Let’s face it…times are hard economically right now for many Americans. We in the Midwest have not been as affected as some other areas of the country, but we all feel the pinch at the pump and The grocery store at the very least. Well, when the going gets tough, the tough make a budget and stick to it. I am a firm believer in budgeting, it helps you stay on-track with your finances so you can weather difficult economic times. Budgeting is one of the burdens of adulthood, it can be a daunting task when you may be overwhelmed already with bills and the other burdens of your life. But, even in good economic times and times when you think you’re ahead of the game financially, it helps you to maintain a cushion. When developing a budget, here are some steps to take to get you in the driver’s seat of your personal finances.
1.) Look at your income. Is it static (the same every pay period) or dynamic (it changes depending on hours, commission payments, tips, etc.)? If it’s static, that helps you to determine what you have to start with each month.
If it’s dynamic, make a mental note if the low times are consistent (same months or seasons each year) and set aside extra from good months to prepare for the bad ones.
2.) Separate out your bills. Make three piles: credit cards/flexible debt (debt that can go up in amount owed even with payments); all other bills (mortgage payments, utilities); and household expenditures (groceries, gas, prescriptions, etc.).
3.) Make a calendar. Most word processing programs have a calendar template. I type in, six months in advance, the due date of each bill and the approximate (or actual, in the case
of bills that have the same payments every month) amount owed. I also put my pay days in bold and red, so I know when money is coming out AND in each month.
4.) Take a hard look. This is the least fun part. Start subtracting out your necessary bills each month-rent or mortgage, utilities, child care (if applicable). Then move to the bills with finance charges and interest rates, especially credit card debt. Making the minimum required payments on credit will literally take you years to pay off and add hundreds or thousands of dollars to your final bill. Always try to make twice the minimum required payment each month. That extra goes directly to principal and takes off interest that would be owed next month. Look at your debt with the highest interest rate and make every effort to chisel that away as much as possible.
5.) Household Expenditures…try to estimate your groceries and gas per month. Coupon clipping, gas reward cards, and buying in bulk are all good strategies to cut your expenses back to a manageable amount.
6.) Emergency Fund. Every family needs an emergency fund, the “just in case” money. You never know when something might happen to put one or both incomes from a household out of work, a major appliance quits, the car breaks down, one of any of these can create an extreme hardship for most households. By having money stashed away in a savings account, you can ease the burden on yourself. Try to put back a little each month, even if it’s just $50, to start saving.
Sometimes it is hard to stick with a budget, but the rewards in the long run are more security for you and your family!
MOBILE BANKING, E-STATEMENT,AND BILL PAY…OH MY!!!!
Peoples State Bank has some fantastic new services to help you manage your funds at home or away. Check our website at www.psbonline.net to get started today!!
Spring Has Sprung, Tax Refunds Are Here!
Spring is here, flowers are blooming, birds are singing…and tax refunds are hitting bank accounts all over the country. If you are one of the lucky individuals who is receiving
something from Uncle Sam, you are faced with one big question: Now what do I do with all of this money? There are several different avenues that you can take, but here are some recommendations to make the most of those dollars.
Pay Down Your Debt. Yes, not the most fun option, but when you look at the savings from doing this, you may think again! Let’s say you are getting a $3,500 refund that you can solely devote to paying off debt. You have the following debt:
a. Credit card, balance of $2,500 at 12.9% interest, minimum monthly payment of $100…30 months to pay off balance by making minimum payments, $436.10 in interest paid
b. Credit card, balance of $4,000 at 4.9% interest, minimum monthly payment of $150…29 months to pay off balance by making minimum payments, $248.05 in interest paid
c. Vehicle loan, balance of $3,500, 36 months, 7.9% annual percentage rate, monthly payment of $107.12. Total interest paid of $462.66.
Now, let’s look at how much you will pay in interest, or empty money, during the lifetime of THESE DEBTS if you apply your tax refund to the payments. Not using your tax refund to make any of these payments: $1,146.81
Pay down credit card b.: $903.38
Pay off the vehicle loan: $684.15
Pay off credit card a. and apply $1,000 to credit card b.: $601.10
Pay off credit card a. and apply $1,000 to the vehicle loan: $353.52
By using your refund to pay off credit card a. and putting $1,000 on your vehicle, you will be saving $793.29 in a little over two years!! Plus, you will be freeing up $100 per month
that you would have been paying on the credit card that you can now apply to other debt, or add to your savings.
Pad (or Establish) Your Emergency Fund. I cannot stress the importance of having that available to you in an emergency situation.
Sometimes you have to look at the “what-if’s” in life: what if I have an accident or become sick and am out of work for 2 weeks, 2 months, or longer? How will your
family survive? What will replace the loss of your income? What if my vehicle requires repairs for it to function? Make sure that you know the answers to those questions before you forego
putting some money into a savings account for this purpose only.
Make A Sound Investment. Interest rates are not the best at this point, but look for the highest return on your investment. Also, look at how accessible you need the money to be. Can you not touch those funds for one year, five years, not until retirement? Examine your financial position before putting your funds into something that will tie them up long-term or penalize you for early withdrawal.
There are millions of other ways to spend your tax refund. Just remember, taking the time to examine your financial position will help you to maximize the effectiveness of that money.
April ICBA Community Banking Month-Help Peoples State Bank Celebrate!
Washington, D.C. (April 1, 2013)—The Independent Community Bankers of America® (ICBA) and its nearly 5,000 community bank members are kicking off ICBA Community Banking Month by encouraging small business owners and consumers to bank locally with a community bank. By doing so, customers will make a hometown investment they can be proud of because community banks put local deposits back to work right where it belongs—in the community.
“Community banks help area families achieve financial stability while also driving small business lending in their communities—all of which helps their local economy and community to thrive,” said Bill Loving, ICBA chairman and president and CEO of
Pendleton Community Bank in Franklin, W.Va. “Throughout the month of April, our goal is to celebrate the unique role that community banks serve in our nation’s economic system while helping to educate consumers and small business owners about the benefits of banking locally with their community bank.”By driving local economies and creating local jobs, community banks are an integral part of our nation’s financial system. With nearly 5,000 members, representing more than 24,000 locations nationwide and employing 300,000 Americans, ICBA members hold $1.3 trillion in assets, $1.1 trillion in deposits, and $800 billion in loans to consumers, small businesses and the agricultural community. There are almost 7,000 community banks, including commercial banks, thrifts, stock and mutual savings institutions, with more than 50,000 locations throughout the United States. Assets may range from less than $10 million to $10 billion or more. Community banks constitute 96.8 percent of all banks.
“Community banks are relationship lenders that thrive when their customers and communities do the same. Taking care of customers and looking out for the best interest of local communities is the community banking business model,” said
Loving. Peoples State Bank is a member of the Independent Community Bankers of America and proud to serve the citizens of northwest Kansas. To follow the conversation on Community Banking Month, follow the hashtag #golocal on Twitter. To learn more about community banks, visit www.icba.org.