Category: Personal Finances

Money Savings Tips to Keep Your Finances On Track

saving

Does it seem like your savings plan always becomes derailed? Starting too big or having unrealistic goals can prove faulty. Once you do have some money saved, it may be difficult to know what to do with all of it – leaving you wondering where to go from there. Luckily, we have compiled a list of simple saving guidelines to keep your finances on track.

Stop spending money you don’t have.

This may be one of the hardest rules to follow. Even though that check is coming on Friday or you’ve been doing “so good” with savings, doesn’t mean you get to throw it all away. The money you accumulate all has a place it needs to go, so don’t convince yourself otherwise.

Use less than 30% of your income for your wants.

Wants include movies, shopping, restaurants and nights out on the town. While allowing yourself to have fun, you’re still able to save as you’ve put a 30% cap on your monthly limit.

Reevaluate all of your bills.

Be able to look through your bills and know if you’ve got the best deals. If you’re already getting the best prices, try to find places to cut expenses. Do you need cable or can you switch to a cheaper option? Is an unlimited data plan necessary or do you fall into a different category that may cost less?

50% of your income should go to necessities.

Groceries, housing, utilities, health insurance and your car payment all fall under necessities. Work on your budget to see how you can make these payments fit under your 50% cap. If you’re lucky and have some left over, put that towards an emergency fund or vacation fund. This will make you more motivated to meet these limits.

Create a budget and stick to it.

Creating a budget is easy – sticking to it is the tricky part. Be sure to make your budget realistic, which is why we mention the 30% of wants portion. You’re going to spend the money, so allocate for it. Downloading a budgeting app will also help remind you when you’re close to reaching your budget.

Set 20% of your income aside for financial priorities.

As the 50/30/20 budgeting rule goes, 20% of your income should go to savings. By auto transferring a portion of your paycheck straight into savings, you won’t even realize you have more money you could be spending! These savings could be used for a house down payment, tuition for a child or part of an emergency fund. When you put a name to your savings account, it will make it easier to save for.

Keeping your finances under control can be fun! Challenge yourself to see how long you can go meeting all of your budget goals. Find ways to skimp on expenses and become a super saver. If you’re looking for a place to store your savings, our accounts are a great option. Give our team a call at a location near you to set up a savings plan that fits your needs!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Why Choose a Local Bank?

local

Whether in bustling cities or the rural Midwest, community banks improve lives in the communities they serve. This seems to be a popular notion across the nation, as can be seen by their large local support. According to the ICBA, community banks make up 96 percent of all banking institutions in the country. They are successful because they work and are a positive light in the community.

You take great care when it comes to choosing a financial institution that you trust. If you haven’t made the switch to a local bank yet, here are just a few reasons why you may want to make the switch.

They support community organizations.

While we can’t speak for every community bank, we make it a priority to give back to the area. We realize the importance of donating to local charities and even encourage employees to volunteer to local regions of need. Every individual at every level of service in the bank is personally connected to the community and wants to see it thrive.

They have the same state of the art resources of big banks.

Some may think that community banks are still in the Stone Age when it comes to technology. This could not be further from the truth. We know that the future of banking is online and we have made it a priority to meet our customers in a way that is easiest for them.

Customers can access their account information, make deposits or withdrawals when the office is closed or if they are traveling out of the area. Although, we still love to see your smiling face in person when you have a chance to come into one of our locations.

In addition to being technologically up-to-date, we have competitive individual and business services that a big bank has to offer, but likely at a better rate.

They have a personal approach to lending.

Unlike big banks, we know our customers. Our kids might play baseball with yours or we may have even gone to high school together. Whatever the case, our approach to lending is more personal, because it is personal. We take a more rounded approach to lending instead of simply seeing you as a credit number like a large bank might do. We are here to serve the average Joe and play no favorites.

They maintain great customer service.

Community banking is about relationships. With that comes a customer service approach that is caring and helpful. You will likely see the same people working there every time you need assistance and can develop relationships. You are able to really feel like your bank is looking out for you because they know you and have your family’s best interests at heart.

They invest in the community.

Because they are a small business themselves, community banks value local businesses and understand the benefit they have on the economy. When you invest locally, the entire community prospers. We aren’t interested in siphoning out investments to Wall Street. Right here is where we want to be and see the area grow.

We can’t wait to meet you. Stop by our bank to see all the benefits our products can offer you!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

How to Save for A House Down Payment

down payment

If you’re looking to buy a house, having a larger down payment will offer you a lot less financial stress in the long run. However, in order to put a larger sum of money down, you will need to take the right steps to save. Follow these 5 steps and you will be on your way to being a first-time home owner!

Step 1: Figure out how much you will need to save – If possible, secure a number or range on the amount you can responsibly spend on a house. You can plan to sit down with a mortgage lender or use a home buying calculator to help figure out how much you can afford. With the use of a calculator, be sure to remember that it will not take in account every aspect of your financials.

Step 2: Find the best ways to save –  After you know an estimated range of how much you need to save, the next step is to figure out what expenses you can cut down – maybe skip vacations for year. The money you would spend on vacation can make a huge contribution toward a down payment. Next, take a look at your monthly expenses and see what you can reduce or eliminate; put that extra money into a down payment savings account. Lastly, work more. This may be easier said than done, but when there is opportunity to work an extra shift or add on hours, do it. Working more will be worth it when you are able to find your dream home!

Step 3: Transfer a fixed amount into a savings account each month – In addition to saving that extra money, set up a savings account specific for your house down payment. Then, with each paycheck you receive, have a certain amount automatically taken out each time and deposited into that savings account. That way it will remove any temptation to spend the money on other purchases. Before you know it, you will have enough money for a down payment.

Step 4: Leave room for flexibility in your savings – With all of this saving, it is equally important to leave room for flexibility. There will be other demands on your finances such as: car repairs, uncovered medical expenses or even loss of a job. You will need to be ready when and if these happen to occur – it is also helpful to create an emergency fund!

Step 5: Reduce your high interest rate debt – If you have high interest rates on your credit cards, it can painfully limit your ability to save. For this last step, do yourself a favor and pay off those high interest credit cards. Begin with your highest card and once that is paid off, close it and proceed to the next card. Lastly, transfer your credit card balances to the card with the lowest interest rate.

The process of buying a house can be very long and probably will require a big hunk of your savings. However, creating a larger sum for your down payment will sure be rewarding when you become a first-time home owner! Follow these 5 steps, and we can ensure much less stress in the long run.

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

FAQs about IRAs

ira

An IRA is an individual retirement account that is used as a tool for people to earn and earmark funds for retirement savings. Retirement may seem far away, but the earlier you start the save, the better off you’ll be! These accounts can hold more money than any other type of retirement account. You have flexibility when choosing investments and minimizing taxes, which means an IRA can play a huge role in how prepared you are for retirement. With that said, many people don’t fully understand how IRAs work; they can be confusing. As a result, there are many questions that arise when talking about IRAs.

Here are a few:

  1. What does an IRA earn? – In simple terms an IRA is just a trust that is established with certain tax rules. More specifically, it’s a security blanket for your money. At Peoples Bank & Trust, CD accounts can be IRAs.
  2. Who can open an IRA? – Anyone under the age of 70 who earns a taxable income can contribute to a traditional IRA. Roth IRAs, however, have additional income restrictions.
  3. How do I open an IRA? – You can choose where to open an IRA, if you don’t already have an employer-sponsored retirement plan. Often you can go to banks, credit unions, brokerage firms and mutual fund companies. It never hurts to do more research and ask questions!
  4. Am I able to contribute to someone else’s IRA? – Yes, but only if it is your spouse and if you file a joint tax return.

IRAs can be a tricky subject, but hopefully with the answers to these frequently asked questions we were able to help you with some beginner’s knowledge. If you have more questions or are wanting to set up an IRA, Peoples Bank & Trust would be happy to help. Contacts us today!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

How to Save for Retirement

retirement

Bankrate estimates that half of the American population won’t be able to maintain their standard of living once they stop working. While your current bills and loans seem like a top priority, we also don’t want you to forget about what the future holds. It’s important to keep paying off your debt, however, Peoples Bank & Trust wants to offer you a few helpful tips on how to save for retirement.

Direct Deposit

Having money directly put into an IRA or savings account is a smart way to save. This will help you get used to living at a certain income level. When the money from your paycheck is taken out right away, you never have the option to spend it – this means you were never used to having an extra amount of cash. As time goes on and you begin to pay off your debts, you have the option to enlarge the amount that you directly deposit into your retirement fund!

CD & Savings

Putting money into different CDs or a special savings account can help increase your quality of life when retirement comes. Having a place with extra funds will create a greater cushion if expenses rise. Having an accessible place where you can get liquid cash is always a safe idea. These accounts will never lose money and usually don’t come with penalties if you decide to withdraw your money early.

IRA

You can defer paying income tax on up to $5,500 that you contribute to an IRA. Couples can contribute to IRAs in each other’s’ names and can shop around for accounts and funds that charge especially low fees. An IRA is easy to open and gives you the option on how you want to invest your money.

Tax Refund

Every time you get money back from your taxes, put that into a savings account or CD. That extra money can add up over the years, so you’ll be happy to see how much your retirement funds have grown when you look. IRS Form 8888 allows you to directly deposit your tax refund into up to three different saving or investment accounts, including an IRA.

Small Business Investment

Finding a business to invest in and make a return on is an option for saving. Use your time before retirement to find different ways to make money for it. You don’t have to become a business owner – just a silent investor if you’d like. Small business profits are not capped and the potential return on investment is therefore higher than other alternatives, but remember that the risk can be higher too.

Stay focused on your retirement savings goal so you can be prepared as you get closer to that age. The above items are all safe and simple ways to save for your future. Utilize one of a few of these options today by stopping by our bank! We’d be happy to talk you through what we have to offer!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

The Expert Saver’s Financial Bucket List

bucket

Savvy savers are full of great ideas and qualities, so those who aren’t the best at keeping our finances in check are always left wondering how they do it. Thankfully, Peoples Bank & Trust Co. offers a bucket list with some of the expert saver’s top priorities you can strive to meet!

Pay off your credit card debt.

As the average American has $16,000 worth of credit card debt, focusing on paying off yours can be a big financial undertaking. There are different methods you can utilize such as The Snowball Method, which includes making minimum payments on all your accounts and putting what you have left towards the account with the smallest balance. The Avalanche Method involves paying off the largest amount of debt first and continuing on until everything has been paid.

Say goodbye to student loans.

Student loans can be one of the longest standing debts in many households. With the average outstanding loan balance being at $37,000, starting a routine to pay off these loans should be a top priority. By committing to a certain amount each month to pay, you’ll see your loans decrease quickly. Be sure to put extra cash towards the loans with the highest interest rates or try to refinance to a lower interest rate.

Buy a home.

Being a homeowner is a big step to take in life but well worth it. In some areas, buying a home and paying your mortgage each month can be cheaper than paying rent. Figuring out how much home you can afford and getting pre-approved are your first steps to financial success. A rule of thumb can be to take your monthly after-tax income, subtract all current debt payments and then multiply that number by 25%. This is a good indicator of how large your monthly payment can be.

Set up an emergency fund.

It’s sad to say, but bad things are bound to happen. Instead of being caught off guard when a pipe bursts or you need an emergency surgery, build an emergency fund. Having money put aside for the unexpected will help life be much more enjoyable when problems arise. Depending on your income, monthly costs and lifestyle, try to have between three and nine months’ worth of expenses saved in your emergency fund. See about setting up a savings account with us for items just like this!

Get a raise.

Negotiating for a raise can be tricky, but you won’t be able to move forward financially if you don’t push for what you deserve. Focus on all of the benefits you have brought to the company and changes you’ve made for the better. However, don’t expect more than a 4-5% bump, as asking for too much can be viewed as greedy.

This bucket list is what all expert savers strive for as an end goal. Put into action a few of these tips to allow yourself the monetary success you deserve! Feel free to give us a call or stop in to discuss our different savings options!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

The Brief Beginner’s Guide to Boosting Your Car’s Value

car

Your car is your baby, but have you really been treating it as well as you should? If you’re in the market for a new vehicle or just looking to make your automobile look its best, then you’ve come to the right place! Peoples Bank & Trust Co. offers wonderful ways to boost your car’s value on the inside and out.

Shine Bright

Dull headlights seem to be a recurring problem with cars. Luckily, there are many cheap products you can purchase to make those lights shine bright again. By giving your car a little love, it’ll look years newer. This means you can ask more for your fresh vehicle if you’re looking to sell.

Fancy Floors

Buying new floor mats or paying to have them cleaned can make all the difference in the world. You can also invest in the heavy duty rubber mats, so stains will be a thing of the past. Freshening up your interior will make your ride feel new and improved.

Quick Fixes

Any little issues that can be improved will help heighten your car’s value. Replace a burned out taillight, change the oil, make sure no warning lights are flashing and so on. If you’re looking to sell, this will be a big attraction to the next guy who will feel like no work will have to be done after buying. People are willing to spend more in order to start fresh with no troubles ahead.

New Shoes

Replace your car’s tires to give it the update it needs. Buyers will be willing to pay more if they know they won’t have to be buying new tires right off the bat. The buyer will often expect a significant discount ($300-$700), depending on the model, if the tires are old and worn.

Scratches and Dents

Don’t think fixing a dent or scratch won’t do you any good. Paying a little now to buff out that scratch and pop out the dent will make your car much more valuable. Just one or two dents/scratches can mean the difference of a fair payout or big bucks. A paintless dent repair specialist can usually buff out the issue for a small price, leaving your potential buyer willing to pay more since you’re saving them the headache of going to a body shop.

If you’re looking to make your current car last longer or sell it for top-dollar, use these simple strategies. Giving your baby the attention and love it deserves will help stretch its value higher. If you’re looking to buy, give us a call – we offer great auto loans to help you buy the vehicle you want!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

5 Things to Teach Your Teens About Financial Literacy

finances

With your babies growing up, it’s never too soon to start teaching them the art of being fiscally responsible – but where do you start? According to the Council for Economic Education, only 17 U.S. states require high school students to take a personal finance class in order to graduate. Peoples Bank & Trust offers some great ideas on how you can begin teaching your child about financial literacy.

How does credit work?

A lot of kids don’t know what credit actually means. It’s important to teach your child that credit means to borrow, but at a cost. You will need to explain the importance of a credit card and how keeping balances low are a good plan of action. You can also begin to discuss interest rates, annual fees and how they can check their credit report.

Everyone has to pay taxes.

Starting a lawn mowing business or babysitting will not be the same pay as when your child gets an actual job. If your daughter gets paid $12 an hour to babysit, she gets to take all of that home. Emphasize that she will have to pay taxes and talk about how some of that would be taken out to fix roads. This will prepare them for the future, so they can budget responsibly when waiting on that first paycheck. Since 2016, no state has added a personal finance course to their K – 12 grades. It is up to you to advocate for your child and make sure they understand all things financial.

What is a want vs. a need?

We all want the next cute pair of shoes or cool car, but we need to be realistic with our spending. Start making your child pay for gas, a portion of groceries and other little expenses. This will help show them what types of things they need money for, what portion should be put into savings and what is left can be spent on what they want – after their needs are secured.

You must budget to buy.

Start by having your child put aside 30% of their money for short-term savings and 30% for long-term. Another 30% can be cash they spend on whatever they need, and 10% could be put towards charity or another good cause to teach them giving back. Explaining to your kid what to do with money once it’s earned is commonly a missed step, so this will help you implement good habits.

How do I plan for college?

Begin going over different loan options such as federal and private loans. Explain how they can have an auto-pay set up to pay their bills on time. Seeking out scholarships is also an important point to place in their head. The average student loan balance is $34,144 as of 2017, so they can save a lot of money by getting a scholarship.

Preparing your child for the future is quite the undertaking – especially when it deals with covering topics such as finance. However, your child will thank you when they have fantastic budgeting and savings skills down the road! If your child is interested in opening a savings or checking account, give us a call! We’d love to help teach them other financial literacy topics.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

home

So You’ve Bought Your First Home: Savings 101

Congratulations! You’ve taken a big step in your financial future by purchasing your first home. As a new homeowner, you may be worried about the chunk of change you just spent, and your bank account may be looking a little slim right now. Luckily, Peoples Bank & Trust is here with a few simple saving solutions to help your funds increase.

Slow Your Spending

As you have just made a big dent in your savings, now is the time to slow down on your purchasing behavior. Be sure to be aware of your spending habits. Don’t go shop for an extra pair of shoes or dine out multiple times a week, as that can add up in a hurry!

Revamp Your Emergency Fund

A bigger house means bigger emergency expenses. Put a little extra money here and there into your emergency fund to save up for problems such as needing a new roof, replacing a broken appliance or common plumbing issues. Being prepared means your bank account will take less of a hit since you have your emergency fund to fall back on.

Stretch Your Grocery Dollars

Eating out can cost you a fortune! According to the Bureau of Labor Statistics, the average household spends an average of $3,008 per year on dining out. Instead, find discount grocery stores such as ALDI in order to meet your budget. Setting a budget and only buying items you truly need will help stretch your money. Finding recipes for casseroles, soups and other large portion meals will help save money by creating leftovers for you to bring as lunch every day to work.

Don’t Buy New Furniture

Even though you’re excited and want to decorate your new home to the extreme, try to wait. Slowing down and taking the time to find second hand stores, garage sales and so on will help save you hundreds to thousands of dollars on furniture. It’s easy to do a little digging and find store-quality items.

Clean Out the Closet

As you’re already packing to move into your new home, now is the time to get rid of items you no longer need. Facebook Marketplace, Ebay and other online platforms allow you to easily sell items to others all over the world! Not only are you freeing up space in your new home, you’re making a few extra bucks along the way!

Being a homeowner is an exciting new journey, but keeping up with your finances can be a little hectic. These tips will help you put a few more dollars in your bank account while enjoying the joys of your new home!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

adult

How to Adult: Financial Starters

It’s been said that youth is wasted on the young, but let’s not let that be true of those of you who are fresh into the adult world. We get it, many adults feel underprepared and overwhelmed at the amount of responsibilities that snowball after college or high school. Don’t fret! The fact that you are even taking the time to read this says that you are going to be okay. We have compiled a list of basic adult financial musts that will help you navigate this new terrain.

Build a Basic Budget

Many who have been in the adult world for years still do not have this down. Training yourself to say no to the short lived pleasures will translate to accomplishing your goals faster in the financial world and in other aspects of your life. You may finally be out of school and making a consistent income. This is exciting and scary as you see that the longer you are in adult world, the more expenses you have. This is why keeping a budget is crucial.

There are many different ways to budget, but one of the simplified ways is to break down your take home (net) pay and divide it by percentages. Dedicate 50 percent towards your living expenses such as rent, insurance and food. Allocate 20 percent towards savings and 30 percent towards good ole’ guilt free fun. This will help to ensure you are covering all of your bases no matter what your salary increases to.

Protect Yourself

While there are many new expenses being thrown at you, one crucial payment you can’t forget to make is that of insurance. Making sure you have quality auto, home and life insurance will help to provide cushion from a setback that could put you in the whole for years to come.

Automate it!

We already mentioned allotting room for savings in your budget and the easiest way to do this is to take the decision making out of the equation. Make savings automatically come out of your paycheck, and not only will you start building up an emergency savings, which is a crucial first step, but you will quickly accumulate savings for fun things like vacations or a down payment on a house. You’ll be surprised how fast it adds up!

Educate Yourself

Just because you’re out of the schoolhouse doesn’t mean you should stop learning about the less exciting topics like finance. Take time to read influential financial books, talk to a trusted banking partner, or to a friend or family member whose financial habits you admire. Do you really have a grasp on what credit means and how to best use it? Simply ask and seek for answers, and no, we don’t mean just Googling your questions. The financial world doesn’t have to be intimidating, just start digging in!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender