horizon.

For instance, putting a larger percentage of your investment dollars into vehicles that offer asset preservation and liquidity (the opportunity to easily access your funds) may be the right strategy for you if your investment goals are short term and you’ll need the money soon, or if you’re growing close to reaching a long-term goal such as retirement. But if you still have years to invest, keep in mind that stocks have historically outperformed stable-value investments over time, although past performance is no guarantee of future results. If you move most or all of your investment dollars into conservative investments, you’ve not only locked in any losses you might have, but you’ve also sacrificed the potential for higher returns. Investments seeking to achieve higher rates of return also involve a higher degree of risk.


 Look for the silver lining

Opportunity to buy shares

A down market, like every cloud, has a silver lining. The silver lining of a down market is the opportunity to buy shares of stock at lower prices. One of the ways you can do this is by using dollar-cost averaging. With dollar-cost averaging, you don’t try to “time the market” by buying shares at the moment when the price is lowest. In fact, you don’t worry about price at all. Instead, you invest a specific amount of money at regular intervals over time. When the price is higher, your investment dollars buy fewer shares of an investment, but when the price is lower, the same dollar amount will buy you more shares. A workplace savings plan, such as a 401(k) plan in which the same amount is deducted from each paycheck and invested through the plan, is one of the most well-known examples of dollar-cost averaging in action.


For example, let’s say that you decided to invest $300 each month. As the illustration shows, your regular monthly investment of $300 bought more shares when the price was low and fewer shares when the price was high:


Although dollar-cost averaging can’t guarantee you a profit or avoid a loss, a regular fixed dollar investment may result in a lower average price per share over time, assuming you continue to invest through all types of market conditions.

(This hypothetical example is for illustrative purposes only and does not represent the performance of any particular investment. Actual results will vary.)


Making dollar-cost averaging work for you

  • Get started as soon as possible. The longer you have to ride out the ups and downs of the market, the more opportunity you have to build a sizable investment account over time.
  • Stick with it. Dollar-cost averaging is a long-term investment strategy. Make sure you have the financial resources and the discipline to invest continuously through all types of market conditions, regardless of price fluctuations.
  • Take advantage of automatic deductions. Having your investment contributions deducted and invested automatically makes the process easy and convenient.


Don’t stick your head in the sand

check portfolio at least once a year

While focusing too much on short-term gains or losses is unwise, so is ignoring your investments. You should check your portfolio at least once a year —more frequently if the market is particularly volatile or when there have been significant changes in your life.

You may need to rebalance your portfolio to bring it back in line with your investment goals and risk tolerance. Rebalancing involves selling some investments in order to buy others. Investors should keep in mind that selling investments could result in a tax liability. Don’t hesitate to get expert help if you need it to decide which investment options are right for you.


Don’t count your chickens before they hatch

balance between risk and return

As the market recovers from a down cycle, elation quickly sets in. If the upswing lasts long enough, it’s easy to believe that investing in the stock market is a sure thing. But, of course, it never is. As many investors have learned the hard way, becoming overly optimistic about investing during the good times can be as detrimental as worrying too much during the bad times. The right approach in all kinds of markets is to be realistic. Have a plan, stick with it, and strike a comfortable balance between risk and return.


Contact us today for an assessment.



Calan Jansen

Vice President at F&M Bank
Infinex Financial Advisor with F&M Financial Services, Inc.



Prepared by Broadridge Investor Communications Solutions, Inc.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.