Monthly Archives: August 2019

Rainy Day Fund: 4 Ways to Save for Unexpected Events

We all have bad days when unexpected misfortune is thrown our way. You can make those days a little less painful by preparing for the costs ahead of time! A Rainy Day Fund will help you protect yourself financially from life’s mishaps, such as fixing a flat tire or a small plumbing problem.

1. Separate Your Savings

You can separate your savings accounts to better track your savings. For example, you may have one savings account for medical emergencies, one for vacations, and one for your Rainy Day Fund. This could motivate you to save more. If you see one of your savings areas lacking, you can concentrate more money into that account on your next payday.

2. Save Extra Income

While it may seem obvious, it’s definitely not easy. When you receive extra income, whether it be a work bonus or birthday money, put that money directly into your savings account. Delaying the short-term gratification of spending it can lead to more significant peace-of-mind in the future.

3. Start Saying No to Whimsy

Before you go shopping, make a list of what you need. Buy no more than what is on that list and shop purposefully. If you love the occasional “splurge,” account for that in your budget. For example, allow yourself $20/week to spend however you please, whenever you please.

4. Set a Goal

It’s hard to know where to begin if you haven’t set a goal. For many, a Rainy Day Fund is the first step in learning how to build a larger emergency savings. It sets the foundation for a more detrimental financial emergency, such as losing a job. Start small but be specific about what you hope this account to look like three, six, and twelve months from now. Setting and achieving your goals is great motivation!

We offer a variety of accounts to keep your Rainy Day Fund safe and secure. Learn what works best for you at Iowa State Bank.

Savings Hacks for College Students

While college remains one of the best ways to invest in yourself and your future, the cost of attending college continues to grow. Developing strong saving habits can help reduce financial stress and better prepare you for life after graduation.

Set a Budget

Creating a budget is the first step in any successful savings strategy. Outline your monthly expenses, including things like going out with friends on weekends. Next, figure out how much money you have to spend each month. If you’re working while in school, your goal should be for your income to exceed your expenses. If you’re living off of money from a summer job, figure out how much you can afford to spend to make it last throughout the entire school year.

Save on Supplies

Your school’s bookstore may have the latest and greatest when it comes to logoed swag, but shopping there won’t help you save money on school supplies. When it comes to notebooks, pens, pencils, and backpacks, you’re much better off going to a local big box store.

Additionally, buying new course textbooks from campus is usually much more expensive than alternative options. Purchasing a used copy of the book, or using an online book rental program, will save you hundreds.

Find a Part-Time Job

Even if you’re a full-time student, you probably have some free time outside of attending classes, doing your homework, and studying for exams. Getting a part-time job is a great way to earn extra money and build your savings. If you can find a job on campus, it’s easy to work around your class schedule. But don’t be afraid to look for an off-campus job. Just be clear about your class schedule with your potential employer, and set realistic time expectations for yourself.

Develop a Strategy that Works for You

There are countless ways for a college student to save money. All you need to do is develop a strategy that works for you, and stick to it. We hope these tips will give you a good starting point to develop strong savings habits that will serve you well throughout your life. Place your new savings into an account with us – we love to help your money grow!

7 Surprising Costs of Buying a Home

Buying your first home is so exciting. It can also be a little nerve-racking. Here are some home buying expenses to consider before becoming a homeowner.

The Appraisal

An appraisal involves having an unbiased, professional appraiser determine the market value of the home. An appraisal helps ensure that you do not pay more for the home than what it is worth. This costs an average of $300 to $400, and should be factored into your budget.

Home Inspections

Not to be confused with appraisals, home inspections more closely examine the condition of the foundation, plumbing, roof, attic, appliances, electrical system, and more. An inspection will help you understand which future maintenance repairs to expect. The average cost of a home inspection is $325.

Closing Costs

While sellers pay most of the closing costs, buyers should expect to pay an average of 2% to 5% of the home’s purchase price in closing costs. This typically includes application and recording fees, flood certification (in some areas), taxes, and title searches.

Homeowners Insurance

If you rented prior to this, you may be new to homeowners insurance. It differs from rental insurance, as that covers your liability and personal items, while homeowners insurance also covers the physical structure of a home. The average cost of homeowners insurance in Iowa is $1,205.

Home Maintenance

The nice part of renting is not being responsible for home maintenance. The maintenance that comes with home ownership may require items like a lawnmower, gardening equipment, a ladder, and a snow blower.

Homeowners Association Fees

A homeowners association (HOA) is an organization that enforces rules and regulations for the properties and residents. Purchasing a property within an HOA’s jurisdiction will require you to pay HOA fees. The fees go toward maintaining properties and shared services among the community. HOA fees vary drastically, with an estimated average of $200 to $300 per month for a single-family home.

The Big Move

The move itself can be a significant expense, especially across state lines. Depending on the size and distance of the move, hiring professional movers may cost between $300 and $5,000.

Budgeting for these costs will allow you to have a realistic price in mind when house hunting. Our team offers great insight into our mortgage products. Discover more today!