Author Archives: PBTC Blogger

Interest Rates - How They Affect Your Mortgage

Interest Rates: How They Affect Your Mortgage Loans 

It’s no secret house hunters have faced the grim reality of rising interest rates. Rising mortgage rates result in rising costs of buying a home. In this blog, we will outline how current interest rates are affecting mortgage loans, as well as outline the main differences between a fixed-rate mortgage and an adjustable-rate mortgage loan.  

What is a Fixed-Rate Mortgage  

A fixed-rate mortgage is a home loan in which the interest rate remains the same over the lifetime of the loan. Fixed-rate mortgages are the most popular form of mortgages in the U.S. Compared to ARMs, many find the initial introductory rate on an ARM may be lower than those on a fixed-rate mortgage, but with an ARM you may find it to be more expensive over the life of the loan. The two most prevalent types of fixed-rate mortgages are the 15-year fixed-rate mortgage, where the loan lasts 15 years or the 30-year fixed-rate mortgage, where the loan is paid off after 30 years.  

What is an Adjustable-Rate Mortgage (ARM) 

An adjustable-rate mortgage or ARM is a home loan where, like the name, the interest rate can change over time. An ARM differs from a fixed rate mortgage where the rate stays the same for the life of the loan.  The interest rate on an ARM is fixed for an initial period where it will not change. When the fixed period ends, the rate will fluctuate with limits based on the current market rates. A true ARM will have a fixed interest rate for just one year.  

Common Types of Adjustable-Rate Mortgages 

  • 1-year ARM: The initial rate is fixed for 1 year, after which the rate can be adjusted once a year. 
  • 3/1 hybrid ARM: The initial rate is fixed for the first 3 years, after which the rate can be adjusted once a year. 
  • 5/1 hybrid ARM: The initial rate is fixed for 5 years, after which the rate can be adjusted once a year. 

How Interest Rates Affect Your Monthly Mortgage Payment 

Your mortgage interest rate is very important to understand when utilizing a mortgage loan as it directly impacts your monthly payment, as well as your loan’s total cost over the life span of the loan. Dependent on the interest rate and your loan term, your monthly payment could be more than you expected to be spending. A 1.5% percentage point jump may not seem like a whole lot. Keep reading as we walk you through some examples.  

Fixed-Rate Mortgage Loan Example:  

For example, if you have a 30-year fixed loan at the amount of $300,000 with 3.5% interest, your monthly payment will be $1,347.00. Keeping the loan and interest amounts the same but with a 15-year fixed loan term, your monthly payment would be $2,145.00.  

If the interest rate were to be 5% on a $300,000 30-year fixed loan, your monthly payment would be $1,610.00. With a 15-year fixed loan your monthly payment would be $2,372.00.  

Adjustable-Rate Mortgage Loan Example:  

If you were to get a 5/1 ARM on a $250,000 loan amount, with an initial interest rate of 3.5% and with 2/2/5 caps your initial payment would be $1,122.61. Compared to a fixed rate, for the first five years you’d be saving $70.93 per month. In the sixth year, your ARM interest rate will rise to $1,377.05. In the seventh year, with a 7.5% interest rate your payment would be $1,648.71. Finally if the rates continue to rise your eighth year could be $1,788.81.  

As you can see from the examples above it is very important to look at your options when choosing to buy a house utilizing a mortgage loan. High interests’ rates can make a home you’d think you could typically afford out of your budget due to extra costs tacked on through your interest rate. As you can see it is also extremely important to go through your loan term options. The loan you choose to go with can make or break you home buying situation. If you have questions about our loan options, visit our website or stop in to speak with one of our experience local mortgage lenders. 

Peoples Bank & Trust Co.  

Member FDIC  

Equal Housing Lender  

NMLS #407724 

Home Renovation and Remodeling Trends

2023 Home Renovation and Remodeling Trends 

Home renovations and remodels can be a great way to increase your home’s value if you are looking to sell or simply make your house your dream home. Tailoring your home with these renovation and remodeling trends can help align modern trends and your style preferences. Keep reading to learn the top renovation and remodel trends for 2023 to inspire ideas that may appeal to you.  

Renovation vs. Remodel?  

Many do not know the true difference between the words renovation and remodel, most typically use the two interchangeably. When speaking with a contractor or mortgage lender it is important to understand the difference between the two terms.  

Deciding Which Trend is Worth the Spend 

Each year the trends for renovations and remodeling change, so at the end of the day it is really up to you and what you want for the space. If you are looking to sell in the next year, it may be worth looking into current trends, as well as what will best fit your home and the layout to amplify space, functionality, and cohesively make the space look more modern.  

Trends tend to stay in the most used areas of the home as those are the areas we tend to want to dress up since we use them most. If you are looking to stay in your home for the next few years, don’t be completely phased by current trend. Instead take bits and pieces to make for the best renovation or remodel that you can to enjoy while you are there, but also add to the value of your home when and if you choose to ever sell.  

  1. Spa Bathroom 

The spa bathroom has been a trending project many have upgraded to. This is a space we use daily, so whether you’re using it to unwind after a long day or to start your day off in a calming environment – the spa bathroom is a great trend to follow! 

The best part about this trend is it could be a renovation or a remodel depending on what you want and the space you are working with. A larger bathroom allows for a larger shower and or bath, as well as more built-in shelves or cabinets for storage. 

  1. Large Windows 

At some point we all have to replace windows, especially if you have a fixer upper or an older home. Everyone can appreciate natural light in their home. Large windows with banks are a huge trend for 2023. Some window trends can range from large windows on multiple walls, floor to ceiling window wall, and glass framed doors to an outdoor space. Natural light has the power to make your space feel larger and with large windows it can add a simple elegance. This is a trend that could also save you money with UV blocking window technologies and lower lighting needs.  

  1. Built-In Storage 

If you are looking to renovate or remodel, it is well worth it to consider adding more built-in storage. Even for those who are more on the minimalistic side, storage is always useful and will never go out of style. This trend helps maintain organization while making your home feel and look pulled together. If you are wondering where to add storage, really anywhere. Think about adding cubbies to your mudroom, places in your bathroom to wrangle cords, products, accessories, and such.  

The thing with built-in-storage it can be completely hidden or more of an open look which is a huge trend. This is a great way to give your walls use and have storage to not feel as though your items do not have a place.  

  1. Accent Wallpaper  

This trend is great for a renovation project and can completely transform your space on a budget. Like many things, wallpaper has made its comeback. Many interior design trendsetters have brought back bold wallpaper to catch the eye, add texture, and completely take the space in a new and modern direction.  

Wallpaper can work in any room and doesn’t have to be on every wall. Wallpaper is a great option if you need an easy and less time-consuming option than painting. This is a great option to add personality to any space, from the kids’ room to the bathroom wallpaper is a hit and can easily be removed if you ever get tired of it.  

  1. Multifunctional Space  

For the most part we can all agree the last few years have shown us having areas of multi-functional space for work, school, personal, etc. can be more important than wasted space. Multifunctional rooms have only become more and more popular and are a huge trend as we enter 2023.  

Not only does a multi-functional space have to work for your day-time endeavors’, but to allow for relaxation and unwinding too. Furniture can play a huge role in making your space multifunctional, such as couches in offices or extra seating in the kitchen making your space always ready for hosting, family, and extra space for you to use all-areas of your home.  

Here are some ideas to implement into your multi-functional space:  

  • Islands: Islands can double as extra seating, a dining table, workspace, really anything you need! 
  • Bedroom/Office: A bedroom can be wasted space if not always used, pair this with an office or a pull-out couch to make this room stylish and functional.  
  • Functional Mudroom: We all need a “drop zone” to transition from outdoors to being home. This is a great option to help reduce clutter yet be functional for your lifestyle.  
  • Laundry Room: Laundry is a task we all complete, make this space organized and useful for you and your family’s lifestyle. You may even pair this with your mudroom. 

Use these trends as some motivation as you look into options to maximize your space as you go through a remodel or renovation. Keep in mind all projects should always work for your unique lifestyle, budget, and style. Yes, there are trends that are more valuable when it comes time to sell your home, but make sure you are making yourself a happy homeowner making the space what you want – most likely a buyer will look past a non-functional option anyway! 

Peoples Bank & Trust Co.  

Member FDIC  

Equal Housing Lender  

The Ultimate Guide to a Roth IRA

The Ultimate Guide to a Roth IRA 

If you’re looking to supplement your 401k offered by your employer or you currently do not have an option for a retirement savings account, a Roth IRA could be the savings option for you. Keep reading to learn the ins and outs of a Roth IRAs so you can decide if Roth IRA is the right option for you! 

What is a Roth IRA?  

Planning for retirement is super important. Whether you’re looking to get started or wanting to incorporate another savings option, a Roth IRA can be a fantastic option for retirement savings. What is a Roth IRA? It is important to understand when it comes to IRA accounts your options are Traditional or Roth. A Roth IRA is an individual retirement account where your money invested has already been taxed. A Traditional or Roth IRA are accounts you open on your own and are not affiliated with an employer.  

The most unique feature of a Roth IRA is how the government taxes it. Unlike a traditional 401(k) or a Traditional IRA, your contributions going in is taxed at that time rather than your earnings when you choose to withdraw them. 

Top Benefits of a Roth IRA 

  1. Tax-Free Income When You Retire 

As we have mentioned, you are paying taxes upfront with a Roth IRA. There could be a chance you are taxed at a lower tax bracket during that time so when you are a retiree you will essentially be avoiding taxes as you take out those funds. 

  1. Great Option If You Don’t Have a 401(k) 

If you don’t have a 401(k) through your employer, as long as you have earned income, you can contribute to a Roth IRA as your saving plan for retirement. 

  1. You Do Not Have to Take Money Out of a Roth IRA 

With a 401(k) or a Traditional IRA, you are required to take out a certain amount once you reach age 72 – this is known as a required minimum distribution (RMD). With a Roth IRA you will not run into this as it has not RMDs, though when you die your account beneficiary may have to take them. 

  1. Roth IRA Contributions Can Be Withdrawn at Any Time 

Since you’ve already paid taxes on your Roth IRA you can withdraw the funds you contributed at any time tax-free as long as you have had a Roth IRA for 5 years. Keep in mind if you withdraw earnings before age 59 ½, you may be penalized by the IRS. 

  1. You May Use a Roth IRA for Certain Life Expenses 

With a Roth IRA you are able to use your contributions for a first-time home purchase. You can withdraw up to $10,000 ($20,000 for married couples) from your Roth IRA penalty free to pay for your first-home purchase. Another life expense you can use your Roth IRA contributions on is to pay for college or higher education for yourself, a child, or even a spouse. You will be able to withdraw penalty free though you will still owe income taxes if earnings are included. 

  1. There Are No Age Limits to a Roth IRA 

With a Traditional IRA you can’t make contributions until age 72, with a Roth IRA there is no age limit for contributing. In 2023, with a Roth IRA you can only contribute $6,500 under the age of 50. The limit goes up to $7,500 once you are 50 or older.  

If you’ve decided a Roth IRA is the option for you or have further questions, we would be happy to help! Contact us today to learn more about our retirement savings options to get you started! 

Peoples Bank & Trust Co.  

Member FDIC  

Equal Housing Lender  

The Spender's Guide to Saving Money in 2023

The Spender’s Guide to Saving Money in 2023 

For those who love to spend money or often find it hard to restrain their purchases – this blog is meant for you to start 2023 off with smart saving habits. Spending money is most definitely easier than saving. Here are some tips to rein in on spending as well as save when spending. Keep reading to learn the spender’s guide to saving money in 2023.  

Step 1: Automate Your Paychecks  

Automating your paychecks is an easy way to save your money and hold yourself accountable to your budget. Distributing your paycheck each time will send a percentage of your money (up to you the percentage you set) directly into your designated account. Doing this allows you to allocate funds towards your savings, emergency fund, checking account, budget for bills, etc. It is important to set aside money for your fixed expenses as well as money used for coffee outings, gas, occasional splurges and such.  

Need a savings or checking account – we can help!  

Step 2: Utilize Autopay 

Along with automating your paycheck, it can also be a tip for budgeting and saving by utilizing autopay. Some companies even offer discounts simply for using automated payments. Companies such as internet providers, cellular businesses, and television networks will offer similar discounts. Look into this option to not only keep you organized and on track, but potentially add some additional savings to your pocket.  

The benefit of autopay can be a reward to you as it shows a level of commitment to paying your bills to a company. This is a great option to a avoid the potential of a late payment solely due to forgetting.  

Step 3: Don’t Keep Too Much Cash  

Spending cash can work for some but can also be difficult for others to spend sparingly. Even though you may automate your payments and paycheck, you can still leave aside a few hundred dollars (or whatever best fits your budget) as spending cash. A tip is to not keep your cash casually in your wallet to avoid spending it on random purchases. Plan out your spending in advance and get your cash out when and if you need it.  

If you find yourself spending money on non-essentials frequently, consider getting a white board or a day planner to list out those items, as well as items you have run out of, to plan into your budget in advance to grab the next time you are out.  

Step 4: Take Advantage of Cash Back on Your Purchases 

There are so many ways to take advantage of cashback on your everyday purchases. Many credit cards come with rewards that feature a cashback program. If you need a credit card, click here to learn more.  

Step 5: Use Store Rewards and Coupons  

When you plan to make a purchase, plan in advance what you’ll be getting and do your research to see if you can take advantage of your store rewards or apply any coupons. Most common stores typically over a rewards program. Sign up for store rewards and notifications for deals or coupons – if you find it offers no benefits, it is simple to unsubscribe.  

Saving money can be hard especially after a season known for spending! Take the tips from our Spender’s Guide for Saving to apply into your day-today and new year’s savings resolutions! 

Peoples Bank & Trust Co.  

Member FDIC  

Equal Housing Lender  

What is Phishing?

What is Phishing?

Your cybersecurity is of the utmost importance. Do you know what phishing is? Keep reading to learn what phishing is, how it can happen, and tips to tighten up your cybersecurity. 

Definition of Phishing

When criminals go phishing, do not take the bait. Phishing is when criminals create fake emails and lure you into clicking. These emails commonly bait you into clicking malicious software that will download on your computer or convince you to share personal information. Phishing happens daily, it is extremely important to know what it is, what to look for and how to handle it. 

Don’t Click It

If you see a suspicious email you feel could be a phishing attempt, DO NOT CLICK IT. Believe it or not, it can be difficult to spot a fake email. If you’re at the office and the email came to your work email address, report it to your IT manager or security officer as quickly as possible. On your personal email, do not click on any links (even the unsubscribe link) or reply back to the email – JUST DELETE IT. You can take your protection a step further and block the sending address from your email program, too.

Here’s how to… 

Here’s how to:

Signs of Phishing 

Recognizing a phishing attempt can be fishy and almost difficult sometimes. If you have a feeling an email looks off, go with your gut. Here are the top signs that may point to a phishing attempt: 

  • Contains an offer that is too good to be true
  • Very urgent language 
  • Uses threatening or alarming language
  • Ambiguous greetings
  • Requests personal information
  • Bad grammar
  • Misspellings
  • Sending from an email address that doesn’t match the person or company
  • The urgency to click links or attachments
  • Strange requests

Don’t be scammed by a phishing attempt. It is important to educate your household about what to look for in a fake email and how to go about handling it to ensure your safety and cybersecurity. Keep your devices and accounts password-protected and be sure to clear out your inbox frequently. Don’t take the phishing bate!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Money Moves for College Students

Money Moves for College Students

College is a fantastic learning experience for young adults but can often be a very expensive time of life. While many wouldn’t change their college experience for anything, we can all agree there would have been some things we would have done differently financially. Keep reading for some money tips for college students!

1. Don’t Carry a Balance on Your Credit Card

What may seem like a given, in a time of life where school is your primary focus, do not spend more than you can pay off in a month. College is a credit time to manage a credit card as well as build up your credit. Having poor money habits can easily tank your credit score and potentially put you in debt. If you do not have the money in the bank to pay for your expenses, do not charge your credit card. 

Need a credit card? Visit our website to get started!

2. Routinely Put Money In Your Bank Account

College can be a difficult time for consistent savings, but the best thing you can do is save every penny you get and stash it away in your bank account. Whether your money comes from a summer job, part-time job, or even a gift – save as much as you can! 

If you are in need of a checking or savings account, visit our website!

3. Be Smart with Your Student Loans

Paying for college can be tough and student loans are a great option to make it work for many students and families. Always keep in mind they are loans that you will eventually pay back. Apply for as many scholarships and grants as you can to help pay for your college. The less you borrow now the less you pay back later! 

If you are in need of a loan for college, we can help!

4. Work a Job If You Are Able

Working a job throughout college can often be a struggle, but if you are able, take advantage of the opportunity! Not only is this an option to make money to save up, but it is a good experience to add to your resume. There are many flexible jobs to apply for, especially for college students. Utilize your school’s resources or speak with a counselor to help you find a good option – potentially an opportunity on campus! 

College is a phenomenal time for students to learn not only the career path they choose to take, but real-life experience of expenses, budgeting, building credit, and more. Don’t let your money habits slip up in college. Incorporate these tips into your routine or share them with a college student in your life! Visit Peoples Bank & Trust Co to get the accounts and resources you need for financial success throughout your college years. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Home Equity Loan vs. Home Equity Line of Credit

Home Equity Loan vs. Home Equity Line of Credit 

A Home Equity Loan and Home Equity Line of Credit are both loans that use your home as collateral. Though they are very similar, they are different loans. Keep reading to learn what a Home Equity Loan and Home Equity Line of Credit are, their differences, and their benefits!

What Are They?

A Home Equity Loan and Home Equity Line of Credit, commonly known as a HELOC, are both loans which use your home as collateral. Both are fantastic options for borrowing money if you’ve paid down a significant portion of your mortgage. 

Home Equity Line of Credit: A HELOC is a line of credit in which the lender will agree to lend a maximum amount within an agreed-upon period and variable interest rate. Essentially, a HELOC uses a percentage of your home’s equity to provide a revolving line of credit, much like a credit card. Your monthly payments with a home equity line of credit will change over time. With a HELOC, disbursement of funds is made on an as-needed basis and repayment is interest-only during the draw period; you repay all the principal and any remaining interest afterward. 

Home Equity Loan: A home equity loan is very similar; however, a home equity loan is a lump sum that is disbursed upfront and paid back in fixed installments. Your monthly payments will be the same each month. With a home equity loan, disbursement of funds is an upfront lump sum and repayment starts as soon as the loan is disbursed. 

The Main Difference

HELOC: A home equity line of credit’s interest rate may vary and therefore your monthly payments on a home equity line of credit may change over time. With a HELOC, disbursement of funds is made as you need them, and repayment is interest-only during the draw period; you repay the principal and any remaining interest afterward.

Home Equity Loan: With a home equity loan your interest rate is fixed and therefore your monthly payments will be the same each month. With a home equity loan, disbursement of funds is an upfront lump sum and repayment starts as soon as the loan is disbursed. 

Pros and Cons

Home Equity Line of Credit (HELOC) 

Pros:

  • You only borrow as much money as you need
  • Flexible repayment
  • Tax deduction
  • May come with little to no fees

Cons:

  • Variable interest rates (changes based on market fluctuation)
  • Not a set repayment plan (can be a pro for some)
  • Maybe more debt to repay as it is a long-term credit option
  • Could lose your home if you default on the HELOC

Home Equity Loan

Pros:

  • Fixed interest rate
  • You borrow a lump sum to use for nearly anything
  • Little to no fees
  • Tax deductible
  • Set repayment plan (could be a con for some)

Cons:

  • Best terms go to those with a good credit score
  • Need a lot of home equity 
  • If property values decline, you owe more than your home is worth
  • Could lose your home if you default on the loan

As you can see, a home equity loan and home equity line of credit are fantastic options for homeowners. Now that you know the benefits and main differences, which is best for you? These loans are a great source of value to access cash for renovations, large purchases, home remodel projects, college tuition, a new vehicle, or nearly any other need. Visit our website to learn more or stop in to talk with a lender!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS# 407724

Host For Less

Host for Less and Without Stress This Holiday Season 

Hosting is what many look forward to during the holiday season, but with the excitement, it can also bring stress. Whether you’re hosting Christmas or a small gathering, these tips will ensure your event is a blast. Take the stress out of hosting with these effortless tips for entertaining! 

Coordinate Schedules and Plans Early On 

When it comes to getting a holiday party on the calendar, it can often be extremely difficult. Before you get to planning dishes, décor, and more consider whom you plan to invite and a realistic budget you’d like to stick to. You are better off sending invitations early on and requesting RSVPs by a set date. Doing this will get your party on everyone’s calendar and give you a ballpark idea of guests attending. 

Create Your Own Invitations

Invitations are great; however, they are an additional cost. To lower this expense, consider creating your own invitation. You could utilize a Christmas Card as your invitation as well to knock out two birds with one stone. If you’d like to ditch the invitation altogether, consider sending out a virtual invitation or creating an event on Facebook with your friends. 

Plan Out Your Menu 

One of the best parts about the holidays is all of the wonderful seasonal dishes. When you get your RSVPs start considering the easiest and most budget-friendly options. If you plan to have cocktails, consider a few signature holiday cocktails or stick to the basics rather than having too many options or overcomplicating!

If cooking is not your favorite, consider catering or hosting a potluck-style party. A potluck can be an easy option for everyone attending to each bring a dish or side. If you’re looking for some ideas on food, consider:

  • Charcuterie night (each brings an item)
  • Themed charcuterie board night (assign a themed board to each attendee – cheese, Italian, desserts, dips, fruits, etc.) 
  • Dip night 
  • Traditional potluck
  • Nacho bar
  • Make your own pizza

Stop Doing Dishes

To keep it simple for you and your guests, stop doing the dishes. No one wants to be preoccupied at your party. It’s natural to want things to look beautiful and taste delicious, but you will be more likely to enjoy your time and avoid the hassle with dishes you can toss. There are great options you can toss that look identical to real tableware. A top holiday hosting tip is to get Tupperware or to-go boxes for guests to take home food. This is a great option for less cleanup and less food taking up space in your fridge. 

Utilize Transitional Décor 

Décor is so much fun to fancy up your event, but it can also eat up your budget if you allow it. When it comes to holiday décor, use items you already own or buy items you can religiously reuse. If you are thinking of creating a theme, go with a theme you already have décor for. Consider doing some DIY projects for décor options, a craft, and a table setting – bonus!

Make entertaining this holiday season effortless with these tips for less money and less stress. Happy Holidays! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Why is Financial Literacy So Important

Why is Financial Literacy So Important? 

Lacking financial knowledge can result in bad money habits such as saving and investing. In this blog, we will outline what financial literacy is, why it is so important, as well as some tips to actively become more financially literate. How we spend and manage our money is crucial to our financial stability throughout every stage of our lives! 

What is Financial Literacy and Why is it So Important?

Financial literacy is the ability to understand and effectively use various financial skills to better personal finance, budgeting, and investing. Essentially, financial literacy is a strong foundation you build on your relationship with money and money habits. This is an ongoing process as you continue to learn through different points in your life. The earlier you start betting on your financial education, the better you will be later in life and when you retire. 

Stop waiting to prioritize your finances and start working on better habits to gain knowledge and improve all areas of finance, credit, and debt management to make financially responsible decisions—choices that are integral to our everyday lives. Evaluate your current financial situation, set goals, and learn something to become more financially aware and plan for your retirement. 

Ways to Improve Your Financial Literacy

Take this as a push to gain knowledge and financial growth. How can you improve your financial literacy? Here are some ideas: 

  • Seek financial knowledge
  • Subscribe to a financial newsletter 
  • Listen to financial podcasts
  • Join a financial club (investments, money management, money, financial literacy, etc.)
  • Read a personal finance book or blog
  • Speak with a financial advisor
  • Use social media to learn – join a finance group 
  • Make financial money moves (re-work your budget, open a savings account, open an investment account, put your money towards retirement, start an emergency fund, increase your retirement contribution) 
  • Consolidate high-interest debt
  • Make small changes in your spending habits; acknowledge bad habits and set goals to change them

How To Become Financially Aware of Retirement Planning

Money moves you make now will affect you later in life. Ultimately, saving for your retirement is securing your financial stability later in life. Here are the top tips to incorporate into your financial habits now to best save for your retirement: 

  • Focus on starting ASAP if you haven’t already
  • Contribute to your 401(k) routinely 
  • Open an IRA account
  • If you are 50 or older, take advantage of catch-up contributions
  • Create a spreadsheet to see where you are at and what you need to do to reach your retirement savings goal
  • Rein in your spending
  • Automate your savings

If you are looking to make good financial decisions and better your financial literacy, now is the perfect time to get started. Building a solid financial future is extremely important for where you are currently at in life and when you reach retirement. Take this time to reflect on your finances and educate yourself to make smart financial decisions and money moves – you will be extremely glad you did.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Money Mistakes to Avoid Around the Holidays

Money Mistakes to Avoid Around the Holidays

As the holiday season nears, it is important to make changes to efficiently budget for your expenses. Here are some holiday money mistakes to avoid this year, so you don’t have to start 2023 in financial regret!

1. Not Setting a Holiday Budget 

We’ve all been there and unfortunately have learned from our mistakes. Not setting a holiday budget will get you quick and set you back financially if you don’t better your budget. It is important to not only budget for gifts, but family events, holiday activities, supplies, and even décor. A $50 – $100 gift per person adds up fast – some of those people you’re closest to even potentially getting more than one gift. 

To overcome this, create a list of every person you need to get a gift for, as well as any grab bag/secret Santa gifts you know you’ll be partaking in. Next, set the maximum amount you will be spending. This is completely up to you, just be sure to be realistic with your amount accounting for gifts and such. After you set a maximum holiday budget, start allocating amounts to your categories, such as gifts, activities, hosting, supplies, etc. As you do this maybe you need to remove something or adjust your budget for that category. Jot down ideas you plan to get each person as soon as you can, so you have time to shop around for the best deal! 

Here are some common Christmas expense categories to consider: https://bit.ly/3OCxMb0

2. Not Saving Throughout the Year 

Not saving throughout the year will lead to stress, overspending, and a busted budget. To alleviate stress, start saving early by taking your budget and dividing it by the months you have until the holiday season. Doing this will ensure you are taking proper steps to reach that savings amount by the time the holiday expenses start rolling out. 

If you haven’t saved as much as you would like this year, don’t worry! What you can do is see what you have saved, available to add to your holiday fund, and make an automatic draft from your checking account to your designated savings – possibly more than before to reach your savings goal.

3. Splurging too Much on Yourself

As much as you’d like to, don’t splurge too much on yourself leading up to this holiday season. Many people end up buying themselves something for Christmas and that’s completely ok! After spending money on friends and family, we all tend to find items we’d like or would like a little spoiling ourselves. 

If you are thinking of buying yourself a gift this holiday season, here are a few pointers to be positive your budget is on track first. 

  • If you see something you like, don’t make a purchasing decision for at least seven days. In most cases, you’ll find that your desire for that thing has gone away.
  • Make an honest assessment of whether you can afford the item and how it will affect your next purchases and expenses. This purchase should not set you back!
  • Set up savings to save up for this purchase. Wait to get it until you reach your goal. 
  • Wait until after the holidays. Save up gift cards and cash earned to put towards it. 

4. Don’t Spend on Every “Good Deal”

Sales are all over during the holiday season, but it’s important to not jump at every sale you see. Even though you see a deal it is still costing you money. Before you are sold on a sale item, ask yourself these questions: 

  1. If this item wasn’t on sale, would you still want it?
  2. What will you be using it for? 
  3. How will you pay for it? Does it fit in your budget?
  4. Is there a better item to get or better use for your money? 

5.    Not Remembering Your Long-Term Financial Goals 

Remember, the holidays are not meant to be all about money. Focus on spending time with friends and family, creating core memories. No gift is worth derailing your long-term financial goals. It is important to remember your long-term goals outside of the holidays as well as what is to come in the upcoming months. Though you may feel it is ok to splurge here and there, it is important you keep your financial stability and goals in mind with each and every purchase. 

Stick to your budget this holiday season by not making any of these mistakes! If you haven’t worked through your holiday budget and started saving, here is your push to start now. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender