Tag Archives: financial tips

Basic Banking Tips to Renew Your Financial Knowledge

financial tips

New year, new financial game plan. Renew your financial knowledge with fast facts of three financial topics that’ll set you up for a successful 2016, courtesy of Iowa State Bank & Trust.

Creating a Monthly Budget: How-To

  1. Categorize your expenses: Break up what you spend into obvious categories, like housing, food, auto, and personal. Then identify essentials from extras, starring the things you can’t live without and the one or two “extras” that add much-needed meaning to your life.
  2. Identify what’s earned, estimate what’s spent: You can’t budget if you don’t know what you’re working with. Nail down exactly what you bring in each month with income after taxes and other side sources of cash flow, and subtract from it an estimate of what you typically spend in 30 days. This allows you to see if you’re saving, breaking even, or coming up negative.
  3. Know where you’re going: If you have nothing you’re working towards, what’s the point of a budget? Pick a goal – paying off debt, buying a car – and rework your numbers from steps 1 & 2 to create a way to get there.

Understanding the Top 3 Bank Account Options

  1. Savings: Use this one to save money first and foremost. Make deposits and withdrawals, but writing checks may be off the plate. Check up on your monthly or quarterly statements of these transactions to stay in line.
  2. Basic Checking: Draw money for checks from this account. Typically, they don’t pay interest, and you may face an added fee for writing more than a certain number of checks each month.
  3. Certificates of Deposit (CDs): Also called “time deposits” because of the holder’s agreement to keep money in the account for a specified time (three months, six years, etc.). Money here can’t be touched during that time, but it’s rewarded with a higher interest rate. Drawback: there may be penalties for withdrawals before the maturity date.

Launching a Retirement Plan

  1. Know Your Needs: Your current age, expected age of retirement, amount currently in savings, and other factors are needed to determine how much you need to set aside. Check out a nifty retirement calculator for a rough estimate.
  2. Check Your Employer’s Plan: If your employer offers a 401(k) or similar plan, hop on it. Lowered taxes, matched contributions from your business, and automatic monthly deductions make savings a breeze.
  3. Start saving ASAP: Compound interest is a beautiful thing. Saving smaller for a longer length of time often yields more benefits than if you start saving big late in the game.

If any of these fields piqued your interest, our financial advisors at Iowa State Bank & Trust would love to help you learn more for a brighter new year!

5 Tips to Saving Like a Millennial

millennials financial tips

For those graduating in 2016, lessons have only just begun. 7 out of 10 Millennials face nearly $30,000 of debt before they’ve even stepped off campus, making the need for a financial education critical. Iowa State Bank & Trust suggests you pass on these five money-savvy lessons to a help secure a financially secure future for everyone:

  1. Spend like a student until you’re not paying like one. Some classmates may get a lucky break from the get-go, landing jobs with salaries that help them pay off their debt fast. Others hop into the workforce with a clean slate thanks to scholarships and grants that prevented debt. If you’re not in either camp, don’t spend like you are. When they’re buying new cars or moving to expensive cities, continue spending as frugally as you did in college until you can afford otherwise.
  2. Harness the power of compounding. Start saving ASAP. For a car, for a house, for retirement, it’s never too early to start setting aside a portion of your income for later. When faced with bracing against a monsoon of student debt, a consistent, small addition to savings can rack up big interest in the long-term.
  3. Take advantage of employer-sponsored plans. If your company offers a 401(k) or similar retirement plan, jump on it. Small, regular paycheck deductions create a consistent boost in your savings without the temptation of spending. Also, deductions reduce your taxable income, meaning less income tax is lifted from your paycheck.
  4. Cash isn’t always better than credit. Cash may help you limit splurge purchases and stick to a budget, but it can’t build your credit score. When it affects your ability to secure a loan, the interest rate you’ll pay on it, and at what credit limit, your score can’t be taken lightly. 35% of your rating is simply based on making your payment on time, so make monthly online purchases and grocery charges with your credit card so you can easily pay off your balance in full each month.
  5. You can’t learn everything online. Yes, the Internet gives access to tutorials and FAQs and budgeting programs that can help you manage your financials. However, it can’t fully replace the expert opinion of someone trained to diagnose and treat your unique financial ailments. Maintaining a relationship with a financial advisor is invaluable, as they walk with you through the peaks and valleys of your monetary journey and can guide you in the right direction.

If you have a younger loved one that could benefit from Financial Literacy 101, get in touch with one of our advisors at Iowa State Bank & Trust today.