Tag Archives: spending

The Latte Factor 101

latte

Making your way through the drive through every morning before 7:30 may give you a refreshing start to your day, but at what cost? The ideology that coffee shops and other retailers capitalize on is the notion that these small expenditures add a little excitement to your day without a hefty bill. However, when you enjoy perks like these on a daily basis, they add up, and quick!

Financial author, David Bach, is the mastermind behind the Latte Factor. This helpful calculator enables shoppers to see not only the cost of an individual purchase but the lost value it could cause for further investment as well.

For example:

If you purchase a $4.45 grande latte from Starbucks every weekday for the next thirty years, the total cost of your daily coffee is $34,786.29. However, if you had put that weekly $22.25 expenditure into an investment with an average earnings rate of eight percent or more, you could have made $109,225.02 in earned interest during that time. This showcases the true cost of a daily latte as the overall product expense ($34,786.29) + the lost interest ($109,225.02) = ($144,011.30)

While less than $5.00 a day may seem like chump change, compounding these expenses on a long-term level can showcase helpful savings opportunities to maximize your retirement savings efforts and limit unnecessary spending.

This equation doesn’t work just for coffee either! If you find yourself splurging for a fast-food lunch break, buying extra sodas at work, or even paying for a magazine you hardly read, you’ll soon find that all of those little expenses can make a big impact.

To help break some common splurging habits Milledgeville State Bank recommends the following:

Before making a purchase, ask yourself, “Should I spend these funds or should I invest them?”
Use free services like our Online Banking or Mint to visualize your spending and see areas where you can cut excess.
Remember the rule of 7. On average, invested funds will double every seven years, without any added contributions.
Utilize accounts like IRA, HSA, and 401(k) to maximize the dollars you invest and save.

If you have any questions on how to get started, or want to learn more about how to make your money work for you, our trusted personal lenders are here to help. Just stop by or drop us a line to set-up an appointment today.

Nature v. Nurture: The Psychology of Spending

Psychology of Spending

If you’ve ever taken Psychology 101, you’ve probably heard the argument for nature v. nurture. In this multi-century discussion, psychologists have debated whether a person’s genetics or environment make a greater impact their personal behavior. At Milledgeville State Bank we’re excited to share our take on this timeless debate, and share how nature and nurture affect your spending habits.

The financial traits which we see as more nature based are:

None

Are you surprised? Contrary to many personal opinions, financial lessons and preferences are 99.99 percent teachable. This concept is backed by an interesting study in which children were given one marshmallow immediately, but were given another if they could occupy themselves until the tester returned to the room. Researchers found that the kids who were able to wait to receive the second marshmallow went on to have more successful ACT scores and other measurably improved personal relationships. This information is particularly interesting due to the fact that delayed gratification is a skill, which can be taught from a young age.

Delayed gratification is one of the initial skills learned for financial education in the form of savings. For this reason, it is practical to begin a child’s understanding of finances with this particular task, however, there are many other aspects of managing your money that can be tied to these initial skill sets as well.

The financial traits which we see as more nurture based are:

Whether you prefer to save or spend.
The specific items you enjoy saving or spending for.
Your skillset for prioritizing tasks and expenses.
The desire you have to compare yourself to others.

While the list of nurtured traits could go on for miles, the important fact is that like any other skill, fiscal education can be learned through practice and continued repetition.

If you want to grow your personal financial skills set, we recommend starting with a household budget and saving plan. By committing to these two monthly activities you can start to build a foundation of learning to ensure you are adhering to the best financial practices. As you grow your understanding of finances, adding in a retirement savings plan and debt repayment schedule can be valuable steps to gaining your financial freedom.

To start teaching your child these valuable lessons, we suggest great activities (like these) to help them understand the value of waiting. Simple games such as Mister Noodle can provide valuable comprehension for your child early in life.

Generational Financial Habits: Baby Boomers, Gen X, Millennials, and Gen Z.

Spending

When it comes to your spending habits, your age may influence your decisions more than you think! Depending on your generation, there may be some key patterns that differentiate you from your older and younger counterparts. Discover your key financial traits with this helpful guide courtesy of Milledgeville State Bank.

Baby Boomers

Typically classified as the savers of the modern age, many of those age 51-70 are known for tucking away funds as quickly as they can accumulate them. Many baby boomers were affected by both the Kennedy and Martin Luther King Jr. assassinations and hold strong sense of mistrust of the system. There are many in this generation who choose savings options outside of financial institutions. This large generation of approximately 70 million people, is currently in the process leaving the workforce and entering retirement. The most important item on their financial agenda is to save and secure funds for the decades of life they will enjoy outside nine to five.

Generation X

Often overshadowed by the large baby boomers ahead of them, generation X’ers tend to be strong willed and decisive, fighting for their share of the financial pie. Having been one of the first generations to experience divorce as a normal occurrence, many of those adults age 40-50 continue to look out for their individual financial wellbeing through strictly defensive tactics. Boasting on the highest education rates, this group makes strategic savings plans, constantly preparing for the ball to drop. They are best known for their cautious optimism and lofty financial goals.

Millennials

The current generation of twenty and thirtysomethings, were shaped by a highly digital world. Growing up in the age of computers and terrorism, these young adults believe that the typical American dream, may be slightly skewed. In many areas, home and car ownership is on the decline as more and more millennials strive to gain experiences over material possessions. Influenced by their parental counterparts, it is common to see this generation shying away from long term debt after seeing their parents succumb to missed payments and foreclosures during the 2008 economic crash. Couple that cautious initiative with crippling student loans and added inflation, where now today many college graduates are working multiple jobs to simply make ends meet.

Generation Z

The up-and-coming generation of the century, this group is the first age demographic to grow up completely immersed in digital technology. The days of cell phones and computers encompassed their childhood, and many of those age 0-20 have never known life without the digital realm. Still relatively young, these Gen Z’s take diversification to the next level, not trusting too much in any one entity. With advancing diagnostic systems this generation takes time and consideration into account before making any major life decision. As this generation ages, more experiences and choices will continue to shape their financial style.

No matter what generation you are a part of, there are a variety of ways you can improve your financial habits. Speak with one of our experienced personal bankers today, and we’ll show you how to get started!

What’s Your Spending Style?

Personal Spending

Everyone spends and saves differently. There are spending personalities on all ends of the spectrum that range from extreme spenders to tireless penny pinchers. Discover what type of spender you are with this helpful quiz courtesy of Milledgeville State Bank.

What’s your typical lunch during the workweek?

A: A packed lunch, typically leftovers from the night before.

B: A variety of prepared lunches from home and a handful of take out meals throughout the month.

C: I usually grab something from one of the local restaurants during my lunch break, occasionally I’ll bring something from home if it was really good.

D: I can’t get through the day without my latte in the morning, and a solid lunch out of the office in the afternoon.

How important is your credit score to you personally?

A: I live and breathe by this number, it influences almost all of my buying decisions.

B: I check my credit every month, it’s important to know where you stand.

C: I have a general idea where I’m at, but it’s not the first thing on my mind.

D: What’s a credit score?

If you want something that is $3,000 but you only have $1,500 available funds in your account what would you do?

A: Wait until I can save the additional $1,500 I need before purchasing it.

B: Compromise on a similar item that only costs the $1,500 I currently have.

C: Purchase the $3,000 item, paying $1,500 up front, and putting the rest on credit.

D: Purchase the $3,000 item and put it all on credit.

What does retirement savings mean to you?

A: Roth IRA, 401(k), stocks, bonds, and personal savings.

B: Using my work benefits along with personal savings.

C: I think I get something for retirement through my place of employment.

D: Something I don’t have to worry about until I’m older.

When you see an exciting impulse buy, how do you manage the situation?

A: I remind myself I’m here for these 5 items and nothing else.

B: I remember I already bought a small impulse buy yesterday, so this one could potentially harm my budget.

C: I made it through the work day today, I deserve this.

D: I already have 4 other things I wasn’t expecting to buy, what’s one more?

If most of your answers were [A] then you are a Penny Pincher: For you, finances are the key to your existence. All aspects of your financials are crafted into a strategic plan to make the most out of your various savings accounts. You’re the first to suggest a restaurant based on cost, and the last to splurge on a large purchase. Typically you’re also the person other family members typically ask for well-rounded financial advice.

If most of your answers were [B] then you are a Balanced Budgeter: In your world, the life of a budget doesn’t have to centered around a hunker down mentality. A budget is a fluid medium that is meant to be customizable to you and your needs. Occasionally an added expenses or unforeseen purchase is needed or warranted, but overall, you ensure you and your family stay on track with a well thought out financial plan.

If most of your answers were [C] then you are a Cautious Creditor: Although much of your financial expertise is based on credit card rewards, and other point benefits, you do care about your money management. While not all your choices are made to help boost your savings, there are certain measures you take on a continual basis to help push your financial goals forward.

If most of your answers were [D] then you are a Debt Developer: Often times you spend more than you intend. Between check-out line snacks, and lunch time splurges, your bank account just tries to keep up. Understanding your financials isn’t necessarily first on your list of priorities, but there are certainly some things you know you could improve. You appreciate the things you purchase and genuinely enjoy the experience of shopping.

No matter what type of spender you are, Milledgeville State Bank is here to help you succeed. For everything from setting up savings accounts, to consulting on wealth management, we have everything you need to continue your financial success. Give us a call at (815) 225-7171 or stop by today to get started!

Great Last-Minute Gift Ideas for the Holidays

Time, energy, and funds are running low by this point of the holiday madhouse – what are you going to do for those last names on your gift list?

Our team at Milledgeville State Bank has assembled a gift list that shows you poured serious thought into your giving and looks like you invested more financially than you really did. Check out these last-minute gift options that are both personal and wallet friendly.

Tap the App store: If you like fast and direct options, give your recipient a few new apps from the Apple App Store. You can send right from your personal device by choosing the “Gift This App” option to deliver it to another’s iPad, iPhone, or iPod in a matter of moments. Drawback: Android doesn’t have this option yet, so make sure their device is IOS compatible.
Compile a memory bucket: The aim is quantity over quality for this $5-$10 option. Load a creative with snacks and trinkets that commemorate your relationship. Dollar stores, bargain bins, and thrift stores will be your best friend as you pad this sentimental gift.
Personalize a mug: With a Sharpie and a blank mug, you can create a one-of-a-kind gift for under $5. Adding a favorite quote or your embarrassing nickname for them creates a gift they couldn’t find anywhere else. Before you wash or present it, just slide it into the oven to bake for 15 minutes at 400 degrees to seal it on. Bonus points if you stuff the mug with packets of their favorite hot drink.
Whet Their Appetite for a Dinner Date: Anybody can snap up a gift card, but not everyone can give the promise of actually using it. Give the gift of a dinner date with a symbolic item promising they can redeem it for the real thing with you later. Do they love barbecue joints? Wrap up a bottle of their favorite sauce. Are they a fan of that Thai place down the street? Gift a jar of gourmet peanuts. They’ll love the excitement of a two-part present.
Where you met: Remember where you and your loved one first met? They probably do, too. Commemorate it with an inexpensive memento of that location. If it’s a coffee thermos from the café or a homemade pendant of the city where your paths collided, they’ll remember the launch to your relationship every time they use it.

You don’t need to break the bank or agonize for days to make your gifts matter. For an extra hand allocating your cash wisely, give our financial advisors at Milledgeville State Bank a call!

Is the Five Category Budget “Just Right” for You?

If you are looking for a budget that is organized, but not too restrictive, try the Five Category Budget.

We have all heard the story of Goldilocks. She always wanted something that was in the middle or “just right”. But who knew that the Goldilocks rule could apply to budgeting? Budgets like the 50/30/20 budget may be too structured but the 80/20 budget can often feel too broad. If you don’t want a budget that represents a broad overview of overall spending, the Five Category Budget may be “just right” for you.

Housing

This category should comprise of 35 percent of your take home income. It includes mortgage or rent, home repairs and maintenance, property taxes, utilities, and homeowner’s or renter’s insurance. Simply put, include every housing-related expense.

Transportation

This should only take up 15 percent of your take home income. Include car payments, gas, car insurance, repairs and maintenance, parking payments, and public transportation tickets.

Other living expenses

These are primarily discretionary expenses and should take up 25 percent of your income. This category includes eating at restaurants, concert and sporting event tickets, new clothes, and vacations.

Savings

Your savings should consume 10 percent of your budget. Build up an emergency fund with three months’ worth of living expenses first then start saving for retirement.

Debt Payoff

This should include credit card debt and student loans. It does not include your minimum mortgage or car payment because those are listed under the housing and transportation categories. If you are paying more than the minimum, include the extra payment cost in this category. Debt payoff should consume 15 percent of your income.

Milledgeville State Bank always recommends a budget as a map for your finances. But if you don’t think that a detailed line-item budget is right for you, the Five Category Budget may be the solution. For more advice about saving and budgeting, stop by Milledgeville State Bank.

Dating on your Dime

Love doesn’t have to come with a big price tag. There are plenty of unique date ideas that work for any budget.

Did you find someone under the mistletoe this year? If so, your budget might need to be adjusted a little bit in the coming year. Dating can be expensive, especially for men. It may seem old fashioned, but a NerdWallet survey found that 77 percent of people believe men should pick up the tab on a first date. As a relationship develops, the costs generally split more evenly. Check out some of these ideas to keep the cost of romance low.

Skip the dinner and movie date

Although a dinner followed by a movie is a traditional first date idea, there are more creative options that are easier on your wallet. There are other ways to get to know someone such as an outdoor concert, community event, or free museum trip. Check out the local paper to find some new ideas!

Stay in

While this may not be appropriate for the first date, staying home to cook together is a nice way to spend time together and get to know each other better in a natural setting. Staying in and renting a movie rather than going on the traditional restaurant and movie date will save your wallet.

Get Active

One of the best dates to get to know someone can cost as little as $5. Take a walk around a local fair or scenic part of town with coffee or juice. This allows you to have uninterrupted conversation to get to know each other while getting some exercise. If you head to a park, you can pack a picnic lunch as well!

If you have found someone you care for, it is important to keep talking after you get past those initial few dates. Spending, saving and long-term financial goals often cause turmoil in otherwise happy relationships. Having an open dialogue about these issues is important to make sure you stay on the same page.

Dating isn’t always cheap, but it can be! While we may not be able to offer much love advice, Milledgeville State Bank can help you find ways to save. Stop by our office or contact us online today!

Inexpensive Gift Ideas For Everyone On Your Nice List

Buying gifts for everyone you care about can add up. Plan ahead and manage your budget wisely to prevent overspending.

Buying gifts for everyone you care about can add up. Plan ahead and be mindful of spending to keep your budget on track.

The season of giving often translates to the season of spending. Luxury cars, jewelry, and designer stores make us feel like a good gift needs to be extravagant and expensive. However, giving your loved ones a thoughtful gift is the best way to show them you care! Milledgeville State Bank has put together a list of inexpensive and considerate gifts for everyone on your list this year.

For the cook…

Although most recipes can be found online, many people still value a cookbook with their favorite recipes. For a personal touch, bookmark some of the ones you think they will enjoy the most!
Kitchen tools like a can opener, cheese slicer, or potato peeler are practical items that the chef in your family will be sure to put to good use.

For the writer…

Nice journals can be found at a reasonable price. Writers are always looking for beautiful paper to mark their thoughts on. Write a note on the first page telling the individual how much you care and what you appreciate about them.
A nice set of stationary, quality pen, and a few stamps is a thoughtful gift for those who like to use snail mail. Maybe you will even receive a “thank you” on the new stationary!

For the food lover…

Bake some of their favorite homemade goodies! Breads, cakes and cookies are a good idea for those who don’t need more “stuff” taking up space. A gift basket of gourmet chocolate, trail mix or popcorn makes for a special treat that can only be found once a year.
If you know a coffee lover, a nice mug with a bag of gourmet coffee or tea is something you know they will enjoy every day.

For the couple…

Treat them to a well-deserved date night! Pair a movie with a box of popcorn or restaurant gift card to give them an excuse for a night off.
A beautiful picture frame or scrapbook with photos of the couple together is a gift that will be cherished in their home for years to come.

Your gifts don’t need to be excessive to be appreciated. Some of your loved ones would be happy to just spend time with you! Take some time and really think about what those who are special to you would use and appreciate. Our family at Milledgeville State Bank wants to wish you and your loved ones a happy holiday season full of love and joy!

It’s the Most ‘Spenderful’ Time of the Year

It is difficult to control spending during the season of giving. You don’t need to break your budget to give nice gifts to your loved ones.

Are you looking forward to the holidays? Do you want the table filled of delicious food, beautiful storefronts and time with loved ones? It can be easy to get caught up in the festivities and ignore the major spending that takes place every year at this time. That is, until the major January spending aftereffect hits. If you are trying to skip the major expenses this holiday season, try some of these tips to prepare your finances now and prevent overspending later.

1. Track your spending – Know where your money is going. You may be surprised to see places that you are spending more than you ever thought.

2. Wants vs. Needs – Differentiate between what is necessary and what is not. It is also important to recognize the difference between people. Your wants may be another’s needs and vice versa.

3. Spend Wisely – It may seem obvious but try to get the most that you can for the least amount of money.

4. Have a goal – Tell yourself something like “I will only spend X dollars this week on wants”. This will challenge you to prioritize your wants and maybe find places where spending is not necessary.

5. Reward yourself – If you are motivated by the knowledge that you will have more money in your wallet around the holidays, that is your reward. If you miss something that you gave up to cut back on costs, reward yourself every once in a while. It will keep you motivated to stick with your plan.

Don’t stress over your finances during the holiday season. November is a good time to push for saving as much as you will spend to prevent spending first and paying later. Try our Christmas Club savings account that allows you to save all year long. Interest is compounded every month and credited to the account at the end of the 50^th week deadline, just in time for Christmas! Contact Milledgeville State Bank at (805) 225-7171 or stop in today!