Category: Budgeting

So You’ve Bought Your First Home: Savings 101

home

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, Raccoon Valley Bank 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!

How to Adult: Financial Starters

adult

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 downpayment 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!

3 Keys to Managing Your Money When You’re Self-Employed

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 Raccoon Valley Bank 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.

The Lessons of a Lemonade Stand – Teaching Your Children the Fun Way

lemonade

Warm, sunny weather calls for a glass of ice cold lemonade. Now that the kids are out of school and looking for activities to entertain them, now is the perfect chance to teach them a little about finances. Here are a few quick tips to help teach your children how to be fiscally responsible.

 

Have them buy the materials.

When deciding to have a lemonade stand, it is important that your children know the value of money. By having them calculate the cost of the lemonade, sugar, cups, sign, sunscreen and pitcher, they will begin to understand the importance of the dollar. You may help them out with costs if they haven’t begun to save from chores, but teach them with our next tip that money isn’t just handed to them.

 

They can ask you to lend or invest.

If your child is looking for a little cash to start up their business, feel free to teach them about lending and investing. Show that mommy or daddy can lend you $10.00 for ingredients. When you make $20.00, you owe them $10.00 and get to keep the rest – no matter how much you make! Mommy could also invest in your stand with $10.00. If you make $30.00, Mommy gets half and makes a $5.00 profit. However, if you make $16.00, then mommy gets $8.00 and loses money.

 

Show them how to take inventory.

Teach your child how to track their items and what each ingredient costs. They will be able to see how much each cup of lemonade costs and the profit they make from selling. They can learn about accounting by subtracting their total expenses from their sales to see the profit they accumulated. Remember to send an email or call the neighborhood before the launch of the stand, so your child can feel like a success. Helping them accrue a little extra business will excite them for their next business venture.

 

Review the sales.

Going over how well you did and what can be changed for next time is a great way to learn about business. Cover a few positives your children did well, and then hit on one or two improvements that could be made.

 

Let them decide where the proceeds go.

Giving your children the opportunity to choose where their money goes is a great way to allow them the feeling of independence. They can decide to give it to a children’s hospital, pet shelter or into their own savings account. If they choose to save, then you have the opportunity to segway into different approaches to saving!

 

A lemonade stand is a perfect way for your child to learn about money without boring them. Creating a lawn mowing business or other summer activities can also be an option if lemonade stands aren’t exciting to them. Give us a call to discuss different savings options for your children and their lemonade money!

Keep It Cool – How to Survive the Summer Heat and Stay on Budget

cool

Summer is here and it’s a scorcher. How will we ever survive this heatwave, and still not break the bank on energy costs? Luckily, we’ve got all the best tips and tricks to keep your home cool on a budget.


Invest in Thermal Curtains

Getting blackout or thermal curtains will save you money over these sweltering months. By keeping the heat out, your air conditioning won’t have to work as hard every day to keep the house cool. This means big bucks will be saved! Keeping your blinds closed or curtains pulled together can save you up to 7 percent on bills and lower your indoor temperatures by up to 20 degrees.

 

Turn Down the Hot Water

A cold shower will feel good when you come in from the summer heat. Look at your hot water tank and turn down the maximum temperature. This means much less energy will be used to heat your shower, washer and sinks. You don’t need the water to be scorching hot, so this will help you to not burn through your money as quickly.

 

Install Fans

Installing ceiling fans will help warm air rise instead of just circulating it through the house like box fans do. Set your fans to run counter-clockwise in the summer at a higher speed. This helps to create a breeze effect throughout the room, keeping you cooler.

 

Lights Off

If you don’t feel like investing in energy efficient bulbs, simply turn the lights off. These bright sunny days will help light your house, saving on your electricity bill. If you are willing to spend money to make money, get rid of incandescent bulbs and switch to compact fluorescent lamps. Incandescent bulbs waste about 90 percent of their energy in the heat they emit, so getting rid of them means a cooler home for you.

 

Grill It Up

Try to enjoy the heat with friends and family by bbqing outside. This will help keep your home cool, as you aren’t having to heat the oven to 400 degrees for an hour. Your home already feels warm, so having a stove or oven on will only make it worse.

 

We hope you can beat the heat with these simple tips! If you’re looking to save a little more this summer, contact Raccoon Valley Bank about opening a savings account. We’d love to help you fuel your financial success.

The Expert Saver’s Financial Bucket List

list

Savvy savers are full of great ideas and qualities, so those who aren’t the best at keeping our finances in check are always left wondering how they do it. Thankfully, Raccoon Valley Bank offers a bucket list with some of the expert saver’s top priorities you can strive to meet!

 

Pay off your credit card debt.

As the average American has $16,000 worth of credit card debt, focusing on paying off yours can be a big financial undertaking. There are different methods you can utilize such as The Snowball Method, which includes making minimum payments on all your accounts and putting what you have left towards the account with the smallest balance. The Avalanche Method involves paying off the largest amount of debt first and continuing on until everything has been paid.

 

Say goodbye to student loans.

Student loans can be one of the longest standing debts in many households. With the average outstanding loan balance being at $37,000, starting a routine to pay off these loans should be a top priority. By committing to a certain amount each month to pay, you’ll see your loans decrease quickly. Be sure to put extra cash towards the loans with the highest interest rates or try to refinance to a lower interest rate.

 

Buy a home.

Being a homeowner is a big step to take in life but well worth it. In some areas, buying a home and paying your mortgage each month can be cheaper than paying rent. Figuring out how much home you can afford and getting pre-approved are your first steps to financial success. A rule of thumb can be to take your monthly after-tax income, subtract all current debt payments and then multiply that number by 25%. This is a good indicator of how large your monthly payment can be.

 

Set up an emergency fund.

It’s sad to say, but bad things are bound to happen. Instead of being caught off guard when a pipe bursts or you need an emergency surgery, build an emergency fund. Having money put aside for the unexpected will help life be much more enjoyable when problems arise. Depending on your income, monthly costs and lifestyle, try to have between three and nine months worth of expenses saved in your emergency fund. See about setting up a savings account with us for items just like this!

 

Get a raise.

Negotiating for a raise can be tricky, but you won’t be able to move forward financially if you don’t push for what you deserve. Focus on all of the benefits you have brought to the company and changes you’ve made for the better. However, don’t expect more than a 4-5% bump, as asking for too much can be viewed as greedy.

 

This bucket list is what all expert savers strive for as an end goal. Put into action a few of these tips to allow yourself the monetary success you deserve! Feel free to give us a call or stop in to discuss our different savings options!

The Savings of Bicycle Commuting and Why You Should Try It

 

Many people realize that biking to work is better for the environment and healthier. You cut down on pollution, get some sunshine and trim your waistline with cycling. However, did you realize that ditching your car on the daily commute has the ability to bring you great savings? As of 2016, the Bureau of Labor Statistics estimated the average person spent $9,000 a year on transportation costs.

 

When people first start thinking of cutting their costs, transportation isn’t typically first on the list. This is partially due to the fact that many see it as a necessity that simply cannot be bargained. We are here to challenge this notion and potentially put some money back in your pocket for retirement or a great vacation!

 

Insurance

 

Many auto insurance companies will give you a discount for putting low mileage on your vehicle. You won’t be driving the car as much, so you are less of a risk to the company. Everyone would love to spend less on insurance, right?

 

Investments

 

General auto maintenance can cost an average of 4k a year, which is significantly higher than a bike at $308 per year. While using a bike as a daily commuter, you are going to want to be sure to invest in appropriate safety gear. This is nominal compared when to a vehicle. You will have less wear and tear on your vehicle, making it easier to sell for a higher price  should you choose to do so.

 

Gas

 

You should slowly diminish your reliance on gas. Who wouldn’t like that? You fuel your bike from the energy you get from food, with many miles more than what your car can get off of 1 gallon of gas.

 

A Better Employee

 

Adding exercise into your daily routine can not only eliminate your need for a gym membership, but make you better at your job! People who exercise before work or at lunch have improved time management, motivation and a decrease in stress. Not to mention the added benefit to your employer of less parking space needed.

 

Consider these benefits as the weather improves and try commuting by bike to work! Maybe cutting back on your transportation costs is exactly what your budget needs!

Can You Save on Groceries From Gardening? What You Should Know Before Digging In.

 

Gardening isn’t for everyone, but if you are looking for ways to cut down on one of your greatest expenditures, your own home garden might be a great place to start! You don’t need to be a Master Gardener to see returns on getting your hands dirty. However, it helps to know a thing or two before digging in!

 

Plan Your Space

Getting your garden started can require a large input of costs. While you may be excited to begin, you can easily end up upside down in this hobby by not planning your tools and the plants you need. The average gardener invests $70, so if you are just starting out, aim for even less. Start small.  Anybody can find room for a few plants, even if you live in an apartment, it just takes some creativity. Your goal should be to minimize costs and maximize yield. How wonderful would it be to only eat veggies grown by YOU?

Try to choose a location that has full sun and well drained soil. Use any of these garden planners to help figure out the layout of your plot. If you pick too large of a plot to fill, you may easily be overwhelmed and less likely to take great care of every vegetable. Efficiently use your garden space by succession planting or companion planning to get the most bang for your buck! You’ll have a variety of plants and waste less money running to the grocery store.

 

Pick Your Plants

One of the most important things you can do to make this a success is to plant vegetables that you actually like! Why spend your time and money on produce that won’t get eaten? Take a look at your grocery receipts. What veggies do you spend the most money on? Which items seem to cost the most? These are all questions you should take into consideration. Stick to mastering a few this season, and tackle more next year!

You can begin early in the spring by starting some seeds indoors – even herbs if you favor the delicious fragrance they offer. Plant cool season plants (carrots, beets, lettuce) early spring and warm season (squash, tomatoes, eggplant) after there is no chance of frost.

 

Preserve & Prosper!

If you’ve gardened correctly, you may have a higher yield than what you can consume. Congratulations! Some items, like potatoes and squash, can last a while if stored at the right temperature. However, other items such as beans, tomatoes, cucumber and even herbs can be canned or frozen to carry you through this winter. Once you get into the swing of things, you may hardly ever need to run to the store for your veggies. If you’ve planned, planted and preserved your produce correctly, you can have significant savings to your grocery bill – and a delicious BLT.

Dreamin’ of Summer- Saving for Your Next Vacation

The monotony of the day to day can get you down in the season of cold and gray. However, that beach on your screensaver doesn’t have to be an esteemed fantasy if you are ready to take some action. You can turn your ideal vacation into a reality by starting to save and plan that getaway now, before travel season hits in full.

 

Create a Budget

If you are thinking about a vacation, you are definitely going to need to establish a budget to keep your spending in check. Some budgeters swear by the 50/30/20 rule. This is a simplified budget where you allot 50% of your after-tax income to necessities, 30% for wants and 20% for savings. Adjust this as you need. We all know that adding kids into the mixture of vacations increases prices exponentially, so you may want to increase savings, and see what you can go without.  See if you can even tap into a “Grandparents Travel Grant” from your parents.

 

Set Up an Account

Stop by Raccoon Valley Bank to speak with one of our specialists about options for savings accounts. We recommend setting up an automatic withdrawal to come from your account each month, or asking your employer to put a portion of your paycheck into a different account. For a majority of people, if the money is there, it will get spent, so having an automatic savings will keep you on track of your goals.

 

Decide How Much You Need

Get a grasp of how much your vacation will cost. That means calculating hotels, food and flight. However, don’t forget the expenses you will still have while traveling. You will still have your normal bills and you may need to pay a local kid to get your mail or a business to board Fido. Divide this amount by the number of weeks until your desired vacation date.

 

Go the Extra Mile

When calculating this all out, don’t be dismayed. This vacation can be attainable for you, as long as you stick to the process. It just may not be in the exact time frame you desire. Keep yourself motivated by listening to music, looking at pictures and eating food reminiscent of your destination. Go the extra mile to scrap for savings everywhere you can. Clean out your closets and post items for sale. Start a change jar or carpool to work. You will be surprised that by putting in the extra effort, your savings can increase fairly quickly as your spending depletes and scrappiness grows. Best of luck, and please let us know how we can help you reach your goals at Raccoon Valley Bank!

Love and Money: Five Common Mistakes

No couple likes to fight, especially when it comes to finances. Unfortunately, money is the leading cause of stress in relationships. And this isn’t only a problem for couples who are tight on money, as a survey has shown that the more your income increases, the more finances will put a strain on your relationships. What this shows is the importance of being on the same page as your partner when it comes to finances, no matter your incomes.

Raccoon Valley Bank has compiled a list of five common mistakes couples make with their money and how you can avoid them to lessen the stress on your relationship!

 

  1. Not Talking About Money Before Marriage

It’s important to have an idea of your future partner’s spending style. Is your partner tight with money because they grew up not having a lot? How does this impact how they envision your lifestyle to be once married? What’s their credit score?  It is important to have this conversation, in order to refrain from becoming upset or surprised when one of you splurges/invests. This keeps a nice checks and balances. Take this fantastic quiz to figure out your money type!

 

  1. Not Having a Budget

If you are too late to avoid mistake #1, this is the perfect time to have that conversation with your spouse. “Failing to plan is planning to fail.” Take stock of what you have coming in, what you owe and what you have for “extras.” This will help to prevent keeping secrets from each other about your spending, because everything is on the table.  Be sure the budget works for BOTH of you, long term.  You can even get your kids involved in order to teach them about money and why having a plan to stick to is important.

 

  1. Not Having Separate AND Joint Accounts

Are you a couple who only has a joint or separate account? We recommend both! Joint accounts make it easier to share in bills and debt together. However, it is still important to have your own account, so you can still feel autonomous in your decisions to splurge (within range of your budget).

 

  1. Waiting 30 Years to Pay off Your Mortgage

Just because it is an option, doesn’t mean you really need to take 30 years to pay off your debt! If you do take the full term to repay the debt, you will pay significantly more in interest. Every extra payment that you make towards your home will be applied to the principal balance. This will enable you to sign that last mortgage check much sooner, permitting you to put money toward retirement, or other goals you have together.

 

  1. Letting One Person Make Decisions

Even if only one of you is bringing in a salary, it is imperative that you are both involved in the financial decisions. If you have one person who is physically making the payments, you should both be reviewing your finances monthly, and making adjustments as needed. Friction can happen when one spouse makes the financial decisions causing the other to feel like a child with a set amount given to them each month. Even if one of you is more financially smart, both should be included in the decisions. There is less of a need to keep secrets from one another when you both have purchase power and communication about your short and long term goals.

Making a plan and sticking to it together can help lessen financial stress in your relationship. If you feel stuck on where to begin, set up an appointment to speak with one of our specialists at Raccoon Valley Bank to help get you both on track to being in charge of your finances.

 

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