Monthly Archives: August 2017

Why Your Child’s Allowance Should be Tied to Their Chores

allowance

There are literally thousands of how-to’s and self-help books for parents, but truly the only real way to learn how to raise a child is to do it! Luckily our growing team of parents at Timberwood Bank have some true hands-on experience when it comes to upbringing and explaining money management to little ones.

One of the most common fiscal questions parents have concerning their child’s financial education is, “How do I teach them about money using an allowance?” The simple answer is, however you want. There are a number of ways you can utilize a recurring allowance to help your children understand both the importance of good money management and a sound work ethic. Below are two of our favorite strategies:

Example #1: Earn Your Extras

In this scenario, allowances are guaranteed to an extent. Every two weeks give your child a pre-determined amount of cash, say $5.00. That money then has to be split evenly between their educational savings and their retirement savings (yes – retirement savings!) While this money is technically theirs for future use, they have no tangible money to immediately spend. Where the fun part comes in, is the commission. Assign a small dollar value to various tasks around the house. Ensure things like making their bed, or doing their homework are givens, and they are required to do them no matter what. However, extra work such as mowing the lawn, cleaning the bathroom, or cooking dinner, earn a predetermined amount of commission. Paid every two weeks, this commission is then there’s to spend between three areas, save, spend, and donate, but they MUST allocate at least $0.50 in each area. This lesson teaches three primary lessons; the first is housework is a part of everyday life and it doesn’t come with a paycheck. The second lesson is that working hard pays off, and the third is that creating a plan or budget for your money allows you to use it as a tool instead of using debt as a burden.

Example #2: Ambition Is Important

There is a viral story trending about a young boy whose allowance was determined by how many self-help books he read and wrote a report on. This simple lesson offers many variations and proves an important point on the dedication to values at a young age. For this example, there is no guaranteed allowance on a weekly or monthly basis. In this scenario, all funds are accumulated via commission. How that commission is earned is determined by you. This can be the number of extra assignments completed or the amount of successfully replicated YouTube tutorials. It could even be the quantity of miles your child is dedicated to running each week. Through this valuable learning experience, you can showcase to them that a solid work ethic is pinnacle to success, and can at times even out earn an education.

However you decide to help your children understand the complexities of personal finance, Timberwood Bank is here to support you. Stop in today, and ask about our designated children’s savings accounts. We’d love to help your family get started on their journey to financial success.

Money Magic Tricks

moneymagic

Magic is one type of entertainment that will never go out of style. Whether it’s David Blaine and his shocking stunts, or newly famous films such as Now You See Me, this classic art has proved to truly stand the test of time. While Timberwood Bank may not be the best at slight of hand, we do have a few savings tricks up our sleeves! See if you can understand the steps to these financial stunts and make your fiscal success appear out of thin air.

Make your money disappear (into your savings!)

Before you’re tempted to spend those hard earned dollars, we’ll show you how to make them vanish, and then reappear! By logging into your online banking, you can set-up recurring monthly transfers for a set amount from your checking to your savings. This way, your funds will get tucked away before you even knew they were there! The extra money saved can contribute to your retirement, education, or even an exciting getaway.

Cut your debt in two.

Tired of paying pesky credit card debt, a mortgage, or student loans? This helpful hack can show you how to saw that number in half, and potentially make it disappear. Financial talk show host Dave Ramsey has a proven method called Snowballing Your Debt. By continuing your monthly minimum payments, and using extra funds to “attack” one debt at a time, you can then rollover extra money from the fully paid loans into paying off the next biggest debt and then the next. Before you know it you’ll be debt free, and looking for another financial trick to master!

See double dollars on your retirement plan.

If you’re like most Americans and need to play a little catch-up on your personal retirement savings, this trick is sure to impress! To really maximize your saved dollars, we recommend diversifying your retirement accounts, by allowing one to be maintained by your employer (401k) and creating a separate account for you to contribute to on your own (IRA.) By automatically withdrawing money from your paycheck through your 401k, you can potentially invest MORE while having it managed through your employer. In addition to this, creating a dedicated IRA to store personal savings dollars in allows you to explicitly manage the growth of your continued contributions. Know what’s better than one retirement savings account? Two!

Pull extra money out of a hat.

Just like magicians, a good budget can help you find things you never knew were there – like money! Whether you’re using traditional methods like the envelope system, or more digital options like the YNAB, the end goal is still the same. To help you save even faster, you can couple your budget with additional savings tips and tricks on common recurring expenditures such as groceries, and you’ll see the savings in no time!

How to Create Better Habits

betterhabits

If you’re like us, starting a new diet, or working to exercise more often is more difficult than we initially planned. The same is true with many financial goals you may have. Saving for retirement, eliminating credit card debt, increasing your credit score; these are all things that take time and dedication to complete, but sometimes it’s hard to stay on track.

Luckily, Business Insider recently released an article that showcases just how it takes for your brain to form a habit. Surprisingly, it’s less than you’d think! It takes approximately 66 days for a consistent behavior to be added to your brain’s list of automatic actions. Thankfully, those 66 days do allow for some error. We’re all human, so there’s no need to be perfect during your trial practice. However, by committing to your new habit for 66 days or more, you can ensure that this new beneficial behavior sticks with you well into the future.

This new habit can be as simple as remembering to take the trash out, or as complex as maintaining a specified number of calories in a day. At Timberwood Bank we want to inspire you with some important financial habits to help you progress down the path of financial success. Take a look at these three examples, and don’t hesitate to ask our dedicated team members for help if you’re ready to begin your next 66-day practice round!

  1. Use the Envelope System: To help train your brain to only spend what you budget for, withdraw your total flex spending budget for the month. Then, divvy it up amongst your budget categories like food, entertainment, transportation, etc. After it’s been segmented, stick to your dollars, and only spend what you have in the envelope. No credit or debit cards to spend extra. If you can successfully make this a habit, you could see a large amount of extra savings which can then be used for vacations, retirement, or other savings ventures.
  2. Pay All the Bills Before They’re Due: Many habits appear easier than they truly are. In order to process this behavior into a habit, there are several steps you’ll need to repeat each month. To get started, make a calendar at the beginning of every month to mark the dates bills are due and for how much. Then, as the bills arrive, structure your payments to pay one at a time, leaving extra cushion in your account, should an unexpected expense arise. Using this recurring schedule, you can help yourself to get each expense paid before the designated due date. As an added bonus, an ongoing history of on-time payments may benefit your credit score too!
  3. Save for Retirement: This one is often a habit that takes longer than 66 days because there is no immediate reward for the effort you put forward. Later in life, your future self will thank you, for putting the time and savings away early on. The first step in this process to research your options. If your company offers a 401(k) and a match, that may be the first place you want to start. By automating payments from your paycheck, you can use pre or post-tax dollars to bolster your savings without the temptation of spending. Then, when you save extra money with your envelope system, remember to add those surplus funds into your retirement savings account to give it an added boost.

We love the three goals listed above, but that doesn’t mean you can’t create your own unique financial habits! If you’d like to get started on a new financial behavior, stop into your nearest branch today and speak with one our personal bankers. Our team at Timberwood Bank would love to help kick off your next 66 day habit!

The Best Advice from Today’s Entrepreneurs

entrepreneur

Sometimes finding the perfect idea for a new business can be easier said than done. Often you start by asking yourself a series of questions. Where is there a need? What can be created more efficiently? How can I solve a recurring problem? These are all great prompts to help you when looking for a concept your new business. To help inspire your next venture, Timberwood Bank would like to share some of our favorite quotes from several of today’s most influential entrepreneurs.

“Don’t quit, and don’t give up. The reward is just around the corner.” – Chip Gaines, HGTV’s Fixer Upper.

While Chip may add some much-loved humor to HGTV’s Fixer Upper, his ambition and work ethic are what help him and his wife Joanna, continue to succeed in both their real estate and retail ventures. This dynamic duo also proves that one business does NOT limit you to other opportunities. If you have a true passion for entrepreneurship, you can plant the seeds for multiple ventures so long as you tend to them as they grow.

“Sweat equity is the most valuable equity there is. Know your business and your industry better than anyone else in the world. Love what you do or don’t do it.” -Mark Cuban, ABC’s Shark Tank.

Mark Cuban started growing his businesses at an early age, showcasing that even a small idea can grow into something big. In 1990 Cuban sold his first computer consulting business for $6 million dollars to CompuServe. Not even a decade later, Cuban and business partner, Todd Wagner sold their new online audio company for nearly $6 billion dollars.  Cuban is one of the best examples of growing your earnings and turning a penny into a fortune.

“If you are successful, it is because somewhere, sometime, someone gave you a life or an idea that started you in the right direction. Remember also that you are indebted to life until you help some less fortunate person, just as you were helped.” -Melinda Gates, Bill & Melinda Gates Foundation.

Melinda Gates began her career as a programmer for Microsoft. Soon after she and Bill began to build the company, they decided to push their wealth into various organizations to help others around the world. While there are various tax write-offs that make this a helpful tool for any business, this gesture also allows the company to share its love and showcase its own values through these acts of generosity. The Gates family is a great illustration of not only how to generate success but also using that platform to help improve the lives of countless others.

“You don’t learn to walk by following rules. You learn by doing and falling over.” -Richard Branson, Virgin Group

Richard Branson is known for his cavalier lifestyle, passion for quality, and continuing desire to grow his expanding empire. While Branson may have begun his entrepreneurship in print, he soon expanded to international corporations and other industry diversification. His journey to wealth held its fair share of trial and tribulations, however, today his company, Virgin Group, oversees more than 200 companies, proving that early business lessons can eventually pay the best dividends.

“When I sat down to write about mistakes that have lead to my success, I had a much tougher time coming up with them than I would expect. Heck, I’m sure I’ve made hundreds of mistakes! Thing is, I often don’t look at them that way.” -Stephanie Izard, James Beard Award Winning Chef

Chef and entrepreneur Stephanie Izard knows that sometimes the best ingredient to a successful business is a good attitude. No matter how far her restaurants and industry successes take her, Izard is always seeking out new tricks and techniques to continue improving her business. Her efforts paid off in 2013 when she was awarded the James Beard title of Best Chef: Great Lakes, for her innovative work at Girl and the Goat. This culinary creator showcases the key indicator of a great entrepreneur, grit.

Whether you’re looking to start a restaurant or a software company, there are some key components you’ll need to get started. Our dedicated business bankers are here to help guide you through the entrepreneurship process and help you discover the best financing solutions for your upcoming venture. If you’re ready to get the ball rolling, stop by Timberwood Bank today!

Eat This Not That

Save Money

Like many Generation X’ers we grew into adulthood alongside this viral diet book, which showcased the epitome of dieting in the late 2000’s. Now a decade or two later, there are still some relevant tips and tricks we’re excited to share here. See how Timberwood Bank can help you switch up your spending, by eating THIS instead of THAT, to put some extra bang in your buck.

 

  1. EAT Dried Beans NOT Canned Beans: While many Americans are used canned beans as a pantry staple, you can save more than 50 percent when you take the time to cook with dried beans instead. According the Bean Institute, dried beans typically run about $0.15 per serving, with canned store brands bean coming in at $0.34 per serving, and your national brand of canned beans costing approximately $0.48 per serving. Additionally, if you cook your beans in a stock you can add additional flavor to your dish for only pennies per serving.
  2. EAT Bulk Sized Snacks NOT Pre-packaged Portions: When trying to pack a child’s lunch, or meal prepping for yourself, it can be easy to turn to those pre-packed time savers. However, if you’re looking to lessen your grocery spending for the month, we recommend buying your family’s go-to snacks in bulk. Great retailers such as Sam’s Club, Costco, and Amazon offer great bulk pricing to help your household reduce their monthly expenses.
  3. BUY Store Brand NOT Name Brand: Speaking of name brand, forget your brand loyalty and seek out the options that truly stretch your dollar the farthest. Great pantry staples like canned tomatoes, sugar, flour, stock, etc are consistently less costly than their national brand counterparts. Enjoy those extra dollars somewhere else in your budget, and see how much you can save off your grocery bill using this simple switch.
  4. EAT Bread & Butter Roast NOT Flank Steak: Although these two cuts come from differents parts of the cow, they do offer very similar tastes. The bread and butter roast runs typically a few dollar less, but is still just as tender and buttery when sliced thin. Both options offer a great beef taste, however when shopping for the entire family, this bread and butter alternative could save you several dollars per person!
  5. EAT Ground Pork NOT Ground Beef: Many people are familiar with ground pork when it comes to meatballs or brats, however, did you know you can supplement ground pork for beef in many other recipes? Something as simple as Hamburger Helper can be used just as easily with this more affordable alternative. If you purchase the ground pork unseasoned you can ensure it only has the flavors you and your family want, compared to it’s spicy italian sausage counterpart.
  6. EAT Frozen Pizza NOT Delivery Pizza: Often you can find a frozen pizza at your local discount grocer for approximately $3.33 each. However, if you choose to purchase from a national chain you could be paying as much as $10.99 for a medium pizza depending on  your brand. An added benefit of frozen pizzas is the sales cycle of many chains. If you wait until this frozen entree goes on sale you could snag them for as little as $2.50 each or less!
  7. EAT Frozen Fruits and Vegetables NOT Canned Fruits and Vegetables: Not only do these frigid foods save you money but calories too! While the canned items can offer more convenience, they typically contain syrup or oil to help keep the produce fresh. Avoid these extra calories and costs by purchasing the frozen option instead.
  8. EAT Whole Chicken NOT Rotisserie Chicken: This change-up is purely time related. You can cut the cost of your meal in half or more by taking the time to roast your own whole chicken at home instead of purchasing one which has already been prepared. While you may need additional ingredients such as olive oil, herbs, and spices, they come at a fraction of the cost, and can be used for countless other dishes in your kitchen. Not to mention you can make your own stock with the scraps!

 

We love cooking, and we can’t wait to hear how these tips and tricks can help your family succeed! Be sure to share your favorite success stories and recipes on Timberwood Bank’s Facebook page. We’d love to see which hacks have helped your household the most.