Tag Archives: personal savings

The Latte Factor 101

latte factor

Making your way through the drive through every morning before 7:30 may give you a refreshing start to your day, but at what cost? The ideology that coffee shops and other retailers capitalize on is the notion that these small expenditures add a little excitement to your day without a hefty bill. However, when you enjoy perks like these on a daily basis, they add up, and quick!

Financial author, David Bach, is the mastermind behind the Latte Factor. This helpful calculator enables shoppers to see not only the cost of an individual purchase but the lost value it could cause for further investment as well.

For example:

If you purchase a $4.45 grande latte from Starbucks every weekday for the next thirty years, the total cost of your daily coffee is $34,786.29. However, if you had put that weekly $22.25 expenditure into an investment with an average earnings rate of eight percent or more, you could have made $109,225.02 in earned interest during that time. This showcases the true cost of a daily latte as the overall product expense ($34,786.29) + the lost interest ($109,225.02) = ($144,011.30)

While less than $5.00 a day may seem like chump change, compounding these expenses on a long-term level can showcase helpful savings opportunities to maximize your retirement savings efforts and limit unnecessary spending.

This equation doesn’t work just for coffee either! If you find yourself splurging for a fast-food lunch break, buying extra sodas at work, or even paying for a magazine you hardly read, you’ll soon find that all of those little expenses can make a big impact.

To help break some common splurging habits Iowa State Bank recommends the following:

  • Before making a purchase, ask yourself, “Should I spend these funds or should I invest them?”
  • Use free services like our Online Banking or Mint to visualize your spending and see areas where you can cut excess.
  • Remember the rule of 7. On average, invested funds will double every seven years, without any added contributions.
  • Utilize accounts like IRA, HSA, and 401(k) to maximize the dollars you invest and save.

If you have any questions on how to get started, or want to learn more about how to make your money work for you, our trusted personal lenders are here to help. Just stop by or drop us a line to set-up an appointment today.

What Your Teen Needs to Know About Money Management

Money Management

Throughout their teenage years, your children will begin to grow their personal money management style. Offer them some assistance by offering these four financial lessons from Iowa State Bank.

 

Securing Their First Job

No matter if it’s babysitting, lifeguarding, or bagging groceries, there are plenty of employment options for eager high school students. These opportunities typically start at minimum wage with zero benefits, but offer a foundation of experience and learning. Talk with your son or daughter, and help them select positions to apply for that resonate with them. Resources such as the Chamber of Commerce often list local job openings, and are a good place to comb for recent availabilities.

 

Managing Money

The younger you begin various habits, the better they stick with you. Teach your children the positive effect proper money management can have on their pocketbook. Start by opening both a savings and a checking account for your teen. Each pay period, help them figure ten percent of their earnings to put into their savings. You can also work with them one-on-one each month to help balance their checkbook and plan for any large expenditures.

 

Saving for College

Secondary education isn’t cheap. If your son or daughter plans on attending a college or trade school, the time to start saving is now! Work with your future student to determine an educational budget, providing an estimate of upcoming expenses. Once you know the amount needed you can set savings goals for both you and your teen to start tucking money away. The sooner you begin your savings journey the smoother the road will be to your target amount.

 

Making Payments

Whether it’s purchasing their first car or simply covering the cost of meals at school, learning how to maintain a payment plan is an important life lesson. Explain your personal bill paying system to your teen and see how they can tailor it to their needs. Once they have a grasp on the system itself, gradually add payments to your child’s list of responsibilities, even if you add the money to their account. This will help them learn to keep an updated payment calendar before they graduate high school.

 

Money management is a continual learning process. There are always new techniques or tricks to better arrange your finances. Don’t stop honing your teen’s money management after these four lessons – stop by Iowa State Bank and see how you can keep growing your family’s financial skills today!

 

10 Ways to Save Money in College

Save Money in College

10 Ways to Save Money In College

With delicacies such as ramen, easy mac, and PB&J, college doesn’t always seem as glamorous as it is in the movies. Learn how to build up your bank account this year with these helpful savings tips courtesy of Iowa State Bank! We’ll show you how to make the most of your dining dollars, classroom supplies, and other on campus opportunities!

  1. Books. Instead of purchasing those $300+ textbooks, utilize your university’s library and study using the same materials without any of the cost!
  2. Coffee. Get the best bang for your buck when you go for your next caffeine fix. Many coffee shops offer free wifi for studying in addition to free refills on basics coffee and teas. Simply purchase the size of your choosing, and stick around for a proper study session complete with all the coffee you need!
  3. Meal Plans. Dining dollars aren’t just for dinner. Utilize those additional funds to purchase other necessities such as toiletries to ensure you never leave any allocated dollars unused.
  4. Student Activities. Keep tabs on school events. With many university sponsored events offering free food or drinks, students tend to jump at the opportunity, so it’s best to arrive early!
  5. Scholarships. You never know until you try, or in this case submit, but in many cases writing a simple essay and answering some questions is all you need to do to be considered for a $500+ scholarship.
  6. Student Discounts. They’re everywhere; whether you’re on campus, or out and about, always be sure to carry your student ID to save a little extra money at various retailers.
  7. Loan Interest. Start paying off your student loans ASAP. Compounding interest especially can rack up additional expenses quickly, so be sure to begin paying down your debt as soon as you can.
  8. Cars. Ride your bike around campus instead of paying for costly gas, auto maintenance, and parking passes. During the winter months, you can skip waiting in the cold for the parking lot shuttle, and warm up as you cycle home!
  9. Recycle. Those pop cans and soda bottles can be valuable. It may not seem like a lot of money at first, but over time you’ll find yourself saving more and more.
  10. Work. Get a part-time job during the school year that offers great benefits like free gym membership, discounted meals, or free drinks!

Whether you’re a first year, or a PhD student, there are countless ways to save some green throughout your college years. Let us help you tuck away some of those valuable dollars with a structured savings account at Iowa State Bank!