Tag Archives: budget

Saving for Tuition 18 Years in Advance

tuition

After you get to see those little eyes open, it’s like a whole new world has unfolded before you. When you’re elbows deep in changing diapers, cleaning up whoopsies, and trying to sleep more than four hours a night, the last thing on your mind is college savings. At First Security State Bank we understand the chaos which ensues with each new addition to your family. To help you prepare for this upcoming transition, we’d like to help you find the best educational savings account for your little bundle of joy before he or she arrives!

There are two primary types of accounts when it comes to saving for your child’s ongoing education. Similar to retirement savings accounts, both of these options do require various stipulations when it comes to distributing the saved funds. Here we’ll show you the pro’s and con’s of each option, to help you better determine which option will suit you and your needs best.

The Coverdell Savings Account: This account option utilizes after tax dollars, which means there are no taxes on distributions when the funds are used for education. The account does have a nationwide $2,000 a year contribution limit, in addition to various income restrictions. While you and your spouse may manage and contribute to the fund, once the child turns eighteen, he or she will own the account and all the funds within it.  However, the child once of age, may only use the funds for education related expenses without incurring additional distribution tax.

The 529 Savings Account: This account option also utilizes after tax dollars, which again indicates no future taxes on distributions if the funds are used for education. The account does not have income limitations, however each state stipulates their own total contribution limit, typically ranging from $100,000 to $350,000.  For this account type, the physical savings account, and the funds within it, remain yours, only designated toward a specific beneficiary (which you can change up to once per year.)

Let’s compare the two when looking at national average college costs across the U.S.

If you choose to save using the Coverdell account option, suppose you save $2,000 per year for eighteen years, yielding a total of $36,000 of total out-of-pocket contributions. Add in the compound interest of those eighteen years, and you’ll find yourself with approximately $80,983 in total educational savings. Fun Fact: The national average for a year of in-state public college in the U.S. is $20,090 or $80,360 for a four year degree.

Alternatively, if you choose to save with a 529 account, you can save more than $2,000 per year, say $3,500 per year instead. Multiply those contributions by eighteen years, and you’ll have $63,000 in total out-of-pocket contributions. After calculating your compound interest into the equation, you’ve grown up to $141,562 in total educational savings. Fun Fact: The national average for a year of any college in the U.S. is $35,370, or $141,480 for a four year degree.

As you can see, both of these accounts allow you to make much more through the benefit of time and compound interest. Just like your retirement savings, the sooner you start contributing, the more interest you can earn. While the Coverdell allows you to give the account to your child, the 529 shows better savings opportunities, allowing you to maximize your potential interest.

If you’d like to learn how you can start saving for your upcoming chick-a-doo, stop by and speak with one of our dedicated personal bankers at First Security State Bank today! We’d love to help your family continue to grow!

Low-Cost New Business Ideas

Small Business

Creating a new business is an exciting journey filled with a constant flow of ups and downs. When deciding which industry to invest your time and money, consider these cost-effective options, courtesy of First Security State Bank:

Virtual Assistant: Needing a basic set-up of only a desk, computer, and phone, this affordable opportunity allows you to work from home, and establish your own hours. Start slow with one or two clients, and work your way up to a full-time schedule.

Medical Reporter: Quick typing skills and a high accuracy is all you need in this quick start-up. Speak with area hospitals and gain contracts for their on-location reporting. The higher your words per minute, the better!

Pet Groomer: Keeping dogs squeaky clean may sound like a lot of fun, but it can be tough work! With minimal startup costs, you can start your own service straight from home. By focusing your business on smaller dog breeds, you can minimize your cost, and maximize the number of clients you can maintain!

Freelance Writer or Photographer: Put your skills to use in this nomadic and highly flexible field. With an increasingly high amount of online publications, many magazines are searching for additional content and imagery to accompany them. Search the web for opportunities, and begin to build your digital content portfolio.

Event Planner: If arranging holiday parties and birthday celebrations sounds like fun to you, this could be your ideal career! Get started planning events for families and friends, and begin building your network of clients at each function. Once people start to see what you can do, you can begin to build your client list, and slowly fill your calendar with events and your pocketbook with revenue.

Wherever your passions take you, First Security State Bank will help you arrive safely! With our trusted business financing, we can help you and your budget stay on track. Stop by today to speak with one of our commercial lenders, and discover how to create your ideal cash flow.

How You Could Lose Money When You Move

Moving

Moving across town or across the country takes a lot of time and careful planning. Everything from packing up beforehand to timing out the closing on your past and future homes. Before you begin your next big move, be sure to look out for these common extra expenses and how you DO or DON’T want to handle them.

DO: Box up your belongings and have professional movers pack them into the moving truck.

DON’T: Rent a do-it-yourself to save money.

In this scenario, you run a much higher potential risk of damaged furniture and other valuables when items are packaged and shipped incorrectly. However, if you box them yourselves and hire a professional moving crew, they will typically insure your goods up to a specific dollar amount to be sure your home goods are safe and secure.

DO: Ask your local grocery store or discount store for unwanted boxes.

DON’T: Pay for cardboard boxes.

The only thing more expensive than moving, is preparing to move. Instead of using your valuable funds for room specified boxes, reach out to local businesses and offer to take their surplus boxes away for free!

DO: Pack one room at a time.

DON’T: Procrastinate packing.

Denying the increasing deadline of the move will only make packing that much worse when you realize it must be done. Instead of taking two weekends of 24-hour packing, designate a timeline of which rooms you want packed by what dates. This way you can stay on track without having to tackle the entire home at once.

DO: Research the costs associated with your new potential city.

DON’T: Move for a career where you will make more, but your expenses may skyrocket.

Many expenses, such as housing or groceries, here in the Midwest are relatively affordable compared to other areas of the country. If you and your family are planning to move across the nation, or just across the state, make sure to check the average expenses for the area. Although a new job may offer additional pay or benefits, the expenses of the area may be more than your current household budget in the Midwest. Always take this into account before fully committing to a move.

Wherever your next home takes you, First Security State Bank is here to help! Speak with one of our experienced mortgage lenders to see what your home value could mean in other areas!

 

Winning with Basketball Budgeting

Basketball Budgeting

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 has to be driving your budget to financial success, and that is where your forward comes in. Spending is the determining factor in the success 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.

Basketball Budget

If you have in questions in how to begin a savings or checking account to help get the ball going, give us a call today!

Four Overlooked Expenses You Are Leaving Out Of Your Budget

To have an accurate budget, it is necessary to include every expense, no matter how small.

To have an accurate budget, it is necessary to include every expense, no matter how small.

Budgeting is an important part of finding financial stability. While many people use a budget, they often forget to factor in all of their expenses. A new year is a good time to re-evaluate your budget to make sure you aren’t forgetting any of these categories.

1. Subscriptions/memberships

While it is easy to remember major costs like rent and utilities, small monthly costs are often overlooked. To budget for an annual subscription or membership, divide the total cost by 12 and set aside that amount of money in a separate category each month.

2. Gifts/special occasions

Since you can always anticipate when special occasions like birthdays, holidays, and anniversaries will be, it is easy to budget for them. Add up your yearly special occasions and divide the total by 12. Take into account the expense of the presents as well as the cost of any special dinners or parties.

3. Fun Money

To keep your budget from feeling like a restriction, it is important to treat yourself too. Something as small as a fancy coffee drink once a week is a good treat! Allow yourself a certain amount each month that can be spent however you please. This will not only relieve you of guilt but also makes it easier to stick to the budget in other categories.

4. Home repairs

While some home maintenance costs are annual and easy to budget for, many repairs are unforeseen. Set aside a certain amount each month to cover any surprises as they arise.

If you have a hard time sticking to your budget each month, make adjustments. Look for areas where you are spending that aren’t included on your budget.  If you are spending any amount of money on something, it should be included. For more budgeting advice, stop in to see your friends at First Security State Bank. Stop by either our Cedar Falls or Evansdale locations today!

How to Stay out of the Red on Black Friday

Black Friday is the biggest shopping day of the year. But there are different tricks you can use to keep from overspending.

Black Friday is the biggest shopping day of the year. But there are different tricks you can use to prevent overspending.

Most of us can’t resist a good sale. Black Friday, the day after Thanksgiving filled with massive sales from retailers nationwide, is still on the rise with its popularity.  Almost 250 million people visit stores on Black Friday, with another 130 million shopping online on Cyber Monday.

These big sale days are actually a great time to get holiday shopping done or at least started, but how do you resist the temptation to buy more than you should?

One word: BUDGET.

Here are a few savings strategies for those committed Black Friday shoppers this year:

  • Find savings before hitting the store- sit down with a newspaper, look at deals on the “official” Black Friday website or download the Black Friday app!
  • Compare ads- the first price you find for an item may not be the lowest, so be sure to peruse the ads for lower prices.
  • Make a specific list for each store- find what you want and buy ONLY those gifts. Map out your route based on store hours and locations.
  • Use cash- if you absolutely can’t resist the urge to overspend despite doing all the above strategies, use cash.  Figure out the total amount you want to spend, get that amount in cash, and leave your debit or credit card at home to avoid going over the limit. Don’t forget about the money deposited from your Christmas Club Savings account in October!

Many serious Black Friday shoppers have developed creative ways to save. Hopefully whichever strategy you use will help you to spend smarter and actually save money.

Most importantly, First Security State Bank wants you to stay safe this Black Friday. Drive carefully, park in well lit and populated areas and don’t leave purchased items in plain sight in your vehicle. We hope all goes well and look forward to seeing you soon in our Cedar Falls or Evansdale locations!

8 Steps to Building an Emergency Fund

Ensure your financial future with tips from First Security State Bank

Ensure your financial future with tips from First Security State Bank


“Hope for the best, prepare for the worst.”
As we go through life, circumstances present themselves that are impossible to predict. Death, divorce, illness, and natural disasters all come as a shock to people every day. These are not always the most pleasant situations, but they must be dealt with in a rational and thought out manner. One of the best ways to prepare for a financial crisis is by having an emergency fund set up and ready to turn to at a moment’s notice. First Security State Bank has eight ways to build an emergency fund in the case of a financial crisis to help you get started:

  1. Start a savings account with the intention of saving up to three months’ worth of living expenses. An emergency fund with three months of support will allow you to get your feet on the ground in the event something terrible does happen.
  2. To start saving successfully, create a budget to track where your money is going and coming from. A budget will not only force you to spend less, but it will draw your attention to where your hard earned money is going and possible areas where you could save more.
  3. Organize your bills, banks statements, pay slips, and any other financial documents. Put them in a filing cabinet for easy access to ensure you make all payments on time.
  4. When going through your bills, take note of areas where expenses can be cut. Get your monthly expenses as low as possible and put the remaining money into the emergency fund.
  5. Do the little things that add up. Turn off your air conditioning when you are not home and shut off lights in unused rooms.
  6. Take time to plan out healthy meals to make at home instead of eating out. Pinterest offers fun and creative meal ideas that can be made for one or a family of five. Pack lunches for work or school and take coffee from home.
  7. Keep up on home and car maintenance. It’s cheaper to replace one part then an entire car, and to replace a couple boards rather than have the entire house tented for termites.
  8. Keep your health in check. By eating healthy and exercising now, you will avoid health issues down the road that can be dangerous and expensive.

These are all ways to save that can be incorporated into your everyday life. By taking action now to build an emergency fund, you will be better prepared when the unexpected occurs. First Security State Bank believes it is never too late to start smart saving habits. Serving the Cedar Falls and Evansdale areas, we are here for you!