Nerdwallet states, “A financial plan is a comprehensive picture of your current finances, your financial goals and any strategies you’ve set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.” But where do you start? We’re here to help give you the basics of financial planning so you can begin improving your financial future. 

What are your goals? 

Where do you want to be 5, 10, 20 years from now? Think about how many kids you plan on having, where you’ll be living, the job you’ll be at and so on to realize where your financials should be. How much money would you like to have in your savings account, retirement fund and emergency fund. If you plan on paying for your kid’s college or daughter’s wedding is also a goal to mark down because that’s another area you’ll need to save for. Get really specific so you are able to identity and prioritize all goals you have. 

Where are you currently at? 

Now it’s time to take a close look at your monthly budget, current debt and savings along with thinking about how that will change in the future. Make a list of all your assets – things like bank and investment accounts, real estate and valuable personal property. Now make a list of all your debts: mortgage, credit cards, student loans and so on. You’ll be able to see where the money is at and where you need to work on things. Be sure to really nail down your budget as well, because you want to make sure you’re not overspending each month. 

What does your insurance and estate plan look like? 

You will want to make sure you are covered correctly to protect yourself in the future. Life/health, car, business and personal insurance are all things you’ll need to go over. Make sure you ask around to get the best deals without sacrificing the quality of coverage you will receive. You will also want to create an estate plan if you haven’t already. This helps lay out who makes financial and healthcare decisions for you if you can’t make them yourself. Make sure beneficiaries on your bank and retirement accounts are updated, so your family can have easy access if something were to happen. 

How will you reach those goals? 

This is where you’ll need to stick to your finalized budget, pay everything on time and start saving for all of your goals. Work on paying off your smallest debt first and once that’s done, pay off the next smallest debt – all while making minimum payments on your other debts. This will help you lessen your monthly costs over time to help allow for that money to now go into a retirement or college fund. Working with a financial advisor to help you along the way is a good idea. Think about bigger ways to save – for example, with home rates so low, you could also think about refinancing your home as that could help save on your monthly costs as well. 

If you’ve enjoyed these first steps to financial planning, feel free to contact us with more questions or speak to a financial planner to learn more about how to get where you want to be. We wish you luck on your future endeavors!  

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Its Spring! With the new season comes a new energy and attitude which we want to take full advantage of! Over the last year and this winter, it’s been easy to get into a financial rut or overspend on subscriptions which is why it’s time to purge your finances. Keep reading to see our top tips to help you spring clean your finances! 

Sweep Away Subscriptions 

You’ve heard this before, but it becomes easy for subscriptions to build up over time. Maybe you’ve accumulated multiple streaming services but now things are picking up, so you don’t need them all. You could have been offered a free trial that has turned into an actual subscription now or you may have signed up for a monthly plan that charges you for something you could buy yourself for cheaper at the store – all of these are good to cancel and help lessen your monthly expenditures.  

Buff Your Budget 

After the holidays and last year, your budget may have taken a backseat. It’s time to dust off that budget and take a look at your expenses each month. See what it looks like after canceling a few subscriptions and get back into the routine of following it. There are apps that can help you track what you spend to allow you an easier way to stay on top of things. 

Deep Clean Debt 

Now is the time to look at your different debts such as credit cards, mortgage, student loans, etc. See what seems the most practical to work on paying off first. Your credit card may be the best place to start – while still making minimum payments on other debts, pay a little extra if you can afford it to your smallest debt. Once that’s paid off, continue doing the same for the next debt. 

Declutter Old Accounts 

You or a significant other may have an old 401k or HSA from a past job. Be sure to get everything transferred into a new account, so you are actually being proactive with that money. You may also have an old savings account from a different bank that you need to switch over. All of these items are important to keep track of and get moved and closed. 

Restore Your Retirement 

Even though retirement is far away, it’s important to save for that now. Open a retirement account such as a 401k with your company as well as a CD or IRA with your bank. Just think about not working once you’re older and all the expenses you’ll still need to pay for – that money you start saving now will come in handy then. 

Tidy Up the Emergency Fund 

You may have dipped into your emergency fund over the past year, so be sure to work on building that back up. Open a savings account with us to store your money so it’s ready when you need it most. When you are creating your budget, you’ll see how much money you can afford to put away in your emergency fund each month. 

We hope these tips give you a few things to focus on this season, so you can get back on track with your finances. If you need a safe place to store your money, build retirement or take out a loan, Peoples Bank & Trust is here to help! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

We may all think we know a thing or two about finances, but do we really know it all? There’s always more you can learn to better yourself and that includes money management skills. Today, we’ll give you five challenges to test your money management in order to whip your finances into shape! 

1. No Spend Challenge 

We know this sounds scary, but you can still buy groceries and pay your recurring bills. Try not spending money on any unnecessary items for one week or one month. Yes, we know that coffee may feel necessary, but make your coffee at home instead of buying it. You’ll be surprised at how much you save when you don’t buy an extra item here and there. 

2. Change Challenge 

Any change you accumulate, save. This could be a fun game to play with your kids as well. You and your significant other can give any change from the day and have your children count it and put it in a jar. Do this for one month or a full year to see how much you accumulate!  

3. No Online Shopping Challenge 

We know that more shopping is being done online now than ever before, which makes it seem easier and easier to spend more money since you aren’t giving physical cash away. Try not buying anything online for a whole month – besides your groceries and essentials if you now purchase those online. 

4. 52-Week Money Challenge 

This is a fun one! This occurs weekly for a whole year, so it will really hold you accountable. Start with saving $1 for week 1, $2 for week 2, and so on. By week 52, you’ll be putting away $52. The 52-week challenge adds up to saving a total of $1,378! You can choose what you’ll spend that money on if you make it all the way. Will it be for a vacation, child’s college fund or emergency fund? It’ll be up to you. 

5. No Eating Out Challenge 

Since people are staying home more, this is a little easier than before. But this also includes take out and drive-throughs as well – not just sit-down restaurants. We know supporting small businesses is important, so we’re not saying don’t eat out forever. Just try it for one month to see how much potential savings you earn. 

Pick one or a couple of these challenges to test your money management skills. You won’t regret it! Then, store your new savings in a savings account with us. We’ll be happy to keep your hard-earned money safe and sound in an account. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

If you have a teenager who doesn’t quite understand how important good financial habits are, it’s time to teach them! Giving your child the building blocks on saving, budgeting and understanding debt will help make them into responsible adults. Here’s some financial literacy 101 for your teenager. 

Bank Accounts 

Explaining the different types of bank accounts to your child is crucial. Start by opening a savings account with them so they can understand the importance of saving. When they have a job, you could also work with them to open a checking account. This will help teach them the process of saving, spending money, using a debit card and writing checks. 

Credit Cards 

Even though your teen won’t have a credit card at that age, it’s important to teach them about credit cards and how they work. Explain the limits that are set, paying your minimum each month and how that will affect their credit score. This will help them be prepared for when they do get their first card. 

Debt 

Teach your teen that debt is no joke. There will be car payments, groceries, entertainment purchases, credit card bills, student loans and so on. Making sure they know not to bite off more than they can afford is extremely important. This will help them understand all of the bills they will have to afford in the future. 

Credit Score 

Start explaining what a credit score is and how that will help them get lower interest rates in the future. This can also tie into the credit card conversation. Understanding the basics of a credit score now will help keep them out of trouble in the future. 

Budget 

Understanding needs vs wants is a great life lesson. Start your teen off with budgeting by having them help with the grocery list. Tell them the rough prices of what things cost, have them make a list and keep it under a certain amount. This will help teach them how to budget, so they can apply it to other things in their life down the road. 

These basic items are critical for teens to understand. Looking back, you may realize you didn’t quite know all of these things when you were a teen. This is why we wanted to share this information, as we believe it’s a good thing to get ahead in the financial world with your child, so they are prepared. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Creating a basic monthly budget is simple, but breaking it down into categories and deciding what you should and shouldn’t spend money on can get tricky. That’s where the idea of wants vs needs comes into play, and it’s one of the most important steps in budgeting. Struggling to figure out what the difference is? We’ll explain! 

The Overall Difference Between Wants VS Needs 

Financial needs include purchases that are required or absolutely necessary. Financial wants, on the other hand, are things we desire or wish for but technically don’t need for well-being or survival. These are difficult to separate because they’re often different for each person.  

Examples of Needs 

We all have things we need to purchase in order to survive and continue working. These payments often take up a large portion of your paycheck and are recurring. This includes: 

• Food 
• Gas/Transportation 
• Insurance 
• Work uniform 
• Housing 
• Medication 
• Utilities 
• Healthcare 

Examples of Wants 

Along with the necessities come desirable things that allow you to live a more comfortable life. While you can live without them, the following things can bring you fun and joy: 

• Entertainment 
• Coffee shop visits 
• Gym membership 
• New clothes 
• Dining at a restaurant  
• Travel 
• Home décor  

Budgeting Your Wants & Needs 

One well-known budgeting system to follow is called the 50/30/20 rule. 50% of your income is spent on needs, 30% is spent on wants and 20% is put into your savings or paying off debt. This is a great system to go by because it allows you to satisfy your financial wants in modesty. Restricting yourself completely from your wants is unrealistic, so setting a concrete value to each of your budget categories keeps you from overspending. 

Just like most things in life, over time you will learn from mistakes and adjust your budget. Maybe you have a new want, like a gym membership, that you can swap out for an old want, such as TV subscriptions you don’t use very often. And while you make adjustments to your budget, our financial services are here to assist you along the way! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Parenting isn’t easy and it seems like there are endless lessons to teach your kids in order to fully prepare them for adulthood. Teaching your teenager about the importance of money management will have a lasting positive impact on their future. Here are five financial lessons you can implement into your parenting: 

Always Be Setting a Good Example 

It’s no secret that children learn by example and often take after their parents’ actions. One of the biggest impressions you can leave on your teenagers is to show them the right way to manage money. Be a good example for them by budgeting, identifying wants vs needs, contributing to your savings account and other smart financial choices. 

Avoid Impulse Buying at All Costs 

As your children enter their teenage years, it’s normal for them to want the latest technology or clothing to keep up with their peers. The worst thing you can do is buy them what they ask for on the spot, as this behavior encourages impulse buying. Instead, let them wait it out for a week or two then revisit the purchasing decision. 

Turn Their Free Time into a Part-Time Job 

While schoolwork, extra-curricular activities and social events can make high school a busy time of life, there’s a lot of extra free time than other stages of life. Between summer break, winter break and free weekends, part-time jobs are a great way to stay busy and make some extra cash. Encouraging your teenager to get a job will teach them life lessons like leadership, time management, responsibility, working with others and so much more. 

Help Them Open Their Own Bank Account 

Once your teenager is getting an income from their part-time job, they’ll need a place to put their money. Now’s the perfect time to help them open a bank account so they get used to having that responsibility. They can even begin contributing to a savings account down the line. 

Have Them Download a Budgeting App 

Teenagers love technology, so why not encourage financial education while they’re on their smartphone? There are tons of budgeting and money management apps out there. Once they are making an income from their part-time job, they’ll have to learn how to be smart with their spending. Apps like this can give them reminders, provide helpful tips and simplify their overall budgeting experience.  

The teenage years are packed full of important life lessons and including proper money management in those lessons is extremely important. For more information on all things finance or to learn about the services we offer, contact us today! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

We all make mistakes and experiencing financial hiccups is a normal part of life. With each month comes new financial temptations that can be difficult to turn from. The good news is you can learn from others’ mistakes to avoid making them yourself! Keep reading to learn some common money temptations most people run into as well as how you can avoid giving into them. 

Temptation #1: Spending Unexpected Cash 

Whether you received an unplanned bonus or just got your tax refund, it may be tempting to spend the extra money. Since it’s an addition to your normal income, technically spending it won’t hurt you, right? Think again – instead, deposit that extra cash into your savings account and put it towards your emergency fund.  

Temptation #2: Always Saying “Yes” 

FOMO is real and skipping a weekend out with your friends is a tough choice to make. While spending a budgeted amount on fun activities each month is completely allowed, it can be easy to get wrapped up into an outing every weekend. Be careful with what you say “yes” to, and maybe opt for a game night at home rather than an expensive restaurant or bar when you meet up with friends. 

Temptation #3: Leaning on Retail Therapy 

We all experience tough days, and a common form of therapy for many happens inside a store or online. Another name for this is emotional spending, as it can temporarily satisfy individuals or make them feel better, but this is a slippery slope. Some tips for avoiding emotional spending include: 

• Using the 48-hour rule before making a purchase 
• Understanding and knowing how to manage your triggers 
• Factoring shopping into your budget and sticking to it 
• Sticking to window shopping rather than making purchases 

Temptation #4: Falling for the Sale/Markdown Trap 

Coming across a never-before-seen deal is a great feeling, but realistically, there are deals going on all the time to entice customers into making unnecessary purchases. Think about it – if there’s a crazy good deal going on and you weren’t originally planning on making the purchase, odds are you don’t really need to buy that item. 

Temptation #5: Always Treating Others 

While being the one to cover the tab or buy your friend a nice gift is always a kind gesture, it can add up quickly. There’s nothing wrong with showing those you care about some love now and then, but make sure it’s factored into your budget and you’re not just spending to impress. 

Giving these temptations may provide you with momentary satisfaction but avoiding them altogether will be extremely beneficial long-term. The next time you’re faced with one of these temptations, think back to this blog and remember how thankful your future self will be if you saved the money! For more financial advice or to learn about the services we offer, contact us. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

With the flexibility and freedom of self-employment comes the tricky challenge of managing your finances properly. Whether you’re new to the freelancing field or already know your way around the ropes, a quick money refresher is always a good idea. Below are our top money management tips for the self-employed. 

Have a Plan 

Budgeting is just as important in your freelance business as it is in your personal life. This may be tricky with the inconsistencies in your income, but calculating an average monthly income and budgeting off that is helpful. Knowing how to budget will become easier the longer you are self-employed as it’s often easiest to learn from experience. 

Keep Records Organized 

Not only is it important for you to keep records of past paperwork, such as billing and sales history, but you should keep everything as orderly as possible. This will help you feel organized, plus when a previous customer has a question, you can easily refer back to their purchase. Keeping copies of receipts is also important for tax time. 

Set Goals for Yourself 

Being your own boss means not always having someone watching your progress and analyzing your work like most 9-5 jobs. In order for your business to grow financially, you need to set some short-term and long-term goals for yourself. Whether that’s selling a certain amount of your product or service, expanding on your product or service line or simply reaching more customers, create a SMART goal and do what you can to achieve it. 

Build on Your Emergency Fund 

Self-employment often means a varying monthly income. Because of this, having a solid emergency fund is crucial so you have a backup if things go south for a few months. Financial experts usually recommend having three-six months’ worth of living expenses saved up. Continue adding to your emergency fund each month for added peace of mind! 

Keep Personal and Business Finances Separate 

One of the keys to managing your money properly while being self-employed is having a separate business account. This will also help you keep a more detailed record of your finances for tax return purposes. 

Ask for Help 

The final, but one of the most important tips, is to accept help from others. One of the best ways to understand the ins and outs of self-employment is to reach out to an experienced individual in your shoes. If financial troubles progress, don’t hesitate to talk to a professional to see what your next steps should be. 

Self-employment, while it may pose its challenges, is ultimately a rewarding path to pursue for many. Having a financial plan and sticking to it is the key! We’re here to help you with all things finance, so if you have any questions feel free to contact us – we’re happy to help. 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender