April was Financial Literacy month, but that doesn’t mean you have to wait another year to teach your children about managing money. Here are some tips to teaching your teenager how to start a budget they can stick to.
Smart money managers know exactly how much money they can count on coming in, and exactly how much money they need to spend on bills and day-to-day purchases. This way they know how much they can set aside to save for their bigger financial goals. And again, it all comes down to making a budget. By creating a budget you will see where all your money goes, decide if that’s how you want to continue spending it, and make a plan to buy the things that are really important to you.
The first rule of budgeting is spending less than you earn, and to do that you need to determine your income and estimate your required expenses, and your discretionary expenses. A teenager’s income may include a salary from a job, allowance, and birthday money. Expenses may be a cell phone bill, or gas money to drive to work and school. However, paying yourself comes first. This means putting money into a savings account on a regular basis. After you have subtract your required expenses from your income, you can use the money left over for your discretionary expenses, like clothes, pizza, video games, and other expenditures.
For a sample budget and a worksheet to create your own budget; and additional resources for parents and children about money management and personal finance visit http://www.mainecul.org/interior.php/pid/4/sid/14/tid/9.
-Jess H., Maine Credit Union League
Tuesday, May 25, 2010
Monday, May 17, 2010
Start saving for retirement now, so you won't worry about it later
There is a whole new group of College graduates getting ready to enter the job force, and even though they are stepping into an unsure job market there are steps they can take now to secure their future. A big part of that is starting to save for retirement, and while the idea of paying back college loans seems daunting enough, now is the time to start saving for retirement.
The College Board estimated that one third of students graduating with a bachelors degree have college debt exceeding $20,000. But time is on their side, the average 22 year old graduate has 43 years before retiring at age 65, 48 years if they work until age 70. Here are a few steps on how to start saving for retirement now.
1) Meet with a financial planner- They can help you examine your current finances including college debt and help you establish and plan long term goal for retirement, planning a family, traveling or even going to graduate school. You can find a planner near you at PlannerSearch.org*
2) Start saving for retirement now- Even if you can only save $5 a week, give some thought to investing in an IRA and make a plan on how to contribute to it regularly. And when you qualify for an employer 401(k) plan, try to contribute the maximum allowed, especially if your employer matches it.
3) Buy used- There are some times where spending more for high quality make sense, such as a good suit for job interviews. But why spend a ton of money to furnish an apartment when you can scour yard sales and thrift stores?
4) Create a budget- Make it a habit to track your spending weekly, whether you use paper or go electronic, tracking your budget is crucial.
5) Start and emergency fund- Have enough money saved to cover up to 6 months of basic living needs. You can start small by cutting back on your daily coffee trips and put the money in an interest-bearing account.
6) Get tax help- If your finances are simple you might be able to do this on your own. But as they get more complicated it’s a good idea to get help from a tax professional. They know how to spot ways you can save money.
7) Check your credit report- You can receive a free credit report from three main credit reporting agencies once a year to check for inaccuracies and I.D. theft. Don’t order all three reports at one time though, stagger them throughout the year to catch and problems.
8) Get insurance- Good news if your employer doesn’t cover your for health insurance, under the new federal health care reform law you can stay on your parent’s health insurance until age 26. But don’t forget about auto, rental insurance and disability insurance.
9) Check your investments- Meeting with a financial planner can help you examine your investment choices and make sure they still meet your goals.
10) Do your homework- Do you research on the economy, investments and savings options.
-Jess H., Maine Credit Union League
The College Board estimated that one third of students graduating with a bachelors degree have college debt exceeding $20,000. But time is on their side, the average 22 year old graduate has 43 years before retiring at age 65, 48 years if they work until age 70. Here are a few steps on how to start saving for retirement now.
1) Meet with a financial planner- They can help you examine your current finances including college debt and help you establish and plan long term goal for retirement, planning a family, traveling or even going to graduate school. You can find a planner near you at PlannerSearch.org*
2) Start saving for retirement now- Even if you can only save $5 a week, give some thought to investing in an IRA and make a plan on how to contribute to it regularly. And when you qualify for an employer 401(k) plan, try to contribute the maximum allowed, especially if your employer matches it.
3) Buy used- There are some times where spending more for high quality make sense, such as a good suit for job interviews. But why spend a ton of money to furnish an apartment when you can scour yard sales and thrift stores?
4) Create a budget- Make it a habit to track your spending weekly, whether you use paper or go electronic, tracking your budget is crucial.
5) Start and emergency fund- Have enough money saved to cover up to 6 months of basic living needs. You can start small by cutting back on your daily coffee trips and put the money in an interest-bearing account.
6) Get tax help- If your finances are simple you might be able to do this on your own. But as they get more complicated it’s a good idea to get help from a tax professional. They know how to spot ways you can save money.
7) Check your credit report- You can receive a free credit report from three main credit reporting agencies once a year to check for inaccuracies and I.D. theft. Don’t order all three reports at one time though, stagger them throughout the year to catch and problems.
8) Get insurance- Good news if your employer doesn’t cover your for health insurance, under the new federal health care reform law you can stay on your parent’s health insurance until age 26. But don’t forget about auto, rental insurance and disability insurance.
9) Check your investments- Meeting with a financial planner can help you examine your investment choices and make sure they still meet your goals.
10) Do your homework- Do you research on the economy, investments and savings options.
-Jess H., Maine Credit Union League
Wednesday, May 12, 2010
Are wedding bells in your future? Don’t forget to factor in finances!
June is traditionally the month of weddings. And in Maine, where there is only a short window of time when one could comfortably wear a wedding dress without needing a parka and snow boots, this is especially true! No matter when you decide to tie the knot, one thing is for sure- your “perfect day” doesn’t come for cheap! The Association for Wedding Professionals International estimates that the average wedding costs between $21,000 and $24,000. While it’s easy to get caught up in the endless details of choosing flowers, food, cake, shoes invitations…Don’t forget the big picture- nothing goes by as fast as your own wedding, and when it’s over, you will want to be happily married- not unhappily in debt.
You can cut back on some of the stress that comes with planning a wedding by starting you plans far before the big day. That will give you time to search out the best buys for your money, as well as to save up for it. You can start by opening a Club Account at a credit union- it’s an easy way to put money away, without feeling like you are making a huge sacrifice. And, while your busy planning your future with your spouse to be; don’t neglect to discuss your financial future as well. Whether you plan on keeping your finances separate or want to combine your assets, why not take the opportunity to start another lifelong relationship- with a credit union!
-Diana D., Maine Credit Union League
You can cut back on some of the stress that comes with planning a wedding by starting you plans far before the big day. That will give you time to search out the best buys for your money, as well as to save up for it. You can start by opening a Club Account at a credit union- it’s an easy way to put money away, without feeling like you are making a huge sacrifice. And, while your busy planning your future with your spouse to be; don’t neglect to discuss your financial future as well. Whether you plan on keeping your finances separate or want to combine your assets, why not take the opportunity to start another lifelong relationship- with a credit union!
-Diana D., Maine Credit Union League
Wednesday, May 5, 2010
What do pets and credit unions have in common? The link is loyalty!
Loyal, reliable, and furry. If you have a dog, you know that in that lovable package, you have a best friend who is always there when you need them. The same (minus the furry part) can be said of credit unions. More than being a safe and secure place for your money, credit unions are always there to help in times of need, from providing financial advice, to offering smaller loans to help you through difficult times.
Another way that your pet and finances are connected is that whether their needs are basic or they are treated like the king of the castle, pets cost money! Make sure to factor your pet’s expenses into your budget. Depending on the size (or appetite) of your dog, food costs can range from $250-700 per year! In addition, most dogs do not live on kibble alone- I know I wouldn’t want to have to explain a treat shortage to my dog Charlie! If vet bills are a concern, many credit unions offer Pet Insurance, making dealing those expenses more manageable.
So today, why not take a couple minutes to brighten your day? Give your pet a hug, and look into joining a credit union!
-Diana D., Maine Credit Union League
Another way that your pet and finances are connected is that whether their needs are basic or they are treated like the king of the castle, pets cost money! Make sure to factor your pet’s expenses into your budget. Depending on the size (or appetite) of your dog, food costs can range from $250-700 per year! In addition, most dogs do not live on kibble alone- I know I wouldn’t want to have to explain a treat shortage to my dog Charlie! If vet bills are a concern, many credit unions offer Pet Insurance, making dealing those expenses more manageable.
So today, why not take a couple minutes to brighten your day? Give your pet a hug, and look into joining a credit union!
-Diana D., Maine Credit Union League
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