How to Create a Budget and Savings Plan

Piggy Bank and coins

It starts with a morning coffee or a quick lunch out. Maybe you want the newest tech gadget or video game. Before you know it, you have the item, but you also have more financial stress.

This is common scenario for many Americans. In fact, 71% of Americans report feeling stressed about money, according to a recent survey done by American Psychological Association. However, these simple budget strategies may help relieve stress and improve your finances.

Step 1: Know your Expenses 

Before you can create a budget plan, evaluate your personal money habits. For a few weeks, use text banking, online banking or your debit card records to track your spending. Once you know what you are spending money on, determine if those things are wants or needs.

A simple way to track these personal expenses is to take a piece of paper and write “wants” on one side and “needs” on the other. Wants are things you enjoy, but don’t necessarily need. Needs are essential items you need to live such as your rent or mortgage payment, food, water and clothing. Calculate how much you are spending in each column, then look for places to cut costs.

Step 2: Create a Budget Plan  

After you know all your expenses, evaluate your monthly bills and see where you can cut costs. One simple budget idea is to reduce the amount you eat out or order take-out. Instead, create a grocery list, plan your meals and cook at home. You may be surprised at how much money you save. To pinch a few more pennies, look for coupons on items you regularly purchase and buy off-brand items.

Another good way to save money is to change your phone plan or provider. If you signed up for 10GB of data per month and your phone company shows you only use half of that, change your plan and reduce your bill. You can also research deals other carriers offer a few times a year. Even if you only save $20 or $30 each month, those savings add up.

Another way to reduce financial stress is to budget the amount of money you spend on streaming or cable services. If you can reduce one or more streaming service every month, you can save a hundred dollars or more every year. You can also call your cable company and talk about ways to reduce your monthly bill.

Step 3: Make Saving Money a Habit

Once you know how much money you are spending and have created a budget, start saving. One way to save is to call your bank and set up automatic savings. In this case, the bank can schedule a recurring time to move your money to a savings account before you have a chance to spend it. Even if you only contribute $50 or $100 each month, these savings allow you to prepare for unexpected costs such as medical bills, car or home repairs.

Once you have started saving and have an emergency fund in place, you should consider long-term savings goals such as education funds for your kids or retirement accounts for yourself. It is best to meet with a wealth advisor to discuss these long-term investment options and how to plan for the future.

Just remember, it all starts with one small thing. Whether you brew your own coffee at home, bring your lunch a few days a week or cut one streaming service, every little bit helps.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  RCB Bank, member FDIC.

Sources: 2020 APA Stress in America Report

Connect with an RCB Bank Trust Wealth Advisor in your area.

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Understand your Retirement Plan

Chairs on a beach.

Saving for retirement can be overwhelming. This is especially true for the 44% of Americans who feel they aren’t on track to meet their retirement savings goals, according to a recent report by the Federal Reserve. So how can you improve your retirement savings? First, you need to know the difference between common retirement investment accounts. Once you understand your investment options, then you can meet with your financial advisor to create a financial strategy that works for you.

IRA vs. 401(k)

Almost anyone can open and contribute to an IRA. All you need is to be under 70 ½ years old and have earned income. Earned income includes wages, salaries, tips, commissions and nontaxable combat pay. One advantage of IRAs is they offer tax-free growth. Once you put money in the account, the dividends or growth of that money are not taxed in the future. In addition, IRA contributions are often pre-tax dollars, which means you can likely deduct them and lower your current tax bill. Traditional IRAs are taxed when you withdraw the money and you must start withdrawals at 70 ½ or there are penalties. IRAs also have lower caps on the total amount you can contribute.

There are several different types of 401(k) plans, including traditional, safe harbor, SIMPLE, Roth, and solo plans. All of these are investment accounts that allow employees to contribute a portion of their wages to retirement savings. If your workplace offers a 401(k) plan, you should contribute regularly. If they match your contributions, contribute up to the maximum match if possible. Don’t pass up free money for your retirement.

You may also contribute significantly more money to a 401(k) per year than to a traditional IRA. For instance, in 2020 the 401(k) contributions increased to $19,500 per year if you are under age 50 and $26,000 if you are over age 50. Traditional IRAs currently have $5,000 and $6,000 limits respectively.

Roth IRA and 401(k) Benefits

When you pay taxes on your retirement investments depends on the kind of account you choose. If you choose a Roth IRA or 401(k), your contributions are taxed when you put the money in, but withdrawals are tax-free. This is helpful in retirement, especially if you are on a fixed income. There are also conditions in which you can pull money out of your IRA and avoid the 10% early withdrawal penalty. This includes if you withdraw money because of a disability, are a first-time homebuyer or if the withdrawal is made by a beneficiary after your death.

Create an Investment Strategy

Once you understand the basic investment account options, it is time to talk with a wealth advisor. Your wealth management strategy should build sustainable income, diversify your portfolio of stocks and bonds and focus on growth that outpaces inflation. When you meet with a wealth advisor, explain your retirement goals and ask the following questions:

  • How is the account invested?
  • What is the expected return?
  • How long can the account produce that level of income?
  • Can we define how much is reasonable to withdraw from a retirement account?

 

Whether you are a customer or not, RCB Bank is here to help. Our wealth advisors can help with all of your questions about retirement investments. Give us a call at 855-226-5722 or visit RCB Bank here.

Sources

The Fed – Retirement (federalreserve.gov)

Retirement Plans | Internal Revenue Service (irs.gov)

When it comes to investing, there are risks. Consult a financial advisor before beginning any investment plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. The monthly interest calculation expressed above is not for any specific account type and is meant for generic illustration purposes only. Investment products are not insured by the FDIC. Not a deposit or other obligation of, or guaranteed by the depository institution. Subject to investment risks, including possible loss of the principal amount invested. Wealth advisors do not provide tax, legal or accounting advice. Seek advice of professional tax consultant.

We offer free portfolio reviews at no cost, no obligation. Connect with an RCB Bank Trust Wealth Advisor in your area.

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Create a Savings Plan

Three ways to save for the future.

create a savings plan

While most of us know saving money is a good idea, we often struggle to save for the future. Saving is not a one size fits all solution, but building a savings plan for your future is an important step to becoming financially independent. Talk with a wealth advisor about your personal goals. Your future self will thank you.

Build an Emergency Fund

Set a reasonable goal. Start by trying to save a small amount, such as $1,000. Don’t feel pressure about how much you are saving, just save something.

Take the next step: Track your spending and develop a budget. Do everything you can to stay within your budget. Little things will help you succeed, e.g., set up automatic savings with your bank, create a grocery list (and stick to it), cut coupons and save change.

Save for Education

Consider education investment programs. A traditional savings plan is good, but you also may want to consider an investment account.

Take the next step: Look up your state’s options for 529 plans or speak with a wealth advisor on interest-earning, tax-advantage plans. Some education plans allow you to use earnings on tuition and fees (including K-12 public and private), books, computer equipment and room and board.

Retirement Planning

Save today for your future self. There are four primary ways you can fund your retirement: personal savings (e.g., IRAs and investment accounts); Employer retirement plans; Social Security benefits and retirement income (rental property, part-time job).

Take the next step: Talk with a wealth advisor who can help you build a retirement savings plan and income strategy to maximize your savings.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Investment products are not insured by the FDIC. Not a deposit or other obligation of, or guaranteed by the depository institution. Subject to investment risks, including possible loss of the principal amount invested. Ask for details.

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Upgrade your life: Tips to get ahead financially

Lady holding bag of money and debt

I challenge you not to accept your financial life as it is. This coming year, aim to get ahead — start an emergency fund, build your retirement savings, pay off your debt or take control of whatever money situation is causing you stress.

The key to getting ahead is to get started. Here are some tips to help you make a financial change.

Invest in you

To build your wealth, start paying yourself first. When you receive money, before you spend a penny, put some of it in your savings account or retirement fund. Set up automatic deposits and watch your savings grow with little effort.

Changing your saving habits may require changing your spending habit, but the payoff – not worrying about paying your bills, taking a trip you’ve been dreaming of and retiring on your terms – is worth it.

Stop throwing money away

Paying late fees is like pulling money out of your wallet and throwing it into the wind. Start paying down debt, beginning with the highest interest debt. Pay your bills on time. If need be, call the company and see if you can adjust your due date. Never hurts to ask and it could save you from paying late fees.

Try the 50/30/20 budget plan

Harvard bankruptcy expert Elizabeth Warren suggests splitting your monthly income into three categories:

  1. Fixed expenses – survival needs – should total no more than 50 percent of your income.
  2. Non-essentials – wants like TV, morning coffee, hair appointments – should total no more than 30 percent.
  3. Savings – emergency fund, retirement – should be 20 percent or more.

Match your spending

Have a hard time sticking to a budget? Try this. Before you spend money on something you want, first put the same amount of money in a savings jar.  You will be able to see exactly how much money you are spending, or how much you could be saving or using to pay off your debt. If you cannot afford to match your spending, you cannot afford whatever it is you want to purchase.

Live within your means

Rich people stay rich by living like they are broke. It is a matter of what you value more, instant gratification or freedom from debt and having money when you really need it.

You work hard for your money. Do not waste it on things you do not really need.

50/30/20 Plan: Elizabeth Warren and Amelia Warren Tyagi. All Your Worth: The Ultimate Lifetime Money Plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. RCB Bank, member FDIC.
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Benefits of Online Banking

Convenience

Life often takes place outside business hours. Need to transfer1 money into your account before dinner? No problem. At a soccer game and need to make sure the electric bill is paid? Check it instantly. You can also avoid late fees and set up automatic, recurring bill payments2. To access these features, call your bank or ask your bank representative to sign you up when you open an account.

Security

Industry standard bank technology protects your money with firewalls, anti-virus protection, encryption, fraud monitoring and automatic logout, among other features. These create a strong defense against hackers who want to access your account. Scammers will also try to get information from you. Phone calls pretending to the be the IRS, emails claiming the bank needs your account information, charity scams, sweetheart scams and wire fraud are only a few of the culprits. Don’t give information to anyone unless you are absolutely sure they are legitimate.

Flexibility

The more time you save banking, the more time you can spend with your family, kids, friends or partner. Technology offers you the ability to customize your banking experience. If you only use your phone to check balances or make simple transfers, text banking3 is for you. Mobile deposit4 is perfect for those folks who need to deposit checks, but can’t make it into the bank. Depending on the bank, other services such as person-to-person5 payment systems and phone banking are also available.

Disclosures

1Funds may not be available immediately. 2Some fees and restrictions apply. Ask us for details. 3Message, data rates, and fees may apply. 4Message, data rates, and fees may apply. All accounts utilizing service must be enrolled in eStatements to avoid fee. Subject to eligibility and further review. Deposits are subject to verification and may not be available for immediate withdrawal. Deposit limits and other restrictions apply. Deposit limits and other restrictions apply. 5Available in the RCB Bank Mobile App. $1/transaction fee applies (non-refundable) and will be combined with the transaction amount. Transaction amount including fee is deducted from available balance immediately but may not settle on the same business day. Insufficient or Bounce fees may be incurred if adequate funds are not available at settlement. Funds may not be available to the recipient the same business day as transfer. Recipient must claim funds within 10 days. Fee is not refunded if recipient does not claim funds. Message, data rates, and transaction limitations apply. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Member FDIC.

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How to Stretch your Money

Look for areas where you can cut costs.

Reduce Expenses

It’s a good habit to annually review your monthly expenses, looking for areas where you can cut costs. Start by discontinuing unused memberships/subscriptions. Call your cable, phone and insurance companies and ask for options to reduce your bill. Compare prices of other companies or consider alternatives like pre-paid phones or streaming services. Reduce utility expenses by adjusting your thermostat a few degrees. Unplug electrical items when not in use and reduce the number of days you water the lawn.

Reuse Stuff

Use less. Save more. An easy start is to ditch disposable items. Clean with rags rather than paper towels or cleaning wipes. Use reusable water bottles and dishes instead of buying bottled water and paper plates. Look for creative ways to repurpose common household items. Save glass jelly jars or clear plastic containers to organize your kitchen, office or craft room items. Cut up your old t-shirts for cleaning rags. Grab those Easter eggs and use them as handy snack containers. Find more money-saving ideas online.

Rethink Spending

Rethink your purchase decisions. Start by making a list and sticking to it. Consider paying with cash. And bring only the cash you need, so you’re not tempted to splurge. Before grocery shopping, plan out your meals, check your cabinets for what you already have and buy only what you need. Use coupons and avoid impulse purchases. Choose off-brand items. They’re made the same but without an expensive label.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.

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Low Cost, Big Heart Gift Ideas

Get$Fit Tip: Stress less.

Hand holding heart

By Jocelyn Wood, RCB Bank

I stress over gift-giving.

I never know what to give people. I’m embarrassed when I can’t afford their wish list.

Holidays are a time for gratitude and fellowship. Gifts are to be an expression of joy and generosity, not a stress inducer. Definitely not a debt instigator.

If you fret over gift-giving, try one of these no stress, pay less ideas that won’t break your budget.

Low cost, big heart gift ideas:

“We give memories,” said Michelle Duhaime, Lawrence. “I bought 20 cans of silly string. I gave each grandchild two cans; told them Grampa was hiding somewhere on the property; and to go find him! Best $20 I have ever spent!”

“I follow a four-gift rule for my kids,” said Melissa Welchel, Oklahoma City. “Buy something they want, something they need, something to wear and something to read.”

“For families, we do group gifts, board games, homemade gift baskets, rather than buying for each individual,” said Welchel.

“I help someone with a project they’re working on,” said Kim James, Verdigris. “It means more than buying something they may not need or want.”

“We restrict ourselves to one store bought gift and we set a price limit,” said Stephen Taylor, Tulsa. “For friends, we make homemade goodies or gifts. People are happy getting it, and we don’t spend time agonizing over whether someone will like their gift.”

“We give money to our pastor to give to someone who could use extra help,” said Tara Depperschmidt, Stillwater. “We don’t want to know who it goes to; just that it goes to someone who really needs it.”

Invest in yourself.
RCBbank.com/GetFit

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

 

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Best Financial Advice

Get$Fit Tip: Sweat the small stuff.

Wise Monday Advice

There is a saying that wisdom comes from listening to advice, so I asked bankers to share the best money advice they have received and the impact it has made in their lives.

No. 1: Pay attention to your small expenses.

“Spend more time thinking about $20 decisions rather than $20,000 decisions,” shares Gregg Conklin, RCB Bank lender. “You’ll make $5, $10, $20 decisions daily. These add up. Learn to be wise in how you spend and save $20, so as you build wealth, you’ll be wise in how you spend and save $20,000.”

“I received this advice from a man who immigrated to the U.S. from Holland in the 1950s,” Conklin says. “He left Holland with $20 in his pocket and taught himself English by watching Saturday matinees. He eventually owned thousands of acres of ranch land, raising cattle in Kansas.”

No. 2: Invest in your future.

“Pay your obligations first, invest in your future second, indulge in non-essentials last,” shares Emily Dake, RCB Bank loan document specialist. “My grandparents taught me to see money as a tool that could guarantee future comfort. If I buy something, I want to walk away having gained something permanent such as knowledge, an experience or an asset.”

No. 3: Build an emergency fund.

“Build up a savings to cover at least three months worth of bills,” says Jessica Hamman, RCB Bank eServices. “After having ER surgery, I was without a paycheck. No savings and no paycheck can quickly put you behind on bills. It took three times as long to get caught up as it did to get behind.”

No. 4: Learn Rule 72.

Rule 72 will help you better understand the power of compounding interest over time,” shares Brad Ward, RCB Bank lender. “Take the number 72 and divide it by the annual rate of interest that your money is earning to determine the number of years it will take for your money to roughly double.”

No. 5: Pay yourself like a bill.

“Put money into a savings account directly from your paycheck so you don’t have time to spend it,” says Kim Harrison, RCB Bank loan assistant. “Since I started doing this I have been able to steadily save, and I was able to use part of it to buy my first house this year.”

No: 6: Start young.

“Early in my career, I was told about the value of saving now for retirement later,” says Jenna Louderback, vice president, eServices. “Putting that advice to work at a young age has paid off as I have watched my investments grow immensely over the years. Starting as early as possible has put me ahead of the game for my retirement plans.”

Invest in yourself. RCBbank.com/GetFit
You’re future self will thank you.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.
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No-Stress Savings Plan

2 ways to build your wealth with little effort.

Lady sitting in chair resting feet on piggy bank

By Jocelyn Wood, RCB Bank

You want to save more money.

The truth is you can save more money.

The struggle is you want things now. Waiting is hard. Saving money requires discipline.

What if saving could be easy?

Here are two ways to build your wealth that involves little effort.

1. Set the task on auto-drive.

Direct Deposit – Ask your employer to deduct a certain amount of money from your paycheck each month and transfer it into a savings or retirement account. When you receive a pay raise, transfer that to savings too. It’s called direct deposit, and the only discipline required is initiating the process.

While you may not think you have money to set aside, you do. When money is transferred before you see your income, you’ll soon forget it. You’ll adjust to living on the money you do see. And you’ll feel less stressed when you see your savings grow. Ask your company’s human resource department for details.

2. Set up auto savings.

Auto Money Transfer – Schedule an automatic money transfer from your checking account to a savings account through your online banking or mobile banking app. Set it up to recur monthly, or weekly for faster savings.

If you’re nervous, start with a small amount. Transfer the money into an account you don’t have easy access to, no debit card, no checks.

Not convinced you have the funds? Do this. Call your cell phone and TV providers, insurance companies and others and ask how you can reduce your bills. Schedule the differences you save each month to transfer to your savings account. You can set up an automatic transfer in 10 minutes or less. Ask your bank if you need help.

Saving money is a choice.

Choose to take control of your financial well-being. Then set the cruise control.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Member FDIC and Equal Housing Lender, RCB Bank NMLS #798151.
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3 ways to change your attitude about spending

Get financially fit

Ladies holding money on yoga mats

By Jocelyn Wood, RCB Bank

This is the year you’re going to take charge of your money. No more rationalizing overspending. No more excuses why you can’t put money into savings. No more regrets.

Everyone can save more money.

The question you have to ask yourself is what kind of life do you want? Do you want to be debt free? Do you want those new black leather boots? Do you want to retire comfortably? Do you want the newly released smartphone? Do you want to stop living paycheck to paycheck? Do you want your daily large caffe latte from your favorite coffee shop?

Saving money is a personal choice only you can decide, and making the commitment takes effort. It requires discipline and self-control, but the end result – more money in your savings, a larger down payment on a home or being debt free – is worth your diligence.

Here are three practical tips to help you change your attitude about spending and start thinking like a saver.

#1 Match your spending

If you struggle with sticking to a budget or tracking your expenses, try this: save an amount equal to whatever you spend on nonessential indulgences. If you want your morning java, put $4 in a jar. If you plan to eat lunch out, put $8 in jar. You will literally see your spending habits and potential savings.

If you can’t afford to save the matching funds, you can’t afford whatever it is you want.

#2 Remember you work hard

Before you spend your hard-earned money, take the cost of the item you want and divide it by your hourly wage. If you want a $90 pair of boots and you make $10 an hour, are those boots worth the nine hours of work?

Also, pay yourself first. That means put money aside from every paycheck into a savings or retirement account. Saving even $25 a month adds up. Set up automatic savings through a direct deposit or money transfer. You may surprise yourself how fast your savings grows when you put it on auto-pilot. Ask your bank for more information.

#3 Do not buy on impulse

Start thinking like a saver. Never purchase expensive items on impulse. Think over each purchase for at least 24 hours. During that period, do steps one and two. This will help you consider how necessary the item is that you want to buy. It will also help you have fewer regrets about purchases and more money for savings.

You don’t have to do it alone. Find someone who will help you stay on track of your savings goal. Check out AmericaSaves.org, a site dedicated to helping individuals save money, reduce debt and build wealth. You can take the savings pledge and set up text alerts to receive encouraging money saving tips targeted to your specific goal.

Also, ask your bank about products and services that offer money-management tools. Get financially fit and take charge of your money.


Photo Credits: Pam Brown and Cherise Saltmarsh
Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Member FDIC and Equal Housing Lender, RCB Bank NMLS #798151.
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A penny earned is a penny saved

5 money lessons from grandparents

Group of ladies smiling

By Jocelyn Wood, RCB Bank

Every year, my granddad would sit his grandkids down at the kitchen table and pour out a big jar full of coins he’d saved. We could have these coins but only after we sorted them, divided them equally and then rolled them. As little children, it felt like hours to complete this task, but the reward was a bag full of money.

When grandparents talk, we ought to listen, especially when it comes to money. They’ve lived a lifetime earning, spending and saving money. They can teach us a thing or two about the value of a dollar and the importance of saving for a rainy day. Here’s five lessons learned from grandparents.

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