Jul 31, 2012

Make Your Summer Job Money Last!

Summer is a time for fun in the sun and—if you’re in high school or college—working to earn money for the school year. Everyone knows it’s easy to spend money—especially on fun summer activities. But saving money is a considerably more difficult. To get you started, here are some tips from Bank of Luxemburg:

Create a budget and stick to it. It can be intimidating at first, but knowing how much and where you’re spending your money will help you keep your finances under control and start good habits that will last throughout your lifetime. 

Make saving a habit. It’s a good idea to save a set percentage of every paycheck—automatically if you can. If you never have the money in your checking account, you’re less likely to miss it. Once you become accustomed to this practice it will become painless.

Carefully consider purchases. Before buying a non-essential item, sleep on your decision. You just might be surprised at how many things you decide NOT to buy.

Keep control of credit card debt. To help avoid future money woes, use credit cards only for emergencies and pay off the balance each month. Make sure all payments are on time to avoid penalties, late fees and interest. 

If you already have credit card debt, try the “debt snowball,” where you pay off small balance cards first. Once those balances are paid in full, apply the monthly money you were using to pay off that debt to the card with the next largest balance. 

Be selective when choosing bank accounts. Look for accounts that don’t charge fees and banks that charge reasonable fees for services you use. Don’t overdraw your account, and use bill payment services to eliminate postage stamps, envelopes and paper checks.

For more banking and saving tips listen to the Money Smart Podcast Network right from our website. 

Do you have any helpful tips? Let us know how you hold on to your hard-earned summer job cash!

Jul 25, 2012

The Importance of Saving

Does it ever feel like you’re treading water financially?  Getting ahead of the game—saving—can be difficult.  With some helpful information on how to save properly and the different avenues for saving, you’ll be on the right track to making “saving money” an attainable goal. 

Personal Savings Accounts & Certificates of Deposits (CDs)
To determine whether a personal savings account or a certificate of deposit is right for you, keep time horizons in mind.  Interest rates are lower with savings accounts, but you can take money out and put money in more liberally.  CDs, however, can be opened for terms varying in length from three months to five years.  Typically, the longer you invest your money, the higher the interest rate.  Therefore, if you keep your money in a CD for a prolonged length of time for your savings goal, you’ll reap a larger amount of money saved in the end.

Health Savings Accounts (HSAs)
If you’re participating in a high-deductible health insurance plan through your employer, you might want to consider opening a health savings account.  With a health savings account, you can save for your future health care costs and take greater control of how you are paying for medical expenses.  Typically, high-deductable health plans offer lower premiums compared to traditional medical insurance plans.  The money you are saving on premiums can be invested in your HSA. 

Individual Retirement Accounts (IRAs)
You might be participating in a 401k account through your employer, but you could be saving additional money for retirement by opening a Traditional or Roth IRA.  By speaking with a banker, you can go over your current 401k options through your employer, make sure you’re utilizing it properly (percents/matches/breakdowns), and consider if a Traditional or Roth IRA might be another option for you to save for your future.

The life stage you are currently in will help you establish the best savings plans for you as well.  Whether you’re single, married, married with children, or looking to retire, your financial situation is unique.  The best strategy for savings and investment goals will vary, so feel free to speak with a banker personally at any of our eight locations.

Bank of Luxemburg Chief Operating Officer Rebecca Edler provides tips for saving on Fox 11's Living with Amy