Category: Save Money

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

employed

3 Keys to Managing Your Money When You’re Self-Employed

If you’re similar to 10 percent of the active American workforce, you are self-employed. Those who enjoy going into business for themselves find a great degree of freedom and empowerment. You have more value for your work, no uniforms, get to choose your customers, not to mention unlimited vacation days. However, these benefits can be quickly overshadowed by the effects of poor money management. In order to make your dream successful, there are certain key habits and skills you should have or develop in order to help your business thrive.

Organization

You may have already thought about the most exciting aspects of your new business such as the products you are selling and your logos. However, in order to keep the things you are passionate about alive, you need to keep your finances highly organized.

Taxes – Many self-employed people forget about Uncle Sam until they are hit with a shocking letter. Unlike the days when your employer would automatically deduct taxes from your paycheck, you will need to do this all yourself. This should take priority over everything else because the costs of not doing so can shut you down. Keep in mind that you may need to pay an additional 15 percent self-employment tax in addition to your regular income taxes.

Budget – In addition to a personal budget, you need to create a business budget to allocate expenses like postage, childcare or insurance. Calculate the basics of that you will need to make ends meet. Decide what salary you are going to pay yourself every month. These are the items that many forget about that could cause your business to fail. Decide what percentage you are going to spend on what categories each month and stick to them.

Tracking Expenses – It may be easy to dismiss a small business lunch here and there, but not having a system of tracking can severely disrupt your budget.

Open Separate Accounts – We can’t stress the importance of this enough, but the secret to staying organized and on track is having your business accounts separate from your personal accounts. You can create an account where you put a percentage of your income in just for taxes so you never have to sweat when the quarterly taxes become due. Come see us at Peoples Bank & Trust to look at our business account options.

Plan Ahead

While there are many items to stay on top of for your business, you shouldn’t neglect your own goals for the future such as retirement or emergency savings. While it may be great you are your own boss, you no longer have the matching 401k contributions that many employees receive as benefits. This means you will have to make it even more of a priority to save for your post-work life.

Self-Control

There may be some months where you make double or even triple the amount of profit you had estimated. When this happens, take out the same amount that you always do towards the items in your budget and anything extra put into the Emergency Fund.  We recommend doing this in percentages, so no matter if you make a lot or a little you are still funneling money into every priority you have.

On months when you don’t make as much money or even if you make no revenue, you’ll be thankful that you saved your profits from the high income months. Eventually, you should aim to hit the point where you can go 3-6 months without a salary because you have built up a significant savings. This takes diligence and self-control. It takes doing the little things right, every month.

Adopting these key habits into your business plan is going to set you up for success, so you can focus and enjoy the fruits of your labor.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

polite

Is Politeness Costing You Money? 6 Money Manners to Quit Now

“Politeness costs nothing and gains everything,” said Lady Mary Wortley Montagu. Many have been told or even repeated this saying. However, does it hold true? Not when it comes to these manners with money. There may be some moves you are making, or have been taught to make from a young age that can cost you more than what you intended, for little social benefits. Here’s the top 6, and how to avoid them!

  1. Not Asking for Your Money Back

If you are dealing with a retail situation where you were either charged more than you agreed to, or were the recipient of a faulty product, being assertive over being overly polite is what is going to help make things right.  According to a Marchex study, 79% of callers are polite, but only 57% of agents show the same courtesy. If the representatives are not likely to be polite with you, certainly don’t be overly polite by giving up getting your money back. Definitely still be respectful, but stay firm to get what is owed to you!

It can get even more sticky when it comes to your relationships, if you lent money to a friend (see #3). If you did break the rule and loaned money, don’t be afraid to ask for your money back if they already agreed to do so at the start.

  1. Always Chipping into Group Gifts

If it seems like you are giving money as a part of office birthday gifts or other social group gifts, know that you don’t have to participate! Be creative and try to find other ways to celebrate the individual or ways to cut down on the amount contributed. Maybe you celebrate all of the birthdays once a month, instead of every week!

  1. Loaning Money to Friends and Family

If you have certain friends who think you have extra to spare, you may find them consistently asking you for interest-free loans of varying amounts, because 1) you always say yes 2) they know you won’t hound them about repayment. It can be compelling to say yes to those you love, but in addition to jeopardizing the relationship, you are much less likely to get your money back from those you know. It can sacrifice your own security, and in some situations, enable them to make poor money decisions. Having this as an always “no” will prevent people from asking, and get you off the hook!

  1. Participating in EVERY fundraiser

So your best friend’s cousin’s child is having another cookie fundraiser along with 5 other coworker’s children. Trying to be polite by buying from everyone gives you items you don’t need that should be invested somewhere else. There are many things that we pay for because we have been told we are “supposed to” even though we can’t afford them.  These small yes’s can really add up! Next time, work on the amount you are wanting to donate into your budget, so you know what you can afford and what you can’t. When it’s gone, it’s gone!

  1. Eating Out With Friends Every Week: Splitting the Bill

Of course you love getting a bite with friends, but eating out is expensive! Maybe you say yes so you won’t get left out, or so nobody will feel snubbed. It can become even more problematic if your politeness keeps you from saying no when your group wants to split the bill evenly, even though you only ordered a side salad while the rest ordered appetizers, drinks and dessert. Let your friends know ahead of time that your entertainment budget only allots a certain amount, so you will be limited to the number of times you will go out, and that you will be paying for only what you order.

  1. Not Asking for That Raise

If you aren’t asking for a raise at work, for fear of damaging a working relationship, you are hurting yourself and wealth extensively. Continually shying away from asking for extras will put you more and more behind of where you want to be and should be. Do you know who gets extra perks and bonuses? The people who ask for them! Make a list of why you have earned what you are asking for, and be sure to ask for it at least once a year! You may not get everything you ask for, but a good employer will work with you to not lose a confident and respectful employee.

Politeness is a valuable trait in many situations, but knowing when manners are hurting your pocketbook is key to accruing wealth for your future.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

habit

How to Stay in Debt – Crushing Habits

Nobody wants to be consumed with worrying about their finances. Debt for most people is a fact of life. Unless you have a stroke of luck with the lottery, or a Daddy Warbucks, you are probably unable to pay cash for life’s most important purchases: a car, house or your college education. The goal with debt is to take on good debt that will provide opportunities and income advancement. Bad debt is purchasing items with no return on your investment, with their value quickly depleting.

Bad debt is associated with stress, financial insecurity and depression. Even a few months of poor decision making can straddle you from upward mobility for a long time. If you are looking to stay in this zone for years to come, we have delivered a list of habits those succumbed to debt do daily!

Thinking Money is the Problem

The financially insecure think that the reason they have so many problems with money is because they simply don’t make enough. It’s their employer’s fault. It’s their spouse’s fault. They don’t realize that whether or not they make $20k a year or 200k, they will forever be in debt if they don’t begin to take charge of their finances.

Tossing the Unopened Mail

The deeply indebted feel too overwhelmed or bored to read their credit card and checking statements. By doing this, they stay in a fantasy world where they spend more money than they have.

No “Uh-Oh” Fund

A great way to get yourself into unhealthy debt is by not establishing an emergency fund. If you lose your job or need a new transmission on your car, you may need to go further into debt just to get through the tough situation.

Treating Yourself (Daily)

While splurging on yourself happens to the best of us, it becomes a major problem if these impulses snowball into unnecessary debt, dinners and belongings you do not need.

Life Style Inflation

One of the biggest problems with Americans is the Life Style Creep. As their income increases with time, so does their spending. This inevitably leads to never really gaining wealth, because it is spent, spent, spent. Big debtors love those raises and can’t wait to spend them on more items they do not need.

Thinking Budgets Are for Poor People

This couldn’t be further from the truth, as those who are wise with their money have a budget that they stick to. Not having a budget is a plan to overspend and never truly understand your finances.

If you are looking to stay in debt long term, follow these habits. If not, run from these patterns and seek guidance from Peoples Bank & Trust!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS# #407724

rent

Considerations of Renting Vs. Buying in Retirement

Congratulations, you have made it to retirement or are close to being in your Golden Years! As you may be discovering, a successful retirement plan involves extensive planning and a lot of patience. Likely, one of the last and biggest decisions to make in your plan is deciding what living situation is most financially feasible.  While you may have invested in home ownership for many years, it may be time to downsize and your decision to rent or to buy your next space can have significant impact on your hard earned savings. Considering all the pros and cons of both will help aid you in your choice!

Buying

The perks of homeownership don’t necessarily change in retirement. In fact, the rate of homeownership for people age 65 and up has remained at about 80% since 2006. There are property and tax write offs, the potential for appreciation/equity and the power to make your place look exactly the way you wish.  However, your needs are changing and with that so will the benefits and disadvantages.

A question you need to ask yourself is whether you want to leave an inheritance with your home. If you are not, it might be better for you to choose renting, unless the median home price in your area is low. Don’t forget to factor in closing costs and taxes. Your home as an investment late in life can become less important. You should run the numbers in your desired living community.

The reality is, one of the major advantages of home ownership is building equity, which would require you living in the home for at least 5 years. Unfortunately, depending on health, living in the new home for 15 years may not be possible, especially if you need to move into assisted living sooner than expected. The bottom line with home ownership is that it would make the most financial sense to ensure that you are going to be in the house long term.

Renting

You may be of the belief that renting is primarily for the younger generation. However, from 2005 to 2015, the number of renters ages 60 to 64 nearly doubled, increasing from 1.2 million households to 2.5 million. The benefit that comes with renting is the flexibility that retirees have been looking forward to all of their working years. You can move as often as you like and have notably less responsibilities that your body may not be up for such as lawn care and basic home maintenance.

Estimate your cash flow needs and assess the relative costs of home prices and yearly rent for comparable properties. Would it make most financial sense for you to put the proceeds from selling your home into investments that you can use for renting? Don’t forget to consider that rental prices will increase.

You may be so accustomed to the idea of “owning” that the transition to renting might not be easy. If you are planning on moving away from where you have lived for years, starting fresh in a new community will be an adjustment, along with not being able to paint or make large changes to your home.

As with all major decisions, the right one will vary for each individual and location. At Peoples Bank & Trust, we would love to help offer some guidance in your financial decisions to make your Golden Years truly golden. Give us a call, or stop by today to see how we can help!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

NMLS# #407724

7 Ways to Get the Most Out of Your Tax Refund

tax

So you’ve either gotten, or are about to receive, your long awaited refund. There’s quite a buzz of excitement as many Americans decide what types of things they are going to buy with their extra cash. But if you are looking to do something different with your money this year, we have come up with some great ways for you to not spend away your money, but to get the very most out of it!

  1. Establish a Savings Account

We’re sure you’re not surprised with us telling you this, but pay yourself first! You have just given the government an interest-free loan, so immediately taking that back and putting it in a high interest savings account is a great option!

  1.   Keep Your Eye on the Prize: Retirement

Another wise move to make with this return is to invest the entire amount towards your future. If you get in the habit of doing this every year, think how large this amount can accumulate over time. Contact Peoples Bank & Trust to get an IRA started now.

  1. Grow your 9-1-1

You never know when a disaster can take a blow to your savings account, snowballing you into debt you didn’t plan for to cover emergency expenses like illness or car problems. Adding some extra cushion to your life is a way to keep you on top of your game.

  1. Grow Your Potential

This might be just the money motivation you needed to amp up your education! Get certified in a specialty area of your field, or attend a conference to network with other professionals. Many people don’t go back to school because of the costs, but this seed money could potentially help you to earn more in the future.

  1. Update Your Home

If you are looking to put your house on the market soon, a great investment would be to improve an area of your home that would give you a good return on your investment. Maybe this is updating the kitchen sink or redoing the bathroom floor. You may make your money back and then some if you do it yourself!

  1. Pay Down Your Debt

If you have gotten yourself in a bad spot when it comes to high interest debts, now might be the time to start paying those down. Getting those out of the way can make more room for savings and investments.

  1.  Invest in Your Emotional Health

Maybe it’s been a rough year for you, and you just need to getaway. Getting the most out of your return for you may be to take a vacation. You might want to just have the chance to restore and recalibrate your dreams and goals. Creating memories will last for years to come, and may be what you need in order to move forward this next year.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Can You Save on Groceries From Gardening? What You Should Know Before Digging In.

Gardening isn’t for everyone, but if you are looking for ways to cut down on one of your greatest expenditures, your own home garden might be a great place to start! You don’t need to be a Master Gardener to see returns on getting your hands dirty. However, it helps to know a thing or two before digging in!

Plan Your Space

Getting your garden started can require a large input of costs. While you may be excited to begin, you can easily end up upside down in this hobby by not planning your tools and the plants you need. The average gardener invests $70, so if you are just starting out, aim for even less. Start small.  Anybody can find room for a few plants, even if you live in an apartment, it just takes some creativity. Your goal should be to minimize costs and maximize yield. How wonderful would it be to only eat veggies grown by YOU?

Try to choose a location that has full sun and well drained soil. Use any of these garden planners to help figure out the layout of your plot. If you pick too large of a plot to fill, you may easily be overwhelmed and less likely to take great care of every vegetable. Efficiently use your garden space by succession planting or companion planning to get the most bang for your buck! You’ll have a variety of plants and waste less money running to the grocery store.

Pick Your Plants

One of the most important things you can do to make this a success is to plant vegetables that you actually like! Why spend your time and money on produce that won’t get eaten? Take a look at your grocery receipts. What veggies do you spend the most money on? Which items seem to cost the most? These are all questions you should take into consideration. Stick to mastering a few this season, and tackle more next year!

You can begin early in the spring by starting some seeds indoors – even herbs if you favor the delicious fragrance they offer. Plant cool season plants (carrots, beets, lettuce) early spring and warm season (squash, tomatoes, eggplant) after there is no chance of frost.

Preserve & Prosper!

If you’ve gardened correctly, you may have a higher yield than what you can consume. Congratulations! Some items, like potatoes and squash, can last a while if stored at the right temperature. However, other items such as beans, tomatoes, cucumber and even herbs can be canned or frozen to carry you through this winter. Once you get into the swing of things, you may hardly ever need to run to the store for your veggies. If you’ve planned, planted and preserved your produce correctly, you can have significant savings to your grocery bill – and a delicious BLT.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Love and Money: Five Common Mistakes

No couple likes to fight, especially when it comes to finances. Unfortunately, money is the leading cause of stress in relationships. And this isn’t only a problem for couples who are tight on money, as a survey has shown that the more your income increases, the more finances will put a strain on your relationships. What this shows is the importance of being on the same page as your partner when it comes to finances, no matter your incomes.

Peoples Bank & Trust has compiled a list of five common mistakes couples make with their money and how you can avoid them to lessen the stress on your relationship!

  1. Not Talking About Money Before Marriage

It’s important to have an idea of your future partner’s spending style. Is your partner tight with money because they grew up not having a lot? How does this impact how they envision your lifestyle once you are married? What’s their credit score?  It is important to have this conversation, in order to refrain from becoming upset or surprised when one of you splurges/invests. This keeps a nice checks and balances. Take this fantastic quiz to figure out your money type!

  1. Not Having a Budget

If you are too late to avoid mistake #1, this is the perfect time to have that conversation with your spouse. “Failing to plan is planning to fail.” Take stock of what you have coming in, what you owe and what you have for “extras.” This will help to prevent keeping secrets from each other about your spending, because everything is on the table.  Be sure the budget works for BOTH of you, long term.  You can even get your kids involved in order to teach them about money and why having a plan to stick to is important.

  1. Not Having Separate AND Joint Accounts

Are you a couple who only has a joint or separate account? We recommend both! Joint accounts make it easier to share in bills and debt together. However, it is still important to have your own account, so you can still feel autonomous in your decisions to splurge (within range of your budget).

  1. Waiting 30 Years to Pay off Your Mortgage

Just because it is an option, doesn’t mean you really need to take 30 years to pay off your debt! If you do take the full term to repay the debt, you will pay significantly more in interest. Every extra payment that you make towards your home will be applied to the principal balance. This will enable you to sign that last mortgage check much sooner, permitting you to put money toward retirement, or other goals you have together.

  1. Letting One Person Make Decisions

Even if only one of you is bringing in a salary, it is imperative that you are both involved in the financial decisions. If you have one person who is physically making the payments, you should both be reviewing your finances monthly, and making adjustments as needed. Friction can happen when one spouse makes the financial decisions causing the other to feel like a child with a set amount given to them each month. Even if one of you is more financially smart, both should be included in the decisions. There is less of a need to keep secrets from one another when you both have purchase power and communication about your short and long-term goals.

Making a plan and sticking to it together can help lessen financial stress in your relationship. If you feel stuck on where to begin, set up an appointment to speak with one of our specialists at Peoples Bank to help get you both on track to being in charge of your finances.

 

Fall and Winter Home Prep to Save You Money

Fall and Winter Home Prep

As the seasons change, so do your bills. However, finding new ways to save can be tricky when you’re already super savvy. By creating a good savings foundation during the fall and winter, you will be able to start 2018 off in a healthy financial state. That’s why Peoples Bank and Trust has compiled a list of tips and tricks to prepare your home for the seasons to come in order to save some cash!

Install energy-efficient windows

A low-emissivity glass also known as Low-E glass is used to help block the rays of the sun up to 90 percent, and keep the heat inside when it’s cold and outside when it’s hot. Energy Star estimates those who replace a single-pane window with an energy-efficient model will save $126-$465. Now multiply that times the number of windows you replace and you’re looking at quite the savings.

Lower water heating temperature

If you lower your water heating temperature, you will save 4-22 percent annually on your bill. Instead of allowing the water to get scalding hot, you can set it to only become warm which will increase your savings every time you shower, wash your hands, or do dishes.

Adjust the temperature

By turning back your thermostat by 7-10 degrees for 8 hours a day, you can save up to 10% each year on heating and cooling bills. Each time you raise your thermostat by one degree, your heating bill is raised by 3%, so it’s important to avoid that mistake.

Weather stripping

Thirty to 40 percent of your heating costs are lost to air leaks, according to Energy Star. That’s why it’s important to find where drafts are coming from in order to cover the leaks with weather stripping materials, which start off at around $5.

Replace light fixtures

If you replace your home’s five most frequently-used light fixtures or bulbs with energy efficient ones, you can save $75 a year. Just imagine if you did that with more bulbs! 

Fix leaking faucets

If you fix a leaky faucet, you will save $35 and 1,661 gallons of water if it drips one drip per second. Little things like a leaky faucet end up having a big impact on your bills over time, so be sure to check your nozzles.

We hope that these home hacks will help you save this fall, winter, and hopefully the seasons to come! Contact Peoples Bank & Trust if you have questions about what else you can do in order to grow your savings.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender