Tag Archives: Spending

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. Iowa State Bank & Trust Company of Fairfield can also help you stay on track with a variety of banking products. Give us a call or stop on in today!

7 Items Worth the Splurge

Spending

When you make your savings plan, you often don’t think about the things you should spend extra money on. While scrimping on other items such as groceries or kids clothes could help you in the long run, there are some expenditures that could cost you in the future if you don’t pony up for the better option. At Iowa State Bank we suggest taking a second look at these seven products, and seeing if you need to upgrade the next time you buy:

Toilet Paper: You may not think it’s necessary, but let’s be honest; when you’re staying at a hotel that doesn’t have the good stuff, you notice. Household items such as toilet paper or garbage bags are bought to complete a task, and if they don’t complete it well or comfortably then it’s time to reconsider your options. We believe this product is worth the extra couple bucks, but we do recommend saving by buying in bulk!

Office Chair: If you’re like many Americans, you may spend a majority of your day sitting down. To avoid chronic back pain, and a slew of other ailments, we recommend investing in a comfortable and reliable office chair. If your employer is willing to pay for all or a portion of the chair, be sure to offer your measurements to be sure their options fit your height and weight specifications.

Mattress: Did you know you spend 33 percent of your life sleeping? For such a large portion of your time, you’ll want to be sure you’re getting the best sleep possible. Avoid those box store less costly options, and test out a few of the higher end options available in your budget. Not only can you sleep better, but you may find yourself spending less on coffee or energy drinks as well.

Pillows & Bed Sheets: While the mattress will make the biggest impact on the quality of your sleep, upgrading your thread count and purchasing the proper pillows can make a world of difference as well. Something as simple as changing the firmness of your pillow could help you sleep through the night more soundly.

Work Clothes: Sweats, shorts, and other home attire may not require the added expense, but the clothing that you wear to portray yourself at work should come across as professional while also remaining intact over time. We suggest finding one or two brands that fit both your budget and your style, and selecting key basic pieces to compile a wardrobe of endless combinations.

Garbage Bags: Do you enjoy it when you go to take the trash out in the early morning and just as you reach the bin, the bag breaks across your feet? No, neither do we. We agree that it is more than worth the extra dollar or two for the name brand bags that won’t break. Afterall, if the bag breaks, that means you’ll need to take a shower too!

Data Plan: Every cell phone provider seems to come out with a brand new plan option as soon as a new phone is released. While the choice of phone is completely up to you, we think that the data plan should cover not only what you think you’ll use, but some buffer room too. Instead of paying the expensive overage fees every time to go over your data limit, we recommend purchasing a more comprehensive plan to ensure you have a little extra space when you need it.

These seven things will prove their worth in the long run, and many items only require a one-time investment. If you have any other items you think we should add to our list, let us know on our Facebook page. We’d love to hear from you!

Which Subscription Service is Worth Your Money?

Personal Finance

The concept of subscription packages aren’t going away anytime soon! Offering the convenience of shipping, and the added surprise of finding out what’s inside, these clever subscription services keep you wanting more. With so many to choose from, how do you know which box is a worthwhile spend for your family? At Iowa State Bank, we’re excited to share our favorite options, and how they can help improve your budget:

Blue Apron: Out of all the make your own meal plans, this one by far stands apart! With plans as low as $8.74 per serving, these step-by-step culinary creations can not only help you eat better, but spend better as well! Reduce wasted money and food with their pre-portioned delivery system – and shipping is always free!

Bark Box: For all your furry friends, this box will have them waiting for the mailman every month! At $20 a month for a year long subscription, these fun-filled packages are stocked with nutritious treats and toys for your pup to enjoy. Check out their BarkShop page too, and see if your dog is a fit perfect for their Destroyer’s Club!

Dollar Shave Club: This popular grooming subscription is the perfect fit for men and women seeking a smooth shave. With options starting as low as $3 a month, this offer makes it simple to always have a fresh blade when you need one. If you do choose to upgrade, your product ships for free! Give it a try for a month, and adjust your shipments as needed, depending on how quickly you use the razors.

Birchbox: A traveling beauty bar for both men and women, this monthly subscription provides samples straight to your door for $10-20 each month. Complete with added membership pricing, and special offers, these little boxes pack a punch! If you discover products you simply cannot live without, simply go to their website, and select the full size version to purchase.

Raw Spice Bar: Eager cooks unite behind this affordable and delicious small batch spice subscription. Each month, they send professional and home cooks alike a mix of three regional spice blends. See how much you can grow your palette for only $8 a month!

Graze: Staying healthy can sometimes feel like a chore, especially while you’re working. Take the struggle out of hunting down those nutritious nibbles, and let graze do the shopping for you. For the low cost of $11.99 a month, you will receive 8 pre chosen snacks delivered straight to your home or office, and shipping is already included!

Gamefly: Video game addicts rejoice! Finally, there is a monthly subscription that allows you to play video games and rent movies at a low monthly cost! Starting at $15.95 you can rent one game each month with the option to return it at any time for a new game to rent. There are no late fees, and you can cancel at any time! Or for only $10 a month, you can live stream games straight to your home, 24/7!

Texture: No more magazine racks to clutter up your home, get the newest and latest news straight on your device with Texture’s digital monthly subscription. Offering the hottest magazines in every industry, this convenient service allows you to read the latest issue without the clutter of pages.

LootCrate: Allow your inner geek to celebrate for these gamer and movie centric crates! At a bargain of only $13.95 a month plus shipping and handling, these bountiful boxes offer one wearable item, a t-shirt, vinyl figure, comic book, household item, and utility item in every shipment! What are you waiting for? Sign up today.

Tasting Room: Nothing says relaxation like a satisfying glass of wine. Enjoy a bottle of your favorite flavors each month, through this interactive monthly tasting subscription. After the initial $9.95 tasting assessment of six personal-sized bottles, user are able to order wines to fit their personal tastes for approximately $15 a bottle.

Whichever box has begun to peak your interest, be sure to evaluate your family’s monthly budget to determine if it’s the perfect match for you.

Generational Financial Habits: Baby Boomers, Gen X, Millennials, and Gen Z.

Spending and Saving

When it comes to your spending habits, your age may influence your decisions more than you think! Depending on your generation, there may be some key patterns that differentiate you from your older and younger counterparts. Discover your key financial traits with this helpful guide courtesy of Iowa State Bank.

Baby Boomers

Typically classified as the savers of the modern age, many of those age 51-70 are known for tucking away funds as quickly as they can accumulate them. Many baby boomers were affected by both the Kennedy and Martin Luther King Jr. assassinations and hold strong sense of mistrust of the system. There are many in this generation who choose savings options outside of financial institutions. This large generation of approximately 70 million people, is currently in the process leaving the workforce and entering retirement. The most important item on their financial agenda is to save and secure funds for the decades of life they will enjoy outside nine to five.

Generation X

Often overshadowed by the large baby boomers ahead of them, generation X’ers tend to be strong willed and decisive, fighting for their share of the financial pie. Having been one of the first generations to experience divorce as a normal occurrence, many of those adults age 40-50 continue to look out for their individual financial wellbeing through strictly defensive tactics. Boasting on the highest education rates, this group makes strategic savings plans, constantly preparing for the ball to drop. They are best known for their cautious optimism and lofty financial goals.

Millennials

The current generation of twenty and thirtysomethings, were shaped by a highly digital world. Growing up in the age of computers and terrorism, these young adults believe that the typical American dream, may be slightly skewed. In many areas, home and car ownership is on the decline as more and more millennials strive to gain experiences over material possessions. Influenced by their parental counterparts, it is common to see this generation shying away from long term debt after seeing their parents succumb to missed payments and foreclosures during the 2008 economic crash. Couple that cautious initiative with crippling student loans and added inflation, where now today many college graduates are working multiple jobs to simply make ends meet.

Generation Z

The up-and-coming generation of the century, this group is the first age demographic to grow up completely immersed in digital technology. The days of cell phones and computers encompassed their childhood, and many of those age 0-20 have never known life without the digital realm. Still relatively young, these Gen Z’s take diversification to the next level, not trusting too much in any one entity. With advancing diagnostic systems this generation takes time and consideration into account before making any major life decision. As this generation ages, more experiences and choices will continue to shape their financial style.

No matter what generation you are a part of, there are a variety of ways you can improve your financial habits. Speak with one of our experienced personal bankers today, and we’ll show you how to get started!

Basketball Budgeting: Game Winning Financial Tips

Basketball season is in full swing and there are many comparisons to the sport that can apply to building your own personal budget. From knowing when to pass an expense, to hitting a three with an unexpected bonus, budgeting is a lot like basketball. Learn how to win at structuring your finances with this helpful game plan.

Brush up on your coaching.

Every team is built around the choices of its coach, just as your budget is. The coach selects the players based off merit, potential, and cohesiveness to create a well-rounded team structure. This coach represents you, you decide what direction your budget will take you, and if one piece isn’t working the way you desire it is your responsibility to make the change.

Recruit your team.

Every team has three key player types, centers, forwards, and guards. The center is going to be your all-around player, in the middle of all the action, just like your income. In your budget, this income is going to be after both taxes and your designated savings, this is your center player. Now those savings, giving you a financial buffer, are acting as your guard. Whether it’s a retirement savings, emergency fund, or personal investments, your guard player covers it all. Something additionally has to be driving your budget to financial success, and that is where your forward comes in. Spending is the determining factor to the successfulness of your budget. Just as in basketball, if no one takes the ball up the court there is no potential to score. By managing your spending, you create momentum through your forward player to move your money in a positive direction.

Keep your elbows in.

Every game comes with rules to keep the players safe, staying within these guidelines helps to protect you from receiving any unwanted fouls in the realms of finances.

Foul 1: Spending more than you earn. Penalty: Paying Interest and losing savings capabilities.

Foul 2: Not having a savings plan. Penalty: No structure for emergencies or retirement.

Foul 3: Carrying bad credit. Penalty: Added obstacles in gaining financial freedom.

Just as in basketball, practicing the fundamentals will push you to better your skills. If you work to create a successful budget based on what you can afford, your consistent monthly expenses, moderated spending, and a sound investment plan, you will be a winning coach in no time.

If you have questions on how to begin checking or savings account, give us at Iowa State Bank & Trust Company call today (641) 472-3161!