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

With the recent events taking place causing widely experienced job loss, it’s been a clear reminder of how important an emergency fund is. When layoff or other unexpected circumstances take place, having a fund to use for the time being will be what keeps the rest of your financial life going in a positive direction. 

What’s an emergency fund? 

An emergency fund is money you’ve set aside for unexpected expenses. This stash of money allows you to be prepared for the circumstances life throws at you rather than hoping nothing happens. The average recommended amount to save is 3-6 months’ worth of your normal living expenses, but the more, the better. 

What circumstances would I need one? 

You might be wondering what kind of situations an emergency fund would come in handy. While the possibilities are endless and always unforeseen, here are some examples: 

• Job loss 
• Medical emergency 
• Car issues or accident 
• Major home repair 

What’s not considered an emergency? 

Don’t go through the process of saving for months just to spend it on non-emergent things. Here are a few examples of things you should budget for rather than spend your emergency fund on: 

• Vacations 
• Elective medical expenses (e.g. plastic surgery) 
• Non-essential home upgrades 

How can I start building one? 

The first step to building an emergency fund is figuring out your goal amount. After finding out what your monthly expenses are, it’s time to develop a plan for your saving. Put your fund into a safe place, like a savings account, and stick to your plan, going beyond your goal once you reach it. 

The year is coming to an end and 2021 will be here before we know it. This year, make it a priority to be prepared for the unexpected with an emergency fund. To get started, open a savings account with us today! 

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Whether you’ve just entered your 20s or have been for a while, you’re probably aware of the many changes about to take place during this decade of your life. This is known to be the prime time to try new things, travel the world and live life to the fullest. But, it’s also the time where many individuals make huge money mistakes, fall quickly into debt and struggle getting out. Continue reading to make sure you don’t end up making these dangerous money mistakes in your 20s.

Procrastinating on Retirement Savings

While retirement probably seems too far away to consider in your 20s, it’s one of the biggest and most common money mistakes made. The earlier you start saving, the more compound interest will help you out. Set up automatic savings and don’t touch that money – retirement will be here faster than you think!

Buying a Brand New, Pricey Car

One of the easiest traps to fall into is buying a car that costs much more than is necessary. As a new full-time employee, it’s easy to be fooled by a paycheck that’s larger than what your college self was used to, but now is the time to be saving rather than spending. It’s normal to purchase a new car post-graduation, but stick to a used car or one that won’t leave you with an enormous car payment each month.

Living Beyond Your Means

The temptation to buy unnecessary items is everywhere, especially while you’re young. You might not have kids yet, which can make it even easier to spend money on yourself carelessly. Keep your spending in check and avoid going out to eat often, buying all of the new “in” clothing, getting drinks with friends, etc. There’s nothing wrong with treating yourself every so often, but being smart about how often and what you’re buying is what’s important.

Falling Into Credit Card Debt

This mistake is one that can lead to lifelong and life-changing consequences. Always pay your credit card bill on time and in full to avoid the daunting idea of being in serious debt down the line. Using your credit card wisely is important for building a good credit score, too!

Forgetting the Budget

Planning a budget and sticking to it might seem like a lot of work. In reality, there are lots of great money management applications available that make budgeting a breeze! Budgeting is the best way to have control over your money and make well thought-out financial decisions. Don’t worry – not all budgets are restrictive and difficult to follow. As long as you have some sort of plan set in place, you’re on the right path.

When it comes to your future with money, your 20s will either make it or break it. We’re happy to be here to provide you with the services to make your financial future a success. Contact Peoples Bank & Trust to open a savings account or to learn more about how we can help!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

The holidays often sneak up faster than expected along with the many Christmas gift purchases. This year, go easy on your wallet by making extra income to set aside just for gifts. Life is always busy, but with some hard work and dedication there’s always time to make a little extra cash. Continue reading for some money-making ideas!

De-clutter and Sell

Odds are, there are countless items in your house that either don’t get used enough or aren’t necessary. Now’s a great time to go through your belongings, organize and make a pile of things you can get rid of. Rather than throwing them out, sell your belongings on eBay, Facebook Marketplace or other online platforms. Many secondhand businesses will buy your items to re-sell in their store, or you could even have your own garage sale. This is the perfect way to deep clean and de-clutter your house, all while making some extra money!

Start a Side Gig

Today’s technology allows people anywhere to find side gigs in the click of a button. Whether you enjoy cleaning, are good at lawncare, like pet sitting or more, there’s a person out there who would hire you. This is also great because temporary jobs like this can be done over the weekends to avoid interfering with your full-time position. Plus, you can make this a one month or yearlong deal depending on your preference, so your schedule is completely in your hands.

Find a Seasonal Job

The holiday season is primetime for finding a temporary, simple part-time job. As stores get busier, you can often find a job in retail if that’s what you’re interested in. Other seasonal jobs include working at a pumpkin patch, haunted house or Christmas tree shop!

Save All Year

Rather than waiting until the last minute to save some extra cash, make a lifestyle change and save throughout the year from now on. Peoples Bank & Trust offers a Christmas Club account, which is specifically designed to do exactly this! This account allows you to set aside money each week, even if it’s a small amount. Then in October, you are sent a check for the balance of the account plus interest! Once the holiday shopping rolls around, you’ll be thankful for the amount you set aside and you won’t have to worry about dipping into savings for the future.

While part-time jobs and reorganizing your belongings is time-consuming, the extra money made for Christmas shopping will be well worth the work. We hope this holiday season is full of joy, friends, family and lots of savings. Contact Peoples Bank & Trust to learn more about our services or to open a Christmas Club or other savings account today!!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender