Tag Archives: money management

The Latte Factor 101

Money Management

Making your way through the drive thru every morning before 7:30 may give you a refreshing start to your day, but at what cost? The ideology that coffee shops and other retailers capitalize on is the notion that these small expenditures add a little excitement to your day without a hefty bill. However, when you enjoy perks like these on a daily basis, they add up, and quick!

Financial author, David Bach, is the mastermind behind the Latte Factor. This helpful calculator enables shoppers to see not only the cost of an individual purchase but the lost value it could cause for further investment as well.

For example:

If you purchase a $4.45 grande latte from Starbucks every weekday for the next thirty years, the total cost of your daily coffee is $34,786.29. However, if you had put that weekly $22.25 expenditure into an investment with an average earnings rate of eight percent or more, you could have made $109,225.02 in earned interest during that time. This showcases the true cost of a daily latte as the overall product expense ($34,786.29) + the lost interest ($109,225.02) = ($144,011.30)

While less than $5.00 a day may seem like chump change, compounding these expenses on a long-term level can showcase helpful savings opportunities to maximize your retirement savings efforts and limit unnecessary spending.

This equation doesn’t work just for coffee either! If you find yourself splurging for a fast-food lunch break, buying extra sodas at work, or even paying for a magazine you hardly read, you’ll soon find that all of those little expenses can make a big impact.

To help break some common splurging habits Peoples Bank & Trust recommends the following:

Before making a purchase, ask yourself, “Should I spend these funds or should I invest them?”
Use free services like our Online Banking to visualize your spending and see areas where you can cut excess.
Remember the rule of 7. On average, invested funds will double every seven years, without any added contributions.
Utilize accounts like IRA, HSA, and 401(k) to maximize the dollars you invest and save.

If you have any questions on how to get started, or want to learn more about how to make your money work for you, we’re are here to help. Just stop by or drop us a line.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Why Checking Your Credit Score Matters

Personal Finance

Across television ads, online banners, and even chit-chat among relatives, the phrase, “Check your credit score,” seems to be popping up everywhere. If something so important needs constant reminders, why does it have such a key importance in your personal finances? Well, the truth is that it doesn’t, your financial actions do.

A credit score is comprised of five different components which indicate how you as an individual are perceived in terms of repayment and risk. Individuals who pay their bills on time, have been responsibly utilizing loans and credit cards, and who don’t maintain too much debt typically have a higher score. While the score itself is seen by potential lenders as a positive or a negative, the true meaning it portrays is to showcase whether you as an individual are a promising person to repay any funds you are lent. This score can be changed for the better or the worse depending on the actions you take.

This is why checking the report itself can be beneficial for your personal financial reputation. By reviewing your history on a recurring basis you can quickly identify any mistakes or missed payments that need correcting and do so in a timely manner.

For those who do not check their score scenarios like the following could occur:

Say you accept a job in another town, and after moving, you realize you still need to forward your mail. After a week or two in the new place, you go online and make the switch. However, unbeknownst to you, there was one last utility bill that was mailed to your prior address after you moved away. Weeks go by, even months, only now you’re connected with a new utility company, and you have new bills to pay. Behind the scenes, however, your credit score could be declining, because that one last bill has now been reported to collections. Your credit history will now note that a payment has been missed, and the longer it is missed the more it could damage your credit score.

Situations like this happen to many Americans, and while sometimes they can’t be prevented, the damage they cause can be minimized by checking your credit score on a monthly basis. Instead of allowing a payment like this to retain a balance for over 120 days, you can catch it under 90 and minimize any potential negative effect on your score.

This is just one example in how checking your credit score can impact your financial health for the better. Other benefits include fraud prevention, better financial negotiation, and more accurate personal financial records.

Our team at Peoples Bank & Trust would be happy to walk you through the information from this service and is always available to answer any questions you may have.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

6 Ways to Win with Your Budget

Savings Tips

Do your savings goals make you feel frozen? Get back on the ice this season, and let Peoples Bank & Trust help you win your personal financial game. We’ll show you how to keep pushing forward with these strategic hockey tactics:

Find the 5-hole.

One of the first and most important ways to save is to keep your eyes open! Whether it’s taking advantage of grocery store specials, buying household items in bulk, or cutting spending from your monthly budget, the biggest opportunity you have while saving money is continually searching for new ways to save.

Complete the hat-trick.

Before you start saving for the short-term items, be sure you have the long-term set in place. Just as in hockey, there are three things you need, to make the best play of the game. Start by setting up an emergency savings account, to help guard your savings. Follow up by opening a personal retirement account such as IRA, to continually grow your savings. For the last trick of the play, we suggest creating a 529 or Coverdell account to help save for your child’s future education. These three accounts will help not only you score your savings goals but will assist you in winning your entire financial game as well.

Put your debt against the boards.

Show your debt whose boss, and push them against the glass. By aggressively paying off your outstanding debt, you make additional funds available to further your monthly savings. We recommend paying the minimum payment on each debt, and then using any surplus funds to add extra payments to help pay it off sooner. Once you have paid off a debt, use the funds from that allocation to help erase the next obstacle, one payment at a time.

Place your spending in the penalty box.

While working on your savings goals, look into your monthly spending to see where you can cut costs. Consider reducing your funds for eating out and entertainment. The extra money can go towards your debt, or once paid off, can help you achieve your savings goal sooner!

To help, there are some innovative apps available that can you visualize your various expenses.

Beat the buzzer.

Saving for retirement is a marathon, not a sprint. Like hockey, if you don’t play until the end, you may lose the game in the last five minutes. To help prevent this, we recommend working with a personal financial adviser, ensuring your funds are in the right place at the right time. If you make a pass and transfer them to stocks too late, you could lose money and valuable time. We suggest creating a strategic and well-coordinated retirement plan to make certain all your savings get time on the ice, and your key players continue to stay in the game.

Drop your gloves for additional fees.

Whether it’s big banks searching for unnecessary add-ons, or potential financial advisers looking for a percentage of earnings, don’t be afraid to negotiate fees you deem excessive. The business is certain to have referees to let you know if you’re asking too much. However, it never hurts to ask!

With our affordable deposit accounts and expert financial coaching, we look forward to helping you sink your upcoming goal in the back of the net! Stop by and meet our dedicated team today!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

6 Steps to Scoring Your Savings Goal

Savings Tips

Find the 5-hole.

Complete the hat-trick.

Before you start saving for the short-term items, be sure you have the long-term set in place. Just as in hockey, there are three things you need to make the best play of the game. Start by setting up an emergency savings account to help guard your savings. Follow up by opening a personal retirement account such as IRA to continually grow your savings. For the last trick of the play, we suggest creating a 529 or Coverdell account to help save for your child’s future education. These three accounts will help not only you score your savings goals but will assist you in winning your entire financial game as well.

Put your debt against the boards.

Place your spending in the penalty box.

To help, there are some innovative apps available that can you visualize your various expenses.

Beat the buzzer.

Saving for retirement is a marathon, not a sprint. Like hockey, if you don’t play until the end, you may lose the game in the last five minutes. To help prevent this, we recommend working with a personal financial advisor, ensuring your funds are in the right place at the right time. If you make a pass and transfer them to stocks too late, you could lose money and valuable time. We suggest creating a strategic and well-coordinated retirement plan to make certain all your savings get time on the ice, and your key players continue to stay in the game.

Drop your gloves for additional fees.

With our affordable deposit accounts and expert financial coaching, we look forward to helping you sink your upcoming goal in the back of the net! Stop by and meet our dedicated team today!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

What Your Teen Needs to Know About Money Management

Money Management

Throughout their teenage years, your children will begin to grow their personal money management style. Offer them some assistance by offering these four financial lessons from Peoples Bank & Trust.

Securing Their First Job

No matter if it’s babysitting, lifeguarding, or bagging groceries, there are plenty of employment options for eager high school students. These opportunities typically start at minimum wage with zero benefits, but offer a foundation of experience and learning. Talk with your son or daughter, and help them select positions to apply for that resonate with them. Resources such as the Chamber of Commerce often list local job openings, and are a good place to comb for recent availabilities.

Managing Money

The younger you begin various habits, the better they stick with you. Teach your children the positive effect proper money management can have on their pocketbook. Start by opening both a savings and a checking account for your teen. Each pay period, help them figure ten percent of their earnings to put into their savings. You can also work with them one-on-one each month to help balance their checkbook and plan for any large expenditures.

Saving for College

Secondary education isn’t cheap. If your son or daughter plans on attending a college or trade school, the time to start saving is now! Work with your future student to determine an educational budget, providing an estimate of upcoming expenses. Once you know the amount needed you can set savings goals for both you and your teen to start tucking money away. The sooner you begin your savings journey the smoother the road will be to your target amount.

Making Payments

Whether it’s purchasing their first car or simply covering the cost of meals at school, learning how to maintain a payment plan is an important life lesson. Explain your personal bill paying system to your teen and see how they can tailor it to their needs. Once they have a grasp on the system itself, gradually add payments to your child’s list of responsibilities, even if you add the money to their account. This will help them learn to keep an updated payment calendar before they graduate high school.

Money management is a continual learning process. There are always new techniques or tricks to better arrange your finances. Don’t stop honing your teen’s money management after these four lessons – stop by Peoples Bank & Trust and see how you can keep growing your family’s financial skills today!

Budgeting for Your Big Day

budgeting

After the question has been popped, answered, and celebrated, it’s time to get into planning mode! Coordinating everything from table seating, gift registries, food, and more – putting together an exciting wedding celebration is no easy task! See how to get the most out of your big day, with these helpful budgeting tips courtesy of Peoples Bank & Trust.

Have the Money Talk with Your Family

One of the great parts about a wedding is the fact that it symbolizes two people, and two families, joining together. Like-minded, the budget is a joint effort as well. Sit down with your parents, spouse, and his/her parents to discuss what can be contributed by each. Once you have decided on a reasonable budget you can begin to look into venues and vendor options.

Be sure to also ask relatives with talents to help with various wedding activities. Whether it’s photography, floral arrangements, or simply singing during the ceremony, you’d be surprised how many talented family members are more than happy to help!

Pick Three

The golden rule to budgeting the perfect wedding is to choose your top three priorities. Whether that’s the food, venue, photographer, or other wedding elements, choose which components you want to put the bulk of your budget in. After these top three it doesn’t mean you can’t spend money – it simply allows you the freedom to save money in the areas that aren’t the main focus.

For the average wedding the top three expenses are the venue, dining, and entertainment, followed closely by the photographer, floral arrangements, and wedding dress.

Staying Under Budget

Like any good budget, staying on top of your numbers is a huge advantage! Be sure to keep all your receipts associated with the event to help track expenses and create a paper trail with your various vendors. Just like your personal finances, it’s a good idea to leave some cushion for the unexpected. Whatever your overall budget is for the event, be sure to leave 5% of it unused for various unplanned changes. This way if extra flowers or drinks are needed, the money is already set aside, headache free!

Setting the date is simply the start of your wedding planning adventure! If you need help structuring your big day’s budget, stop by Peoples Bank & Trust or give us a call at (636) 528-7001, we’d love to help make your wedding a success!

Peoples Bank & Trust Co.

NMLS# 407724

Equal Housing Lender

Member FDIC

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