Category: Personal Finance

The Riches Reset: 30 Day Cash Only Challenge

You may have heard the suggestion, but in a day where even plastic purchases are becoming irrelevant, how can paying with cold hard cash be feasible or helpful? We challenge you to find out by going plastic-free for the next 30 days in order to shake up your spending habits for the New Year.  We will begin by informing you on some of the disadvantages you may experience, followed by the surprising benefits.

Cons of Cash

Safety

Carrying cash can be a safety concern. You may feel more exposed to not only being pick-pocketed, but to lose the cash altogether.  When your credit card is stolen or lost, you have an inconvenience, but not a loss of protection. Check in with a member of our team at Raccoon Valley Bank to learn more about the safety features of our credit cards.

Inconvenience

Unless you write down all your purchases, you will have no way to track spending. You’ll need to ensure you have receipts printed or emailed to you if there is a chance of return. Cash takes up a lot of room, especially if there are coins. This becomes consistently challenging if you only carry a wallet. You don’t want to be THAT person who spills their clanging change all over the floor. To say nothing of the inconvenience you will cause others in line behind you, as their plastic taps impatiently on the counter. We recommend using all of the coins you can first, so you’re not weighed down with change.

Credit Benefits

One of the primary reasons many utilize credit cards is the rewards.  With cash, the only reward you can hope to receive is a punch card for your next visit. You also lose out on the opportunity to build your credit. Additionally, an obvious downside would be you are unable to purchase items online or make travel plans. This may be an economic imperative that you cannot accomplish with cash.

Pros of Carrying Cash

It’s Painful

Leaning into the pain of cash-only can be good for you. Research shows that the act of spending cash is emotionally more painful than it is using a debit/credit card. Because of this, you may, in fact, spend less. With each purchase you make, you see your cash value deplete. Unlike a credit card, the effects are immediate. You don’t need to wait until the end of the month to feel the pain, when it is most likely too late.

You Become a Budget Master

Some people have had success with the envelope system in their budget planning. It is a way to limit your spending to a predetermined amount allotted in each envelope. They are separated into different categories such as grocery and gas.  It helps you to be aware of how quickly that $4 latte takes away from your “fun money”. This is more hands-on than establishing multiple savings accounts.

Appreciation

Research shows that you also have more of an appreciation for your things when you buy them with cash. It’s an aesthetically pleasing reward as you are seeing what your money can get. You are better able to see your hard work pay off. Moreover, if you find yourself taking better care of your belongings, don’t be surprised.

While it may not be possible to go cash-only forever, your Riches Reset will help to cleanse you of negative habits to start fiscally strong in the New Year. Afterwards, come see us at Raccoon Valley Bank to see what products can help you reach your financial goals. Best of luck!

First Steps to Financial Fitness

Starting a Financial Fitness routine may be one of the best things you can do for your health. You may not realize it, but financial stress can take a toll on your physical and emotional well-being. If you are one of those who has or is experiencing financial stress, you are not alone. In fact, the leading stressor of Americans is related to finances. Stress, if left unchecked, can lead to changes in your body and mood such as:  heart disease, obesity, headaches and depression. Whether you are unemployed, have a growing stack of debt or simple poor money management, you can start working your way to a healthy lifestyle starting with these five steps!

“You can always improve your fitness if you keep training.” -Pastor Maldonado

  1. Assess Your Fitness Level

In order to know where you’re headed, you need to have a full understanding of where you are starting. Know what you spend, what you have, and what you owe. The first month, simply track what you spend. You may be surprised at how many unnecessary purchase habits you make daily. Take note of what you are taking in post-taxes so you have a baseline of what you have to work with every month. Of special importance is investigating all of your debt. Find out your credit score, and all debts that may have even gone to collections. This is the most overwhelming step, but don’t fret – you are on the right path. If you would like assistance with this, feel free to reach out to Raccoon Valley Bank so our team can help you along in the process.

 

  1. Decide Your Fitness Program

What are you training for? This is where you map out where you would like to go. Create short and long term goals and what time frame you would like to achieve them. We suggest starting out with eliminating your debt, paying off the lowest one first. What habits and routines do you want to establish? What do you want your budget to look like? You can build activity and goals into your daily routine. One aspect to understand is that this is not a quick-fix process. It will take time, so keep your activities simple and progress slowly into building habits. Building financial strength takes time.

 

  1. Assemble Equipment

Now that you have an understanding of where you are and where you want to be, you can put it to paper! Investing in a journal or a simple pad of paper is a great way to organize your daily routines and financial flexors. Additionally, there are many free apps such as: Fudget and Level Money. However you prefer to track it, make it practical and enjoyable!

 

  1. Get Started

Now that you have completed the first few steps, you are ready to begin! You have your well thought out plan, so now it is time to execute. You can be creative with your routine; if you want to find savvy ways to save on basic needed items – do it. Whether that be cooking a meal at home, or learning how to change the oil in the car, it is your plan to tailor.

 

  1. Monitor Progress

Lastly, we recommend that you monitor your progress every month, as needs change frequently. It will also help keep you in check and encourage you from straying far from your goals; you will know them by heart. If you need a Financial Coach to hold you accountable, reach out to a friend or trusted advisor. As your fitness level increases, you may find yourself able to be flexible and switch up your goals or create new ones.  Training takes time, energy and self-control, but by following these steps, you are well on your way to being fit!

Giving back in the New Year: Practicing Selflessness

Many individuals have goals and resolutions they are striving for in the new year. They are fostering hope for a better tomorrow and realize they need to add or dilute some of their habits in order to have the life they envision. Many, if not most of these resolutions fail for lack of motivation. In fact, only about 8 percent of individuals end up sticking with their resolutions and that could be attributed to the type of goals made.

 

A majority of resolutions are self-focused. Very few of them strive for the betterment of others, which could be one of the underlying reasons for failure. While it may not be for lack of trying, goals crafted that solely benefit the self, have less success than those that are other oriented. Although, practicing selflessness can indeed improve your own happiness and household economy in other ways.

 

Tax Deduction

When you decide on a charity, you want to be sure they are reputable. Check out Charity Navigator to find out if you should be giving to a certain organization. Giving to these organizations may enable you to deduct from your income tax if you itemize deductions. Be sure to do your research before giving if you would like to take advantage of this benefit.

 

Better Money Management

Deciding on wanting to give monetarily to a cause will encourage you to monitor budget. Don’t have a budget? Now you have another reason to make one! Do you need to make cuts elsewhere to excessive spending? Having another reason to review your monthly statements can only help your finances. Come see us at Raccoon Valley Bank to set up an automatic withdrawal to your savings account for your giving, we want to make it easy for you! When you are able to focus not only your money but attention to those in need, you are investing in yourself emotionally and financially.  Even if you are only able to give your time through volunteering, it may give rise to gratitude for what you have; decreasing your desire to purchase items you do not need with money you do not have.

 

What Goes Around Comes Around

Although your primary goal in helping others isn’t to help yourself, getting involved can create opportunities for you and even your children. People in need will remember those who helped them at their lowest, maybe someday you will be in need of a favor and they will happily assist you. It enables you to make connections with others, which can help you to better establish yourself professionally.  Is your child socially anxious? Kindness has been shown to reduce social anxiety and can help set your children on a stable track for the future including scholarships and job prospects.

In whatever capacity you have to give and whatever your goals may be for the new year, selflessness will branch off to help you, your community, finances and family. What better resolution is there?

 

How Reading Can Improve Your Financial Well Being

Does being a reader make you more of a leader? Well that might be the case in life and the financial world.  When infamous Warren Buffett was asked about his success he pointed to a stack of books and said, “Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.” Most likely if you’re reading this article, you already see some value in the declaration and are here for affirmation. However, for those of you who still aren’t convinced and maybe even guffawed at the notion of fitting in that much reading into an already hectic schedule, let Raccoon Valley Bank give you some insight to consider.

 

It’s a Low Cost Investment

Instead of taking an expensive flight to an expensive conference, you might consider swinging by your nearest bookstore. Because there is no limit to where knowledge can take you, investing in books is a low investment, with an infinite ROI. You can learn from the best in your business field, or pick up a novel.  The jury is still out on whether memory or comprehension is better with print vs. digital, so get what works best for your lifestyle. Owning the book is preferred if you want to become more engaged by writing in the margins, but stopping at your local library another great option!

 

Makes You More Employable

You can make a great difference in your success by expanding your education. Generally, knowledge cannot be lost. What you learn from reading a few books will set you apart, in that you already know something that has taken others years to learn from experience. Unfortunately, only 42% of adults will read a book after they graduate from college-just think about how much of an advantage that can give you! You will be a great resource for your team and have a greater ability to think on your feet because of the reading vitamins you consume. This makes you more desirable to potential employers and encourages a higher salary because of the value you bring to the workplace.

 

Boosts Brain Power

You’ve heard it said, knowledge is power. Are you unhappy about your financial situation? Pick up the Wall Street Journal or the financial matters section in newspapers. You are sure to gain a wealth of information to help you out of your current situation. Some studies show reading will help strengthen your analytical skills, increase your vocabulary and help you to prioritize goals. Your knowledge of the world will be stronger, and you may just notice your financial skills sharpening as your mind is being refined. This is especially true when you read chapter books, as it encourages deep reading and assessment.

The majority of what you read will not only make you a more rounded individual, it will help you to make more sound, financial decisions. You will be a greater financial asset to your company, and yourself. So grab a book, a hot cup of coffee and settle into your next lesson!

Tips to Reduce Financial Stress – From Panic to Plan

If you are feeling overwhelmed and losing sleep at night because of your finances, you are not alone. There are many factors that can contribute to financial stress such as: kids, marriage, debt, pregnancy, job status and physical health.  According to the American Psychological Association’s 2015 survey, 64% of stress is attributed to money. If you are experiencing a creeping sense of panic over your finances, take a deep breath and exhale. We are going to walk you through a simple plan to get you back in control.

 

1). Identify Stressors

Take time to write out a list of everything that is weighing on you. This can be financial burdens or anything that adding to your anxieties. Maybe you are struggling to meet your mortgage payments or taking care of an aging parent. Maybe it’s an addiction to spending with a mountain of debt surrounding you. Everyone has a story and struggle. Listing out and identifying these is not only therapeutic, but will be the start to knowing what you can and cannot change. What are the problems, and what are your realistic goals? Take this financial stress test to get a better understanding of where you are at and where you would like to be.

 

2). Create a Budget

This will be the map to the end of your tunnel. Doubtless, you have heard the importance of budgeting. Now it is time to heed those words into your plan. There are many financial gurus out there with their preferred budgeting outlines. We would recommend speaking to one of our financial advisors at Raccoon Valley Bank, or learning more about people like Dave Ramsey and his program. When you are crafting your budget, keep in mind the goals you have created and the daily habits you want to create. This is how you learn to make the most of your income. By adding a goal of establishing an Emergency Fund, you will help to eliminate future stressors should and when misfortune occurs.

 

3). Stay Positive & Get Help

The key to staying on track, is staying positive. Once you have your budget set, you are able to track your spending. You may fall off the wagon a time or two, but don’t let shame keep you from starting over. Reach out to a trusted friend or join an accountability group like Shopaholics Anonymous. Be sure to let them know your goals, and your struggles. Having someone to keep you accountable will help you to not only relieve current stress but prevent future panic.

How to Get Smart with Your Credit

Today, practicing the simple credit concept of “living within your means” can be extremely difficult due to medical and housing costs growing more rapidly than the income in many American households. However, this doesn’t mean you can’t manage your credit and debt responsibly.  Here are a few tips to get your credit on track, even when times are tough.

 

  1. Understand what credit is.  According to Finance Solutions Credit 101, credit is your “promise to pay in the future for purchases made today.”  You may be aware that when applying for credit with a lender, your credit report will be pulled to determine your payment history, amounts owed, new credit and types of credit, which is all taken into consideration when determining your credit limit.  Understanding the terms and fees associated with your credit will help you make more educated decisions in terms of lenders, especially if you were to become overextended.

 

  1. Maintain healthy debt.  Maintaining healthy debt is all about making good choices.  This means developing a happy medium in terms of credit history, exercising timely bill payments and managing a variety of credit accounts.

 

A good example of this is the attractive additional 25% off at your favorite store in exchange for signing up for their store credit card at the moment of purchase.  Doing this once or twice is harmless enough, but if you are maintaining credit cards for a variety of stores, this can negatively affect your credit score by repeated hard inquiries and hidden terms not discussed in the rushed sign up process.  Overall, the potential damage to your credit may not be worth the immediate savings.

 

  1. Stay out of the credit danger zone.  Similar to points made in the previous two tips, you need to make good choices when it comes to purchasing on credit.  Watch your accounts carefully to avoid overextending yourself, keep your balances low and always pay your bills on time.

 

If you are in a position where you can’t pay your bill on time, communicate with your lender to make them aware of the situation and determine an alternate rate of payment. While emergency expenses do come up, you can handle them by preparing in advance.  If you don’t have an emergency savings fund built up, start one today and prepare yourself for the unexpected.

 

Managing your credit responsibly can be extremely difficult, and due to unforeseen circumstances you may already be in over your head.  Reach out to us to discuss your financial management needs today.  We are here to help you get on track!

Hunting for College Scholarships

The spring semester is quickly approaching. With the impending holiday break, what better way to spend your time than searching for scholarships? While it may not be on the top of your to-do list over your break, taking this initiative can pay off. Most college graduates leave with a diploma in one hand and $27,857, on average, of student loan debt in the other. Help yourself reduce that amount with these scholarship hunting tips.

  1. Scour the internet: The internet will be your best friend when looking for scholarships. One place to start searching for scholarships is looking for those that are tied to your major or interest. Check with your college, department and university websites for opportunities. Read emails professors send out, since they can contain scholarships that can randomly come across their desks. Try searching for fun scholarships for things like being over six feet tall, being left-handed, or other unique characteristics. You’d be surprised what you’d be able to find!
  2. Shop Local: Most community organizations have a scholarship program. This is an easy opportunity to connect with members of your community to find out more. Check with your high school counselor, who probably has a list of local organizations that offer scholarships. Talk to your local Rotary Club, Chamber of Commerce, Kiwanis, churches, your parents’ employer and other businesses within the area for more opportunities.
  3. Resources: Use your resources! Outside of using search engines and local scholarship opportunities, you can search for scholarships on databases dedicated to helping students find scholarships. Below are website resources you should enlist during your search:
  4.      College Board’s Scholarship Search
  5.      FastWeb
  6.      Scholarships.com

If you’re looking for more tips or solutions to help fund your higher education, our team of professionals are ready to assist you today. We’d love to help you set up a savings plan or loan option to help meet your needs. Contact us or stop by today!

Using the Holidays to Teach Your Kids about Money

When fall hits, that means that the holidays are approaching. During these special occasions, kids are exposed to a different setting where they get gifts, large meals, cards, and more. That’s why Raccoon Valley Bank believes that this time of the year is a great opportunity to teach your children about money. Below are a few ideas on how to incorporate your children into the holiday financial mix!

Identify the costs of the holiday season.

Gifts are a big cost, and children never realize how much it adds up. By putting a monetary limit on the gifts each child and family member gets, your kids will be able to see the value of each gift. Wrapping paper and gift bags are also a cost you need to identify to your child, along with the supplies needed such as tape and tissue paper. Cards and letters to family members can add up too, especially if you’re using postage. By allowing your child to understand that the cards they receive and send actually cost money, they will appreciate them more and try to find a way to save, possibly by making their own. Finally, the meals made for each holiday add up quite a bit, so this is another helpful way to teach your child about finances.

Limit gift giving outside of immediate family with homemade gifts.

This is another way you can cut costs if you have people outside of your immediate family you’d like to give gifts to. Ideas for these easy and efficient gifts include:

  • Cookies
  • Cake in a mug or other mug mixes
  • Spice rubs
  • Trail mixes
  • Brownies
  • Tea & hot chocolate

The ingredients for these gifts can all be bought in bulk, making them inexpensive options.

Take your children shopping with you.

When you bring your child with you shopping, tell them what the budget is. Then, let them look for items that are on sale or have special deals.

Use your receipts to create a tally of your expenses.

Not only does this help you keep track of what you’ve spent, but it also shows your kids how small costs can add up over time.

Teaching your children the value of money will help them grow to be financially responsible. So when you go to get groceries for a holiday dinner or gifts for a family member, have your child be involved in the process. You can also set up a savings account with Raccoon Valley Bank to teach your kids the value of saving!

Understanding the Psychology Behind Spending

The words “budget” and “exercise” can often be put in the same category—both are necessary for a healthy lifestyle but are far from fun.

If you have trouble sticking to a budget, you’re not alone. There are some very powerful reasons why human beings feel compelled to spend money—and there are some things you can do to psychologically trick yourself into spending less.

The Need for Control.

A study in Journal of Consumer Psychology found that compulsive shopping was linked to a need for control. Those momentary feelings of happiness associated with a new purchase weren’t linked to the item itself but to the sense of control a person felt about their life in that moment.  

The Need to Compete.

It’s true—we really do feel the need to keep up with the Joneses. Advertisers know this, so they often play on our desire to be like the people in their ads and on our fear that we’re falling behind our peers. This includes tapping into our need to look our best, be recognized and accepted by others, taking control of our health or being loved.  

What you can do about it.

Luckily, you don’t have to let your brain trick you into spending more than you should. A few ways you can fool yourself into spending less include:

·         Only carrying cash. Decide ahead of time how much you will need and stick to that.

·         Don’t shop when you’re in a bad mood.

·         Scan your social circle. Are your friends pressuring you to spend beyond your means?

·         Identify where you spend the most money and take steps to resist temptation. For example, do you spend too much eating out? Make sure your pantry is stocked so you won’t be tempted to spend too much at restaurants.

·         Question yourself as you go to make a purchase. Are you really happy about that new TV, or are you trying to escape a problem at work or home?

While we’re hardwired to want to spend—especially in our consumerist society—a little bit of planning and restraint can go a long way to keeping us on financial track. Raccoon Valley can also help you stay on track with a variety of banking products. Give us a call or stop on in today!

New Season. New You. New Financial Goals.

It’s a new season and a new month, making it the perfect time to set new financial goals! While money management may not be your strongest asset, we believe with a little goal setting, discipline and a little help from Raccoon Valley Bank, you can end up surprising yourself how much of a financial all-star you really are! Start with these quick tips and watch your money grow.
Create a budget and stick to it – Budgets don’t have to be hard. Write down your outgoing expenses and any incoming money. If you’re spending more than taking in, it’s time to eliminate some costs. If you need help with monitoring your spending, we can help you get on track.
The importance and purpose of a budget is to help you spend less than you earn so you can save money. So by not sticking with the budget, what’s the point of having one? Create it, use it, and stick to it.

Eliminate Wasteful Spending- For the next round of bills you receive look at them closely. Do you need every service you’re paying for? Are you being charged unknown fees? Go through your bills with a fine tooth comb and raise any flags so you’re not nickel and dimed.

We live in a time of instant gratification, but that often leads to financial consequences. Before every purchase, ask yourself “Do I really need this?” If you find the answer is no, leave it behind and move forward.

Build Your Savings – Every time you’re paid, the first deposit should be into your savings account. Essentially, you’re paying your future self for emergencies and retirement.
If you haven’t done so already, now is the perfect time to set up your 401k or 403(b). Generally, companies match their employees to a certain percentage and that’s free money you should be taking advantage of today.

Leave money you’re saving alone. There are penalties for withdrawing money early from certain accounts. Why pay a penalty for money you worked hard to put in there? Let it sit tight and watch it grow!

We hope these tips help you work towards your financial goals this month or season. We are available to help you with your financial management if you need it. Just call or stop by to get your goals underway.

 

We're Centered Around You