The Latte Factor 101

latte factor

Making your way through the drive through 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 Raccoon Valley Bank 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 or Mint 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, our trusted personal lenders are here to help. Just stop by or drop us a line to set-up an appointment today.

Who Says You Can’t Make a Snowball in the Spring?

snowball

While the weather can be as predictable as the Powerball, one thing that you can always count on through the seasons is your ability to snowball anytime you want. However, before you start creating snowmen out of ice shavings, let’s first cover what a snowball is. Typically in financial terms, snowballing is an action in which you structure your debt payment to decrease the overall time and cost associated with any accounts payable you have.

Here’s how it works: To begin a snowball, you first need to know what debt(s) you have on the table. By creating a list of your known debts, and also checking your credit report for any unknown ones as well, you can ensure you have all your bases covered. Then, using that information, prioritize your debts by amount from smallest to largest. Once you have them organized you can begin to set-up or continue minimum payments across all installments.

For the next step, you’ll want to look through your current spending and earning to see if there are ways you can allocate additional funds each month to pay off your debt. Whether it’s an extra $50 or an extra $500, every penny matters!

These additional funds can then be assigned to the debt you indicated at the lowest amount. Each month you’ll have a little extra money to help pay off that expense even sooner. Once the balance reaches zero, the snowball officially begins! Now that you have eliminated one payment, you can utilize all the funds that were going towards that expenditure and push them towards the debt with the next lowest amount.

Continue to do this process until each unwanted debt is paid off. Debts such as your mortgage are a great thing to pay off early, but may not be necessary to include in your debt snowball. Our helpful mortgage lenders can always assist in restructuring your payments if you are truly passionate about eliminating all debt.

If you’re ready to get started, we have some great money savings tips to help you find those extra dollars!

  • Switch to a Discount Grocer: You could reduce your monthly grocery bill by up to half when you shop at a bulk or discount grocer instead of a brand-oriented chain.
  • Bring Your Coffee and Lunch: Both of these items could be costing you more than you think! The typical American lunch runs approximately $12.00 and an average latte could cost you $3.50 a day. By bringing both food and beverages from home you can drastically decrease your monthly expenditure for dining.
  • Take Advantage of Apps: New technology based tools like Mint, Honey, and RetailMeNot, offer continuous and unique ways to save and manage your personal finances. By taking advantage you can not only save on unexpected items but better visualize your budget through tracked spending categories.

At Raccoon Valley Bank we are excited to help you succeed on your journey toward financial success. If you’d like to set-up automatic payments, or monthly transfers, our Online Banking can help! Visit our website to get started today.

How to Start a Garden without Splurging

don't splurge

Sunshine, flowering blooms, and the smell of something new, planting season is the perfect time to enjoy the outdoors and begin planting your summer garden. If you’re like most hobbyists, you find your plants each year at area greenhouses and nurseries searching for that perfect pop of color.  This year, Raccoon Valley Bank challenges you to try something different and save both time and money with these helpful gardening savings hacks:

Start from Seed: Instead of purchasing six packs of blooms, enjoy entire plots of flowers at only a fraction of the cost. A packet of mixed annual seeds may run three to four dollars and can fill an entire garden with colorful and productive plants for years to come. For some varieties, you’ll want to start them indoors using seedling pots and potting soil. After a few weeks, they’ll be ready to transplant outdoors!

Direct Sow: For some heartier varieties of plants, you can skip the indoor growing and head straight to the outdoors. These cold-tolerant flowers grow best without the shock of transplant. Some great examples are sunflowers, zinnias, cosmos, and nasturtiums. If you’re planning on using any of your flowers for indoor arrangements, be sure to plan to direct sow succession plantings as well.

Make Your Own Compost: Natural fertilizer is composed of decomposing organic matter. Avoid paying the high cost of produced compost and create an outdoor container for your table scraps throughout the season. Allow them to deteriorate along with grass clippings and other yard waste to make a nitrogen-rich supplement to aid your garden’s growth. This added nutrition will help your plants blossom and produce more flowers throughout the year.

Save Your Seeds: To further save on costs, learn how to collect your garden’s own seeds. After harvesting several plants, collect and dry their seeds to use for planting next year. You can save them in handmade envelopes and categorize them to easily find them each year. Typically seeds that are properly dried can be successfully planted for up to three years.

What are you waiting for? Get out there and start gardening! If you have a true passion for gardening and are looking to start a small business or make some renovations to your outdoor area, our experienced team can lend a hand. We’d love to hear your next gardening goal and discover how we can help you achieve it.

Red Flags to Look for on Your Credit Score

Credit Score

Everyone and their brother seems to be sharing the importance of checking your credit score, but once you have the information, how do you actually know what it means? At Raccoon Valley Bank, we want you to not only have the information about your personal finances but be able to understand and act upon it as well. If you see any of the following red flags while viewing your report, you may want to look into the appropriate remedies as quickly as possible.

 

Missed or Late Payments

Your credit report should accurately showcase your current repayment history, which accounts for approximately 35 percent of your credit score. This area of the report should indicate if any payments have been missed and have been reported to the bureau as late. If you see a payment that you were unaware of, be sure to reach out to the company listed and contact them to pay off the bill in question.

 

Fraudulent Activity

It is possible to view your credit report and find bills or inquiries that you did not initiate. In this instance, it is important to take the appropriate steps to report identity theft and begin recovering your financial reputation. The sooner you alert the authorities and lending organizations to this unfortunate dilemma, the less likely you are to suffer any long-term side effects.

 

Excessive New Accounts

While having more than one account open can positively affect your credit score, attempting to open too many in a short time period can cause a negative reaction. If you see more than two accounts opened in the last three months, you may want to wait before attempting to apply for a credit card or other lending option.

 

Active Collections Accounts

If you haven’t checked your credit score in a few years, any potential missed or late payments may now have spiraled into active collection attempts. In this instance, the best practice is to contact the companies listed and discuss repayment options. Many times if you are actively working to pay down an account receivable, the company will work with you to structure monthly installments that fit within your personal budget.

 

At Raccoon Valley Bank, we recommend checking your credit score each month. Tools such as Capital One’s CreditWise make it affordable to see your score without having to pay any associated fees. If you’d like more information on how to increase your credit score, stop in today. One of our trusted personal bankers would be happy to answer any questions or curiosities that you have.

 

Nature v. Nurture: The Psychology of Spending

Psychology of Spending

If you’ve ever taken Psychology 101, you’ve probably heard the argument for nature v. nurture. In this multi-century discussion, psychologists have debated whether a person’s genetics or environment make a greater impact on their personal behavior. At Raccoon Valley Bank we’re excited to share our take on this timeless debate, and share how nature and nurture affect your spending habits.

 

The financial traits which we see as more nature based are:

  • None

Are you surprised? Contrary to many personal opinions, financial lessons and preferences are 99.99 percent teachable. This concept is backed by an interesting study in which children were given one marshmallow immediately, but were given another if they could occupy themselves until the tester returned to the room. Researchers found that the kids who were able to wait to receive the second marshmallow went on to have more successful ACT scores and other measurably improved personal relationships. This information is particularly interesting due to the fact that delayed gratification is a skill, which can be taught from a young age.

 

Delayed gratification is one of the initial skills learnt for financial education in the form of savings. For this reason, it is practical to begin a child’s understanding of finances with this particular task, however, there are many other aspects of managing your money that can be tied to these initial skill sets as well.

 

The financial traits which we see as more nurture based are:

  • Whether you prefer to save or spend.
  • The specific items you enjoy saving or spending for.
  • Your skillset for prioritizing tasks and expenses.
  • The desire you have to compare yourself to others.

 

While the list of nurtured traits could go on for miles, the important fact is that like any other skill, fiscal education can be learnt through practice and continued repetition.

 

If you want to grow your personal financial skills set, we recommend starting with a household budget and saving plan. By committing to these two monthly activities you can start to build a foundation of learning to ensure you are adhering to the best financial practices.  As you grow your understanding of finances, adding in a retirement savings plan and debt repayment schedule can be valuable steps to gaining your financial freedom.

 

To start teaching your child these valuable lessons, we suggest great activities (like these) to help them understand the value of waiting. Simple games such as Mister Noodle can provide valuable comprehension for your child early in life.

Three Things to Look for in a Starter Home

Start Home

If you’re in the market for your first home, congratulations! Becoming a homeowner is an exciting step on your financial journey. At Raccoon Valley Bank, our dedicated mortgage lenders are here to help you find the best financing option for your new home. Remember to stop in and secure a pre-approval letter before you start your home search.

 

After speaking with a mortgage lender to help determine your family’s ideal price point, it’s time to start viewing potential homes. During this process you’re bound to find a home you’ll fall in love with, and others that may send you running for the hills. As you ride this rollercoaster of an experience, we recommend searching for the following three things in your family’s ideal new house:

 

  1. Good Bones. Starter homes are a great option to find a great house within an affordable budget. To ensure your investment lasts for the long-term, we recommend taking a hard look at any foundational cracks, leans, or other structural ailments. While the rest of the house could look fantastic, these three issues should be instant red flags signaling you to continue looking at other homes.
  2. Cohesive Neighborhood. The people you surround yourself could be the individuals you see at 6:00 AM taking the trash out, or the partiers you have to ask to turn down the music at 11:00 PM. As you tour properties, don’t be afraid to chat with any potential neighbors and see if there is any information they can give on families you’ll be living alongside.
  3. Suitable Layout. While some renovations are certainly possible when purchasing a starter home, obstacles such as load-bearing walls could limit your expectations. Consider the overall layout of the home at the showing, and see if you could picture yourself the way it is. If the answer is no, then you may want to find a few backup options should the renovations not be available within your budget.

 

The perfect home will look different to everyone. If you’re ready to start searching for your family’s new house, our experienced mortgage lenders are here to help. We work with many successful local realtors, and we would be happy to refer you to the one that fits your needs best. Give us a call or stop by to begin the search for your home today.

 

The Basics Behind New Business

Commercial Lending

A mouthwatering dish your grandmother made you, a leaf falling across the park, or one of the endless questions your preschooler has begun to ask you; the truth is great ideas can come from anywhere. If you have a concept you are itching to turn into a reality, there are some key components you’ll need to make it happen. At Raccoon Valley Bank, we were founded upon our commitment to small and medium sized business, and we are thrilled to help you transform your inspiration into a live entity.

 

To complete the process from conceptualization to implementation, there are ten key components to ensure your business has all the legal qualifications necessary. Simply follow these helpful prompts, and if there are any components you’d like further clarification on, never hesitate to reach out! Our experienced team of commercial lenders is here to answer any questions or inquiries you or your business partners may have.

 

  1. Write a business plan. Your company’s business plan should detail the purpose and differentiators associated with your business. SBA.gov is an informative resource to help you determine all the required components for your proposed document.
  2. Register as an LLC or Corporation. An LLC is the most common choice for new business because the Corporation classification does mandate a $10,000,000 revenue requirement.
  3. Finance your new business. There are a variety of ways to finance your business. Whether debt or equity based, our dedicated team can help you determine which route is best suited for your business.
  4. Determine your business location.  Keeping your budget in mind, purchase or lease the space you’ll be using for your location. If you’ll be working from home be sure to take advantage of the associated tax benefits.
  5. Register for EIN and determine payroll structure. Before you hire any employees,  you’ll need to register for your Employer Identification Number for federal taxation purposes.
  6. Register your business name. You can choose to register your business as a DBA, or Doing Business As, or you can choose to register your company name and/or logo as a trademark. Both options will allow you to operate under your desired business name.
  7. Open a designated banking and credit card account. Separating your personal finances from your business is imperative in keeping accurate accounting records. Additional tools such as Quickbooks Self Employed can help you manage all aspects of your finances at home or on the go.
  8. Complete registration for state and local taxes. Business taxes are set up differently than your personal taxes. Be sure you’re accounting for all the variables before you open the doors.
  9. Receive business licenses and applicable permits. If you plan to sell alcohol or firearms, you may need federal licenses in addition to the various state requirements.
  10. Structure and start a marketing campaign. Marketing is an ongoing effort, but to get customers in the door, they’ll need to know you’re an option. Get the word out with a strategic marketing initiative, and make a yearly plan on to keep new clients coming in.

Teaching Your Children the Basics of Online Security

Financial Education

If you’re like many parents in the United States, your preteens and teenagers may be running circles around you when it comes to utilizing the latest technology. Whether that’s Facebook’s latest updates, new iPhone technology, or the latest app hitting the scene, the amount of new knowledge and innovation seems endless. For your growing adults, this may look more like an endless playground than a minefield, but at times it can be both. To help your children use technology while still remaining safe we recommend these simple suggestions:

 

Passwords are important. Instead of defaulting to the same password for every account, explain to your son or daughter why they should have a complex password for each separate account. Leary cyber criminals are able to gain access to all your accounts instead of only one when they discover the passwords are all the same. The strongest passwords contain lowercase and uppercase letters, symbols, and numbers. Great apps like LastPass can help to store all current passwords in addition to creating stronger password options.

 

Privacy matters. On Facebook and most other social media outlets, there are always options to make your profile private or public. For children, and adults, we strongly recommend keeping your personal online profile private. While you and your children can connect with friends and other known acquaintances, it can become dangerous to push your information out to anyone who wants to read it. For instance, if you post about leaving for a family vacation, and the profile is set to public, potential thieves could now view your home as an easy target while you’re away.

 

Don’t talk to strangers. Just as you had the “Stranger danger,” discussion with your son or daughter when they were younger, this message follows a similar point, but within the chat rooms and friend requests online. While in an ideal world, we wouldn’t face issues like catfishing or cyberbullying, the truth is that these actions can cause real world issues and aren’t always left online. To keep promote in-person communication, remind them of the importance of speaking with friends and family outside of the web, and if they ever do need someone to talk to you and your family are always there to listen.

 

Only use secure wifi. After school, your teen may head to a part-time job or extracurricular. If they’ll be going away from your home or school, be sure to encourage them to steer clear of unsecure wifi. While many afterschool hotspots offer free wifi for customers, often there may be potential cybercriminals broadcasting a false signal. These unsecure signals can give them access to your child’s computer if the wifi is accepted. The criminal could then access personal information, passwords, or hold the computer access for ransom. To avoid situations like this, instruct your teen or preteen to only use wifi at home and at school unless you have approved of an additional location such as the library.

 

Teach your children how to use the internet responsibly, and perhaps they can show you how to capitalize on the creative and efficiency tools it offers. At Raccoon Valley Bank, we think that family is one of the most valuable parts of life and we want to help your family grow. If you’d like to start a checking or saving account for your teen or preteen, stop in today, we’d love to help you get started.

7 Items Worth the Splurge

Save Money

When you make your savings plan, you often don’t think about the things you should spend extra money on. While scrimping on other items such as groceries or kids clothes could help you in the long run, there are some expenditures that could cost you in the future if you don’t pony up for the better option. At Raccoon Valley Bank we suggest taking a second look at these seven products, and seeing if you need to upgrade the next time you buy:

 

Toilet Paper: You may not think it’s necessary, but let’s be honest; when you’re staying at a hotel that doesn’t have the good stuff, you notice. Household items such as toilet paper or garbage bags are bought to complete a task, and if they don’t complete it well or comfortably then it’s time to reconsider your options. We believe this product is worth the extra couple bucks, but we do recommend saving by buying in bulk!

 

Office Chair: If you’re like many Americans, you may spend a majority of your day sitting down. To avoid chronic back pain, and a slew of other ailments, we recommend investing in a comfortable and reliable office chair. If your employer is willing to pay for all or a portion of the chair, be sure to offer your measurements to be sure their options fit your height and weight specifications.

 

Mattress: Did you know you spend 33 percent of your life sleeping? For such a large portion of your time, you’ll want to be sure you’re getting the best sleep possible. Avoid those box store less costly options, and test out a few of the higher end options available in your budget. Not only can you sleep better, but you may find yourself spending less on coffee or energy drinks as well.

 

Pillows & Bed Sheets: While the mattress will make the biggest impact on the quality of your sleep, upgrading your thread count and purchasing the proper pillows can make a world of difference as well. Something as simple as changing the firmness of your pillow could help you sleep through the night more soundly.

 

Work Clothes: Sweats, shorts, and other home attire may not require the added expense, but the clothing that you wear to portray yourself at work should come across as professional while also remaining intact over time. We suggest finding one or two brands that fit both your budget and your style, and selecting key basic pieces to compile a wardrobe of endless combinations.

 

Garbage Bags: Do you enjoy it when you go to take the trash out in the early morning and just as you reach the bin, the bag breaks across your feet? No, neither do we. We agree that it is more than worth the extra dollar or two for the name brand bags that won’t break. After all, if the bag breaks, that means you’ll need to take a shower too!

 

Data Plan: Every cell phone provider seems to come out with a brand new plan option as soon as a new phone is released. While the choice of phone is completely up to you, we think that the data plan should cover not only what you think you’ll use, but some buffer room too. Instead of paying the expensive overage fees every time to go over your data limit, we recommend purchasing a more comprehensive plan to ensure you have a little extra space when you need it.

 

These seven things will prove their worth in the long run, and many items only require a one-time investment. If you have any other items you think we should add to our list, let us know on our Facebook page. We’d love to hear from you!

Planning Your Spring Garden for the Best Return

Savings

Spring is still just out of sight, but for prospective spring gardeners, the time to start seed germination is almost here! With seeds for some summer produce taking up to three months to prepare for planting, planning ahead of time can truly make or break both personal and commercial growers. Before you start organizing your garden for the season, we offer these helpful tips to help you make the most of your agricultural investment:

 

Grow Heirloom: Tomatoes are a staple of countless summer gardens, but what will differentiate your juicy produce from other countless selections at the market? Variety! With new strains of tomatoes being discovered each year, blue, striped, and white fruits can offer your family and customers a unique and delicious twist on a summertime classic. The basic large red tomato has an average price point of approximately $3.50 per pound, but smaller heirloom varieties often go for more than $5.00 per pound. With one plant typically producing over 20 pounds of fruit, you could easily make $100 off of one heirloom plant!

 

Learn to Preserve: Once you’ve harvested the tomatoes grown above, you can continue to tack on the savings by processing those fruits into recipes that can be canned. Packaged goods like salsa and pasta sauce can run about $3.00 a piece, however, you can create a pantry full for the low cost of the plants and reusable mason jars.

 

Add Some Flavor: Personal herb gardens have continued to grow in popularity over the past several years, and 2017 is no different. With many urban gardeners opting to plant their own seedlings, you’d think the retail need would decrease. However, the opposite may be occurring. With an influx of gardening comes an influx of use. Many home cooks are beginning to learn the benefits of using fresh herbs, and they’re not always cheap. Generally, a small bunch of herbs can run between $1-3. This in mind, most healthy plants are able to produce a consistent amount of bunches throughout the summer, and even into fall. If you have one plant that offers 50 bunches at $2 apiece, that’s a simple $100 earned for just one plant.

 

With so many incredible plant varieties to choose from, we’re sure your next garden will be a success! Whether you’re planning to sell your crops at the weekend farmer’s market, or stock a pantry your grandmother would be proud of, the practice of gardening has proven to be a money saver for you and your family. If you have any other great gardening tips, be sure to share them with us on our Facebook page.

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