Category: Savings

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

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

What Sports Can Teach Your Kids About Finances

kids

As a parent, you want to do your best to give your children a great childhood and prepare them to be successful, contributing members of society. One of the ways that many parents are doing this is by encouraging youth sports. They realize that there are great lessons learned from athletics like how to be a part of a team and physical health. It’s also a good way to get kids away from the screens! By the same token, you may not realize that sports, particularly pay to play, have additional benefits of teaching your children about money, if handled correctly.

Spending on youth sports has grown incredibly high. So high, in fact, that it has prevented many kids from being able to participate at all. It’s estimated that, spending has grown up to 10.5 percent of gross income.  While we certainly don’t recommend you sacrifice your retirement for your children to play, developing a spending plan within your budget, and including your children in the process will help them to understand that this does come at a cost. Yet, spending too much may have the reverse effect, putting extreme pressure on youth to perform worthy of the costs. It’s important to set boundaries, and stick to one or two sports. The more you involve kids in your finances, the more comfortable they will be with money in their adult life.

Earn

Most schools don’t teach financial literacy to minors, and even if they do, the national average of financial literacy is still at 59.6 percent. Instead of throwing money at the costs, have your children earn the money for participation or athletic gear. They could complete additional chores around the house, mow neighborhood lawns, or even help with training others younger than them. At any age, this is setting them up for the simple realization that things cost money, a concept muffled for many younger children.

Save

Encourage your children to save at least 15 percent of what they earn for next season, or incidentals. No matter what they are working for, it is incredibly important to teach them the habit of saving a portion of their earnings. This provides opportunities for them to understand spending on what you want now vs. what you may need in the future.

Give

Whether in time or their finances, helping your child understand that not every youth has the means to participate in pay to play sports, will be relatable to them in various ways later in life. If they would like to give a small percentage towards helping others pay for gear or participation it would be a relatable opportunity for them to understand how much meaning there is in giving. They could even give of their time to mentor others to help refine their skills.

In whatever way you want to teach your children about finances, getting the conversation started is the most important step for them being comfortable and competent with money!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

How to Financially Prepare for Natural Disasters

When it comes to preparing your finances for certain occasions, natural disasters usually aren’t one of the events that come to mind. However, not creating an emergency fund for the unexpected could hurt you immensely since Mother Nature doesn’t care whether you’re prepared or not. That’s why Peoples Bank & Trust has put together a few tips on how you can ready yourself for a natural disaster.

 

Make Your Fund a Priority

While some disasters come with a warning, others do not. If you try to prepare too quickly and scramble to figure out what the best strategy for saving your emergency fund is, things will fall apart. Adding to your fund by taking a little out of each paycheck will help you to begin saving quickly. For example, an emergency fund of $500 would be able to pay for a small family’s hotel, transportation, or food if a disaster occurred.

 

Have Cash On Hand

When being forced to evacuate, ATMs may be overrun or go down, meaning there is no way for you to get cash. Power can go out, leaving debit and credit cards useless. By having cash on hand, you will be able to know that you can purchase necessities when an event occurs.

 

Document

Be sure to have a fireproof and waterproof box with documents you will need to pick up the pieces after a disaster. You will need documents that have numbers and information to your bank, creditors, health insurance, and property insurance. By having your personal, legal, health, and financial documents together, moving through the disaster will be a much smoother process. Other documents to include would be passports, birth certificates, health records, social security cards, bank routing numbers, deeds, income tax information, and more.

 

Take Inventory

Be sure to take videos and photos of your belongings. Photograph the interior and exterior of your home along with your vehicle. By documenting all of your belongings and the state they were in, you can be sure that your insurance company won’t shortchange you.

We don’t ever hope a natural disaster will strike, but it’s better to be prepared if something does occur. By having some cash on hand when disaster strikes, you will have a foolproof plan to help aid in your recovery. Contact Peoples Bank & Trust to set up an emergency fund or to understand what more you can do in order to be prepared financially!

 

 

Top Five Savings Hacks

We all could stand to save a little more money. Whether it’s for an upcoming purchase, a rainy day fund or an emergency fund. Saving money is a skill that benefits you throughout your life. It’s not easy to save, but People’s Bank & Trust has some hacks that you can implement right away to start developing better habits.

Set a Budget

In order to know how much you can save, you need to know exactly how much you’re spending. Sit down and develop a monthly budget to track your necessary expenses versus your monthly income. Any remaining income can be put right into your savings account.

Give Yourself a Goal

It’s easier to put money away when you know what you’re saving for. Whether you’re saving for a vacation, a car or a down payment for a house, you’ll find more success with your saving efforts if you set a monthly goal.

Learn to Say No

Saving money means cutting back on unnecessary expenses so you can limit your spending. That means saying no to going out for dinner with friends, skipping that trip to the movies and spending more time at home where you can save money.

Stick to Cash

Instead of using your debit card to make every purchase, take out cash at the beginning of each week or pay period within your budgeted amount. Once you’ve gotten the cash, leave your debit card at home. You’ll be surprised how much more careful you are as you think about whether you really need to spend the cash.

Use Technology to Your Advantage

It’s easier now to save than ever before thanks to technological advances. Keep track of your account balances using People’s Bank & Trust online banking, or download a budgeting app to your smartphone to keep yourself honest as you save.

If you don’t have good saving habits right now, don’t worry. Everyone has to start somewhere and it’s never too late to start saving. If you want more help with managing your finances more effectively, please contact People’s Bank & Trust and our staff will be happy to help!

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

Money Advice Gone Wrong

Sometimes the best intentions can lend themselves to producing the worst results. While many friends and family members may offer quick solutions to your financial anguish, often times the best education is understanding those lessons first hand. At Peoples Bank & Trust Co., we’d like to showcase several of the most common pieces of advice we hear, and what you can do to remedy these particular miscommunications.

Bad Advice #1: You have to go to college to get a decent job.

While a college degree does open additional doors, it is not required for many well-paying jobs available around the nation. Social figures like Mike Rowe have made it their personal mission to spread the message that you can earn a living without having to sink into debt. Whether you’re interested in IT, manufacturing, grocery management, or other skilled work, you can find numerous positions through technical training or management programs, and avoid the majority of debt most four-year college students incur.

Bad Advice #2: Having debt is okay if you pay your minimum payments.

While it is important to make installments on your loans or debts, eliminating them all together should be the desired end goal. Did you know that when credit reporting companies review your credit score there are five factors considered? The two most important factors are your payment history and your debt to income ratio. If your monthly debt payments require more than 43 percent of your income, that may raise a flag to any future potential lenders.

Bad Advice #3: To build your credit score you need to purchase everything on your credit card.

While it certainly helps to have a long and healthy track record associated with your credit card usage, having an on time payment history is far more important. This payment history represents the largest factor of your credit score, which the reporting bureaus track. By never spending more than you have, you can make certain you are able to pay your bill in full each and every month. This action may have the potential to help foster growth for your credit score.

Bad Advice #4: Retirement savings can wait.

Contrary to what many young adults think, right now is the most important time to start saving for retirement. While later in life you might have more disposable income to save, you’ll also have less time before you need those funds. Once compound interest enters any equation, time becomes the most valuable commodity for growing your wealth. For instance, if you saved the Roth IRA maximum of $5,500/year starting at age 25, you’d have $1.17 Million by the time you’re 65. Who wouldn’t want to capitalize on those kinds of savings?

We think you can tackle any piece of advice with a few grains of salt. If you’re curious what your next financial move should be, stop by Peoples Bank & Trust Co. and speak to one of our dedicated personal bankers. Our team of financial experts is here to help you and your family succeed; get started today!

 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender