As it turns out, whether you’re selling your home or you just want to improve it, one of the best places to start is the kitchen, because kitchen remodels often have the highest return on investment, whether you’re selling or just wanting to make a change.

There are a variety of relatively simple do-it-yourself kitchen improvement projects. I found the following budget-friendly ideas that would have been good to know before I started:

• Do your homework first. It will likely save you time, money, and a headache or backache.
• Replacing kitchen cabinets can be an unnecessary expense. Painting, refinishing or refacing cabinets can cost a quarter of what new ones may cost. New cabinet hardware is also a great way to add life and personality to old cabinets.
• Replacing your countertops is second on the list of major expenses. Prices have come down considerably for granite and other popular stone finishes, so do your homework and get competing bids. You may even consider using granite tiles and installing them yourself. Laminates have also improved in quality and they are generally more economical.
• Give your kitchen a polished look with a backsplash. You can purchase a sheet of stainless steel and create a modern look, or you can tile your backsplash yourself. It’s much more affordable than having a designer do it and it adds color or a nice design element.
• Stainless appliances are nice but pricey. Consider replacing old appliances with basic white or black. You may even be able to use inserts from the manufacturer to make your existing appliances match.
• Update your lighting. Just like cabinet hardware, new light fixtures can add a nice designer touch without much expense. If you like your current fixtures but wish they were a different color, paint them. There are heat-resistant paints that cover just about any surface.
• One of the most economical ways to add new life to an old kitchen is with a can of quality paint. Semi-gloss or gloss is recommended for kitchens because it cleans up well.  Take the time to do the necessary prep work and masking to protect cabinets, counters, and appliances from spills or splatter.
• Add small touches. Something as simple as a piece of art, a bulletin board or a towel rack hung in the right location can add a personal touch as well as a designer look and feel.

Remember to be wise in your budgeting and spending for the project, too. Added debt can easily negate any added value. Consider doing a portion at a time in order to maintain fincancial strength and to avoid unecessary debt.

Consumer debt is not your friend

Here’s a simple MBA lesson: borrow money to buy things that go up in value. Borrow money if it improves your productivity and makes you more money. Leverage multiplies the power of your business because with leverage, every dollar you make in profit is multiplied.

That’s very different from the consumer version of this lesson: borrow money to buy things that go down in value. This is wrongheaded, short-term and irrational.

A few decades ago, mass marketers had a problem: American consumers had bought all they could buy. It was hard to grow because dispensable income was spoken for. The only way to grow was to steal market share, and that’s difficult. Enter consumer debt.

Why fight for a bigger piece of pie when you can make the whole pie bigger, the marketers think. Charge it, they say. Put it on your card. Pay now, why not, it’s like it’s free, because you don’t have to repay it until later. Why buy a Honda for cash when you can buy a Lexus with credit?

One argument is income shifting: you’re going to make a lot of money later, so borrow now so you can have a nicer car, etc. Then, when money is worth less to you, you can pay it back. This idea is actually reasonably new–fifty years or so–and it’s not borne out by what actually happens. Debt creates stress, stress creates behaviors that don’t lead to happiness…

The other argument is that it’s been around so long, it’s like a trusted friend. Debt seems like fun for a long time, until it’s not. And everyone does it. We’ve been sold very hard on acquisition = happiness, and consumer debt is the engine that permits this. Until it doesn’t.

The thing is, debt has become a marketed product in and of itself. It’s not a free service or a convenience, it’s a massive industry. And that industry works with all the other players in the system to grow, because (at least for now) when they grow, other marketers benefit as well. As soon as you get into serious consumer debt, you work for them, not for you.

It’s simple: when the utility of what you want (however you measure it) is less than the cost of the debt, don’t buy it.

Go read Dave Ramsey’s post: The truth about debt.

Dave has spent his career teaching people a lesson that many marketers are afraid of: debt is expensive, it compounds, it punishes you. Stuff now is rarely better than stuff later, because stuff now costs you forever if you go into debt to purchase it. He’s persistent and persuasive.

It takes discipline to forego pleasure now to avoid a lifetime of pain and fees. Many people, especially when confronted with a blizzard of debt marketing, can’t resist.

There’s a lot of discussion about change in the banking industry right now.  Business plans have been turned on their ears.  Once solid and seemingly safe ways to make loans are now being questioned.  It’s getting more difficult for financial institutions to provide distinguishing products and services.  It’s even getting hard to tell what a bank is or is not anymore.

What an incredible opportunity this presents for all of us!  This shifting is creating an environment where it has never been a better time for consumers to make their voices heard, and for bankers (at least the smart and successful ones) to be taking the time to seriously consider every customer comment, complaint, note of praise, or suggestion.

I’m going to let you in on a little secret…this is not a totally new concept to community-based financial institutions.  I’m not talking about the big guys claiming to be community banks, I’m talking about the true community-centered banks that take the time to look a customer in the eye, who may have had to eat some crow now and then, and who have tried to adjust to their customers’ needs and wants in order to stay alive in a highly-regulated and viciously-competitive marketplace.  For these smaller institutions, listening and adapting to your needs is something they try very hard to do.

Now, in the interest of full disclosure, not every small bank or credit union fits this description, but generally they try.  They at least try harder and are more capable of faster change than the giant institutions that care more about making money off of your money than they do about earning your trust, providing you honest services at a reasonable rate, and investing in your future as a partner–whether you have $5 or $5,000,000.

So here’s a chance for you to make your voice heard.  Whether you’re a customer of Western Community Bank or not, comment on this post.  If you’re reading this on our blog, comment below.  If you’re an email subscriber, visit http://smartbankingtips.com/ and leave us your thoughts.  Help us transform banking to be better for you.  Help us strengthen our communities.  Help us better understand your needs so we can better serve you. 

Our ears are open.  We’re a little nervous.  But we want to hear from you.  The platform is now yours…

Here’s where I see some of the greatest opportunities for individuals, families, and businesses: 

• Improved lending standards. Though they will remain tighter than what we’ve seen in the last few years, lending standards will be different in good ways. It seems that everyone is internalizing the benefits of the sound, fair, and more responsible versions of standards from the last 15 years. These fresh standards will be better because the economy is forcing all of us to be more responsible and accountable. Sound standards are good for the economy and everyone participating.
• Customer service matters, but doesn’t replace technology. This one is a paradox. I argued in part one that technology matters but doesn’t replace customer service. In fact, both are true. In 2010 we’ll see an increase in the adoption of technologies designed specifically to assist the customer–technologies that do what people can’t. So while it’s critically important for banks to give you the attention you deserve, when your bank chooses to become IT savvy and makes sound business IT investment decisions, they’re going a long way to invest in your  financial success and future needs.
• New regulations will require more accountability from everyone. The Federal Reserve has stated: “Our goal is to ensure that consumers receive the information they need“.  Combined with other things I have read in trade publications, regulators are working to require the banking industry and the consumers who use the products to be more responsible for their actions.  Or in the words of  economist Merton Finkler, “In a highly leveraged economy, fiscal and monetary policies are not enough. We have to make changes in lending behavior.  Excessive debt accumulation, whether it be by the government, banks, corporations or consumers, poses greater systemic risks.”  In our ever-shrinking world, the actions of individuals matter more than ever.
• Banking really is no longer a service, but a commodity (like just about everything else). From Wikipedia: “A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. the same no matter who produces it…Commoditization occurs as a goods or services market loses differentiation across its supply base…As such, goods that formerly carried premium margins for market participants have become commodities…” It hurts me to say this, but that’s a pretty good definition of banking, no matter where you choose to put your money.  The winners in 2010 and beyond (and the banks you should be looking to do business with) will no longer be determined by their products or services, but rather by how well they deliver on their promises and by their willingness to give back to the people and communities they serve.  This is especially true for the smaller “Main Street” banks that are more in touch with the local economies and communites they serve.

What are your thoughts?  What changes do you want to see?  What would you adjust?

“The annual holiday shopping season is a peak time for identity theft, so it’s critical that consumers be on high alert and educate themselves in order to help reduce the risk of becoming victims,” said Adam Levin, chairman, Identity Theft 911, which offers ID theft resolution services.

His company offered these tips for safer holiday shopping:

• When shopping online, look for a small “padlock” icon in the browser, which means the site has been verified to be secure.
• Use credit cards instead of debit cards.
• Keep credit card numbers secret. Don’t store credit card and personal information in any online accounts
• Check bank and credit card statements and accounts every day to make sure each transaction is legitimate. Remember that shopping Web sites have no reason to ask for Social Security numbers or passwords, so never provide them.
• Never send payment information via e-mail.
• Don’t use automated teller machines that are in secluded areas. They are more likely to be equipped with card readers than an ATM in or near a bank.

Jeanette Bennett, BusinessQ: How would you describe the current banking environment in Utah Valley?

Ed Sanches, Western Community Bank:  The challenges we are facing are unprecedented.  But this has brought out more commitment from bankers.  There is the old joke about “bankers’ hours,” but the lights are on late in managers’ offices.  This is directly related to the commitment bankers now have, not only to their clients, but also to the community they are serving.  Bankers are pulling together.

Bennett:  The perception exists that it is difficult to borrow money right now.  Is that true?

Sanches:  No bank right now or finance institution want to bring on new loans that are going to be trouble for them.  No bank really ever has.  What caused the recession wasn’t commercial banks like ours. In reality, it was the mortgage and investment industry that said everyone deserves a home, no money down.  Consumers got in their mind that all banks should offer that.  Some banks did get sucked into that and now they are feeling the ramifications.  For the majority of Utah Valley banks, it is business as usual for qualified borrowers.

Bennett:  What are some examples of good news in our community?

Sanches:  Short- and long-term rates are at all-time lows.  For those who are qualified, short-term rates are very low.  Mortgage rates are very low…Banks in Utah County are, for the most part, strong, well-capitalized and actively looking for new clients.  It really is refreshing.  There are less people coming in to borrow money, but those who are coming in have the capability to repay what they are asking for…We are in business to lend money.

In fact, I started searching for the word “bank” in the article with these results:

“bank” — did not appear in the body of the article–not even once!
“banks” — another no-show
“banker” — never appears
“bankers” — the term is only used twice
“banking” — one appearance as a description, as in “banking regulators”

What this article was really about was credit card companies and credit card issuers.  In the interest of full disclosure, this means large, very large companies with Industrial Loan Companies or very large banks–not ALL banks as suggested, and certainly not smaller, community-based financial institutions which may not even offer credit cards.

The bottom line is this: You should be wary of the blanket use of the term “bank.”  Remember that the current economic environment was created by large, even “too-large-to-fail” investment banks and greedy institutions (many of which are not banks) that conducted very little (if any) business directly with American consumers.  Also remember that a large part of the reason our markets are still operating–be it with a limp–is because there are hundreds, if not thousands, of smaller community-based banks at the foundation of our nation’s financial system trying desperately to treat people with the dignity, respect, and honesty they deserve.  These smaller banks have not, nor ever will “declare war” on their customers, because that’s not the way to treat your friends and neighbors.

I will give the author one shred of credit: she managed to point out that you should always be careful with credit cards and credit card debt, and that you should try to get your balances paid off as soon as possible to avoid being the unsuspecting victim of a potential “war” with your credit card issuer.  Even when masked in garbage reporting, that is always sound counsel.

1.  You Can CORRECT Your Credit Report when it is in Error
Your credit report is the summary of your financial reliability–your history of paying debts and other bills.  There are three major credit bureaus–Equifax, Experian and TransUnion.  Federal law requires these credit bureaus to investigate any complaint you bring to them in writing (usually within 30 days), send you a prompt response and correct any errors.  You can learn more about amending and correcting your credit report by visiting the FTC’s website. 

2.  You Can Take Steps to IMPROVE Your Credit Score
Your credit score is a number lenders use to help evaluate your credit-worthiness.  Many lenders use a system called the FICO Score.  As a rule, a good score will mean better chances of getting credit at an attractive rate, so taking steps to improve your score can be well worth the effort. Here are some steps to take:

• Pay bills on time.
• Keep credit card balances low.
• Keep debt to less than 30% of your available credit.
• Consider closing unused or forgotten accounts.
• Diversify your credit (e.g., not just many cards, but cards plus installment credit).
• Pay off debt rather than transferring it between cards or accounts.

3.  Monitoring Your Credit is FREE
You can get a free copy of your credit report every year from each of the three national credit reporting agencies.  That means you can monitor your credit year-round, ordering a report from each of the three once every four months.  There is only one online source authorized to give you your report for free: http://www.annualcreditreport.com/. Note: You may be offered additional products or service while on the authorized website, but you are not required to make a purchase to receive your free annual credit report.

A little prevention can go a long way–especially when it comes to your credit and finances.  Make it a point to review your finances regularly, and watch for these signs of over-extended credit:

• Paying only the minimum payment month after month
• Being out of cash constantly
• Being late on important payments such as mortgage
• Taking longer and longer to pay off balances
• Borrowing from one lender to pay another

The FDIC directly examines and supervises more than half of the institutions in the banking system. Banks can be chartered by the states or by the federal government. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. For example, Western Community Bank is a state-chartered bank that opted not to join the Federal Reserve System (like most community banks in the country), so the FDIC is Western Community Bank’s primary regulator.

Banks have to comply with a host of federal and state regulations and safe operating guidelines designed to protect depositors and their money.  The FDIC regularly sends teams of examiners to banks to review compliance with banking regulations, information security guidelines, and prescribed safe and sound operating procedures.  It’s the FDIC’s supervisory role that plays a large part in the service, and services, you receive from your bank.

Checking, savings, loans and other accounts and products are made available in accordance with banking regulation.  Computer systems, electronic and paper information, and how that information is used is carefully managed and protected by regulation.  The interest rates for savings accounts and loans are also managed, in part, by regulatory requirements for equity and availability.  Therefore, the challenge for your bank is to offer all of its services and products in a highly regulated industry, while doing its best to delight you.

Certainly personalities, cultures, and management styles will play a role in the kind of service you receive at your bank.  But from an operational and procedural standpoint, the FDIC plays an important role in maintaining the stability of, and public confidence in the nation’s financial system by insuring deposits and examining and supervising financial institutions.

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