The Bottom Line
Small business is important to Central Oregon, and to Mid Oregon. Find tips and resources for business, and information about Mid Oregon’s commercial services and business members.
Bad Money Habits and How to Fix Them
Learning how to use money wisely is an essential skill that isn’t always taught to us as children. Some of us pick up bad money habits on our journey to adulthood. Often, we’re just not being mindful of where our money goes. It’s important to know your bad money habits, and how to fix them.
Five Bad Money Habits
See if you have any of the following bad money habits. Then read on to learn how to break them and replace them with good habits.
1. Use credit cards to pay for a lifestyle beyond your means – It’s easy to spend wildly with a card; you don’t see the money slip away until you get the monthly bill. If you can’t pay off your credit card balance each month, then at least pay more than the minimum payment. Remember that even if you don’t use the card, the interest charges will compound, increasing your total debt. To break a credit card habit, try using cash or your debit card instead for a few weeks and look at your checking account balance every day. You’ll quickly learn to stop and think twice before making a purchase.
2. Living paycheck to paycheck – If you’re spending as much as you earn, you’ll always be short of funds by the end of the month for your rent and bills, and you’ll never be able to save. So, first, get a clear picture of your essential expenses: your rent, utilities, gas, insurance, groceries. Add them up, then deduct that total from your monthly take-home pay. Ideally, essential expenses should take up only 50% of your income. If it’s more, then you’ll need to either find ways to reduce those expenses or get another job Of the remaining 50% of your monthly income, use at least 20% to pay down debt and add to savings and use the last 30% for everything else you want.
Emergency Funds Are Crucial
3. Not saving for an emergency fund or retirement – Life is unpredictable; you can’t always tell when your job may be downsized or your car needs a major repair. That’s why it’s important to build an emergency saving account that has enough to cover at least 3 months of expenses. Relying on a credit card will only send you further into debt. It’s also important to begin saving for retirement. The younger you are when you start, the more you’ll earn through the magic of compounding interest.
4. Keeping subscriptions you don’t use – If you have an automatic recurring expense, like a gym membership or a streaming service, but you aren’t using them consistently, then why are you paying for them? Review all subscriptions and if you haven’t used them on a regular basis for 3 months, cancel them. Put the money you save into your savings.
Uncontrollable Spending?
5. Not tracking spending. Just try it one month to get a clear idea of where you are spending your money. Keep a receipt for every purchase, categorize them in a budgeting app or spreadsheet, and add them up. You may discover that buying lunch everyday instead of making your own is costing you about $200 every month, money that could be used to pay down a student loan or credit card bill.
Like any bad habit, it will take some work to change bad money habits to good ones. Just know that the peace of mind a healthy financial status brings is priceless.
6 Ways to Get Financially Fit in 2020
About half of Americans make New Year’s resolutions each January, but only about 20% of people keep them. Getting into shape and achieving financial goals are among the most popular resolutions. (Statista.com).
While we can’t help you reach your ideal weight, we can share 6 ways to help you become financially fit in 2020:
1. Put your money on autopilot—Set up direct deposit, authorize electronic payments, and automate routine savings. Streamlining your finances with online tools not only saves time, it helps you avoid late fees and overdraft fees and makes saving easier.
2. Create a spending plan—Only about 40% of adults have a budget, according to the National Foundation for Credit Counseling. Use a free online budgeting tool, like Mint or PocketGuard, to keep track of expenses and compare it to your monthly take-home pay. See where you’re spending too much and make any necessary adjustments.
3. Build an emergency fund—Not having an emergency fund is like driving without wearing a seatbelt; it’s a risk that could ruin the rest of your life. More than half of Americans don’t have a rainy-day fund and 40% don’t even have $400 in cash saved for emergencies. You can start small, $10 to $20 per paycheck, but work to save 3 to 8 months of income. To make it easier, setup an automatic transfer from your checking to your savings account.
4. Increase your credit score—Pay all bills on time, every time; pay more than the minimum; don’t use more than 30% of your credit; avoid opening many new accounts in a short time period, and; keep the oldest existing credit (the longer a credit history, the better). Also, if you have parking tickets or library fines, pay them off. Debts are reported to a credit reporting agency and they can knock down your credit score.
5. Request your credit report—You want to make sure there are no errors and no one is using your credit unlawfully. Request one free credit report a year from each of the three major credit reporting bureaus by visiting annualcreditreport.com.
6. Beef up retirement funds—Make regular contributions to a retirement savings plan such as a 401(k) or IRA. If your company offers a 401(k) plan, contribute at least enough to meet the company match. If you don’t, it’s like leaving free money on the table. Also consider opening an IRA at your credit union.
We can help you with any or all of these ways to become financial fit in 2020. Come in to one of our seven Central Oregon branches to speak to one of our team. And start the new year off right!
Holiday Break Financial Opportunity for Parents!
Don’t Miss the Chance to Teach Your Children
Soon our kids will be out of school for a couple of weeks. We should be looking forward to Christmas, winter fun and educating our kids. Yes, winter vacation is a great time to teach your children about money. Don’t miss this holiday break financial opportunity for parents
But why is this a good time? Actually, any time is a good time. But these two weeks that kids have off have some additional built-in advantages.
Spend Time Together
Parents often have vacation or additional time off around Christmas and New Years. With our busy lives, being at home at the same time as our kids doesn’t happen enough. Use this time wisely.
Giving Your Child a Teachable Gift
Have you thought about a gift that can help teach your child about money, or managing their finances? From stocking-stuffers to gifts of cash, there are almost endless gift ideas that provide openings to share about financial management or money.
Take Them Shopping
Bringing them with you to purchase gifts, either for your family or help them find gifts for their friends and relatives. These can be teachable moments. Making their money go further, staying within their “budget” and incorporating the value of comparison shopping can all be building blocks for financial learning.
If you are looking for gifts to give your kids, here are some examples you might consider. Keep in mind the possibilities are almost endless.
Under 5 Years Old
- Give them money, or play money. Have young children sort different types of money into piles by color and size.
- Toys tied into business, like a play store. Maybe you can find a toy cash register, and help them learn about the value of money and how commerce works.
- A Piggy Bank can be fun for them to receive and look at. You can also give them some money to start their savings.
- A Children’s book about money. There are so many good books you can find. Many popular book series have money teaching books, like The Cat In The Hat, The Berenstain Bears, Curious George, and more.
Pre-Teens
- How about old fashioned board games? These used to be the staple of great family times, especially when doing things outside was more difficult. Board games are still around today, and the choices to teach about money are extensive. Cashflow for Kids, Pay Day, and even the old standby Monopoly are good choices.
- What about getting them the gift of a savings account? Give them a check as a starter. Then take them down to your local credit union (like Mid Oregon), and open an account. This can be a great start to a solid financial life. Make it their account, with you as a joint owner. Of course, you don’t need to wait until they are in elementary school to open their savings. Each year you can bring them in with the money gifts they received to make their deposit.
- With those same money gifts, you can teach about spending, saving and giving at the same time. Urge them to save a portion of what they receive, and set aside some for what they want to buy. But what most parents forget is you can teach them about giving, too. Being generous or charitable is a part of healthy money management, too!
Teenagers
- Teach kids money management with a debit card. If you’ve already been teaching smart money management skills and your son or daughter has shown financial responsibility, a debit card/checking account from Mid Oregon Credit Union can be a great next step to teach kids money management.
Bring them to the credit union to open their checking account, and you can maintain some teaching influence (and control) with our Mid Oregon tool of CardNavSM by CO-OP. It gives real-time security and control over Mid Oregon debit cards through smartphones or tablets! It can use GPS to restrict transactions to businesses within a designated area. You can limit debit card use to specific merchant or purchase types. You can receive near real-time, in-app transaction alerts. and receive alerts when you’re getting close to any personal spending limits set. Visit MidOregon.com for information on downloading this free app.
- Games work for teenagers too. Monopoly is good for older kids (and adults), but there are many more.
- Books for adults can become good reading for older kids. The Rich Dad, Poor Dad series has a book for teens, and Dave Ramsey has many good materials for youth. These are just the tip of the iceberg.
- If you child has a smartphone or tablet, there are many apps which provide teaching on money. Do a search and you will find many app lists to help kids learn about money. Get a good recommendation and be sure you agree with how the apps deal with their subject.
This Is The Time
As you can see, there are many choices to help you teach your kids about money management. This is an ideal time to start of continue building that learning. Don’t hesitate to come into Mid Oregon to ask about resources, and help your child get started on a life of sound financial management!