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

How Much You Can Save by Camping on Your Vacation

camp

You deserve a little vacation with your hunny and children, but what can you do that won’t break the bank? Camping is the perfect solution for families looking for frugal fun! We’re here to share a few of the different ways camping saves you cash and packs in the entertainment.

Cost Per Night

Camping costs zero to $30 a night based on if you have to pay a fee to stay at a camping ground. That number looks tiny compared to the hundreds of dollars hotels cost per night. You may have to invest in some camping gear such as a tent, but your investment will be well worth it, as these items last years. Do some research on the best places to stay, and you’ll be a happy camper.

Meal Budget

Cooking s’mores and hot dogs over the fire for meals beats the hefty prices of restaurant food – especially when you travel as a family. Overall, Americans spend an average of $33 per day on food when on a vacation within the U.S. In aggregate, more than 80% of that amount is spent in restaurants. You have the opportunity to control how much money you spend on eating and find fun ways to cook over a fire!

Free Excursions

Instead of paying a few hundred dollars for the family to enjoy zip lining and other excursions, camping brings the nature to you! If you decide to camp at a national park, there are many attractions within that you can see. Wallet-friendly options to family activities include hiking, biking, stargazing and more! As a bonus, you are even able to bring your pets along for the trip.

No Size Limit

No matter how big or small your family or group of friends is, you won’t have to worry about extra large quantities of money being spent. If you had more than four people, you’d need another hotel room – camping doesn’t make you spend hundreds more when another person is added to the group!

Pay With Cash

When you’re on your trip, pay with cash. This helps you spend less and stay more conscious of your spending habits. It’s a lot harder to keep up with how much you’re spending when you don’t see the money leaving your hands. Grabbing grocery items for the fire can sometimes end in getting more than you need, so using cash will help limit your spending and stay on top of your budget.

Vacations are great ways to bond with friends and family, however, you don’t want to lose your savings to have fun. Camping allows you to maintain your frugal lifestyle while still enjoying life to the fullest. If you’re looking to create a budget and start saving for your next camping trip, give us a call or stop in today!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Best Practices for Protecting Your Data

Over the years, cyber hacking has been on the rise – nearly doubling from 2016 to 2017. Out of all of those attacks, 93% of all breaches in 2017 could have been avoided with simple cyber hygiene practices according to Online Trust Alliance. That’s why we’ve decided to give you some updates on the latest cyber security practices!

Don’t Click It

Hackers are getting sneakier as to where they place their bugs. You may know not to trust a strange email from someone you don’t know, but what happens when you get an email from your university or a trusted place of business? Hackers have the ability to make their emails look more like something you could trust from a local business compared to the strange phishing emails you may be used to looking out for. Be extra cautious when reading through emails – and don’t click any links or download files if you weren’t expecting that in an email.

Turn On Two-Factor

Two-factor authentication gives you a second layer of protection if your data does get hacked. Many programs and devices offer this authentication choice, so use it whenever possible. This significantly increases your chances of staying safe from a cyber security hack.

Restrict Oversharing

By putting too much information on your sites, a hacker can use that data to hack into an account through your security questions. If you post about your adorable dog, Fido, chances are that dog’s name is in your password or security question. Also try to avoid posting your address, phone number, full name and so forth, as all of that can be used against you.

Generate Multiple Emails

We’ve all heard not to have the same password for everything – and we know many of you are still guilty of that. However, you may have not heard about having different emails for separate reasons. A good rule of thumb is to create three separate emails: one for strictly banking, another for emails to friends and family and one for all your stores and shopping coupons. This will help block hackers from getting into all your different accounts and finding personal data.

Install Ad Blockers

On any web browsers you use, be sure to install ad blockers or turn on your pop-up blockers. This will help save you from trying to close out of something and getting a virus that came up when you were searching online. Having any potential ads blocked will help keep your computer clean and your data safe!

We hope these new practices help protect your data from potential hackers. If you have any questions about your information being safe with us – no need to worry! We’re proud of our security practices and hope you will be able to say the same after making a few improvements.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

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

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

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

De-Junk the Digital – Cleaning Your Cyber Life

While you may be noticing the cobwebs in your ceiling corners as you begin your summer cleaning project checklist, it’s just as important to clean out the digital cobwebs at least once a year! If you have no idea where to start, don’t fret, we have created an easy list for you to chip away at in one day without too much elbow grease.

Why?

Why is it important to de-junk your digital life so often? The first reason is safety. You can’t be cyber-safe if you aren’t an active participant in monitoring your own data and safeguarding it from potential hackers. Second, those precious family photos from last year’s vacation could be gone in an instant if you don’t back up data most important to you. Lastly, re-evaluating your storage, web plans and physical devices can even save you money!

Data Bugs

Just like house cleaning, start with the toughest and most dreaded “room” first. For your house, this might be your bathroom, or for your digital life, it’s your files. Get those pesky and unnecessary files deleted off of your desktop and organize the important ones into folders. Don’t forget your downloads folder, as items seem to multiply quickly in there.

Consider utilizing cloud storage where you don’t have to worry about your files being held hostage (Ransomware). Invest in secure backup services and double check that you are up to date on your security software. Not only is your information up for grabs from scammers, but you could even be storing personal information about your friends that could threaten their web security as well. Cleaning this up will give you the peace of mind that you’re protecting others as well as yourself.

Spam Sweep

We all have that junk mail that keeps piling up. Instead of just deleting them, save yourself future time by unsubscribing from all of the non-essential sites. You don’t want to open up emails that could be potential threats to your security. Find all of your old email accounts that you no longer use, and close them.

Even having additional information available about yourself out there and not monitoring it can cause a huge headache later. Keep it squeaky clean. Just like ridding your home of junk, less is always more when it comes to your private information. Safeguard it. Protect it.

Old Passwords: Bite the Dust

It’s time to have new passwords for all of your accounts. Each account should have a different password, and if you have a hard time remembering all of these, try out a (SAFE) online passwords manager. There are a variety available, but make sure to do your research before you choose one.

Squeaky Clean and Smart (Phone)

Similar to your computer, delete any phone apps that you no longer use and make sure all of your photos are uploaded on the a cloud based service. Do you have your phone password protected? If not, put one on immediately, or update it if it is a numbers-based log in. Take a look at your current phone plan, and see if it’s time to reconsider your plan or provider for better services or price.

Scrub a Dub Devices

Lastly, it may be time to recycle your old gadgets you aren’t using any more. Maybe you can make money off these items! If not, it’s still a great idea to go through even your oldest devices and scrub them clean of your personal information.

Utilizing these digital decluttering tips, you can start with a clean slate!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

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!

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.

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!

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!

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!

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.

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

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

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

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