Retirement may seem an eternity away; however, even if it’s a dream 20 years down the road, saving for retirement shouldn’t wait until the goal is in sight. Rule of thumb says you’ll need $1,000,000 in savings to retire comfortably. Our experts at Raccoon Valley Bank recommend taking the following steps to save with the future in mind:
- Determine when you want your $1 million. The typical age of retirement is 65, but you may be shooting for a few years earlier or later. Whatever the age affects how much you need to save each month, so calculate years left to save based on current age and breakdown monthly savings requirements thereafter.
- Start saving ASAP. Compound interest rewards those that begin saving earlier rather than later. A $10,000 investment at age 25 could yield tens of thousands of dollars more by 65 than if that same $10,000 were invested at 35.
- Spend less than you save. It’s basic math. You’ll have money left to save only if income exceeds expenses. Buying a home within your range, purchasing cars secondhand, and paying for vacations out of savings and not on credit protects you from dipping into debt.
- Opt for automatic. Research your employer’s 401k or retirement-based plans and determine what percent you’d like funneled from your paycheck and into your savings. If your employer matches contributions up to a limit, work to reach their maximum to make the most out of your savings.
- Set-Up an Emergency Fund. Expect the unexpected. A flooded basement or dying car engine can send you spiraling out of your savings plan if you haven’t budgeted for rainy days. Set up a $1,000 emergency fund as soon as possible, and work to expand it to anywhere from 6-12 months of income to protect you from larger surprises, like medical issues or unemployment.
The road to a million takes time and discipline, but it’s exceedingly possible. For further savings strategies, make an appointment today to meet with one of our trained financial experts today.
Gardening season is upon us! Whether you’ve been gardening for decades or are flexing your green thumbs for the first time, save some green as you grow this spring with these helpful tips from Raccoon Valley Bank:
- Study the sun. You can burn hundreds of dollars by accidentally placing plants in areas that receive too much or too little sunlight. Take time before planting to make notes on the sun’s path across your yard, scoping out key sunny and shady spots along the way.
- Invest in mulch. A layer of fresh mulch aids in protecting against soil erosion while cutting the costs of weed killer.
- Reuse newspapers. Before you lay down protective mulch, spread layers of old newspapers directly onto the soil to block weeds and lock in moisture. Eventually the newspaper decomposes while saving on water costs in the long-run.
- Try natural bug protection. Instead of buying pricey pesticides and bug zappers, place fabric softener sheets next to outdoor light fixtures to deter flying insects.
- Make your own weed killer. Eco-friendly and inexpensive, you can create your own weed killer by mixing 1 gallon of white vinegar with 1 ounce of liquid dish soap. Put this mixture in a spray bottle and directly apply to weeds for the maximum effect.
- Start composting. Create nature’s best fertilizer in your own backyard by forming a small compost pile of kitchen and yard waste. Not only do you reduce your footprint by saving space in a landfill, but your homemade compost saves you money and increases the yield of your plants.
- Plant the pricier edibles. To save money, time, and precious garden real estate, invest in planting herbs and vegetables that would normally cost you a bundle at the grocery store. Grow pricier crops such as raspberries, shallots, and basil yourself and buy cheaper produce like lettuce, carrots, and parsley at your local farmers markets.
At Raccoon Valley Bank, it’s always growing season when it comes to building your wealth. If you’re looking to prosper your financial gains stop by and give us a call at (515) 993-4581 today!
Jumping into the ring of homeownership is an exciting milestone! There are many ways owning a home can impact you and your family. How do you know when to rent and when to make the move to purchasing your home? Raccoon Valley Bank is here to help with our handy guide to the pros and cons of renting or owning a home.
- No wealth creation. As your payments go directly to your landlord and not the specific property, you are unable to build equity and reap the return on investments from the home’s growing value.
- No tax benefits. While homeowners can deduct property taxes and mortgage interest payments from their federal income tax, renters can’t claim deductions for housing costs.
- Dependent on the landlord. For everything ranging from utilities, to paint, to the rent dollars themselves, your landlord makes the majority of the decisions when it comes to renting a home. Depending on your lease, your landlord can increase the rent increase each year, or month!
- Accommodates flexible lifestyles. If you travel frequently for work, leisure, or medical care, you may not have the time or availability to take care of a home. Renting allows an affordable accommodation without any hassle of renovations or repairs.
- Freedom in allocating finances. For renters, expenses such as mortgage insurance, real estate taxes, and home maintenance costs, can instead be funneled into savings, stocks or discretionary funds after the monthly rent and utilities are paid.
- Reduced insurance costs. Apart from renters insurance that covers the interior of a home, costly homeowners insurance and unexpected repairs belongs to the landlord, not the tenant.
- Unexpected costs. Leaky roofs, backed-up pipes, and cracking foundations create thousands of dollars worth of unplanned repairs that stretch your budget to accommodate.
- You’re locked in. Once you sign on the dotted line the house is yours, and so are the payments.
- Fluctuating home value. Despite your best efforts, your home can become less marketable based on circumstances out of your control. A declining neighborhood, housing surplus, or unstable market can decrease the value of your home despite well done renovations.
- Fixed monthly payments. Homeowners with fixed-rate mortgages can trust that their mortgage payment will stay consistent each month, enabling the creation of a stable monthly budget.
- Financial gains. From tax credits to equity building, home ownership offers buyers a number of monetary perks and freedoms they wouldn’t receive as tenants.
- Freedom in expression. A kitchen remodel, a four-season porch addition, and other decorative transformations are all up to a homeowner’s discretion with no strings attached to a lease agreement.
Still on the fence? Our experts at Raccoon Valley Bank can sit down with you to help make a guided decision that suits both your lifestyle and your financials. Call and set up an appointment with us today!
Just like purchasing your home, selling it is a journey all its own. Whether you’re aiming to sell your home in one year or five, you can make a number of small changes that offer a big return on your home’s value. Try these key improvements and see the effect on your next home assessment.
- An eye-catching entrance. As the gateway into your home, your front door will set the tone for what’s within. Update your door bell, paint the front door, and hang a spring wreath to tie it all together.
- Energy-efficient updates: Updating appliances, windows, and fixtures, to their more green counterparts can set your home apart with the attractive promise of future savings.
- Low-maintenance landscaping: While flowers are eye-catching, shrubs and drought-resistant greenery make great visual impact with the promise of less hassle.
- A thorough clean. A deep clean of carpets, curtains, and corners will make your home sparkle and create a positive first impression. Hiring a professional cleaning service may also help to remove hard-to-clean grime and overlooked areas.
- De-cluttered rooms. A tidy house doesn’t always feel open. Heavy curtains, overstuffed couches, and rooms devoid of sunlight can make buyers cautious of square footage. Rid the room of nothing but bare essentials and simplistic furniture to maximize the area of the space.
- Extra mirrors. To double the feel of any room, strategically place mirrors to create an illusion of extra space.
- Small updates to big places. Kitchens and bathrooms are focal points in the selling process. Without the time and cost of a major remodel, small updates like new lighting, fresh paint, or modern accessories can add value to your home on a budget.
- Revamped flooring: Thin or threadbare carpets can raise alarms for buyers as they visualize the daunting need to replace the tired flooring. As your budget allows, replace your home’s carpet beginning high-traffic areas and working outwards.
- Modern lighting. Updating light fixtures to a timeless and simple feel, help to elevate a home’s design and gives the potential buyer a blank canvas to imagine life in their new home.
- A professional opinion. In under an hour, a trained interior designer can provide suggestions for small tweaks, such as furniture arrangement or paint color adjustments, which can increase your home’s value with limited investment.
While improvements are not a guarantee of improved value, they can make all the difference when drawing in interested buyers. If some of your home-improvement projects require a bigger investment than your budget expected, our lending officers at Raccoon Valley Bank can work to help you secure the home equity line of credit you need.
As of 2015, the average American with credit card debt owes $15,762 – and that’s just credit. Auto loans, student loans, and mortgages add thousands of dollars and years of repayment to your personal finances. However, debt doesn’t have to be a life sentence. Once you have made the commitment to work towards financial freedom, follow these steps from Raccoon Valley Bank to begin eliminating those personal debts.
- Establish an emergency fund immediately. Unexpected events can take a harder hit on your savings than unbudgeted spending habits ever could. Even if you’re juggling a current debt or two, work to set aside $1,000 as soon as you can in a separate emergency checking account. As you chip away at remaining debt, this cushion can protect repayment plans from being flattened by a faulty car battery or flooded basement.
- Adopt the Debt Snowball method. Instead of listing them highest to lowest by interest rates, arrange debts from smallest to largest. Paying off a handful of small debts in the same time it’d take to chip away at a large one eases burdens, yields immediate results, and provides motivation to continue saving.
- Reduce your rates. Refinancing your mortgage and negotiating lower interest rates on credit cards can make a big impact. Reevaluating your health, life, and auto insurance policies may reveal services you don’t need, or it can spur you to shop around for providers with lower rates.
- Chop extraneous expenses. Create a list of unavoidable monthly expenses – rent, utilities, gas, food. Create a second list of leisure expenses – gym memberships, cable, eating out, clothing. After budgeting for the necessities, pick a few discretionary categories you’d like to keep with reduced spending, but cut the rest. Putting your spending on a diet is easier when you allow yourself a few modest outlets.
- Evaluate progress monthly. Creating a multi-year financial plan for eliminating debt is the first step, not the only one. Perform a monthly check-up on your plan to continue spending within your budget. It can also provide a boost of encouragement when you see progress, and you might spot ways in your new financial routine to make your budget even more cost-effective.
It may be a long road to eliminate debt, but it’s within your ability to travel it. Don’t go it alone – contact one of our advisers today to help you create and stick to your financial plan.