Monthly Archives: June 2019

Best Retirement Strategies for Your 20s

If you’re in your twenties and thinking about retirement, you are light-years away from your peers who wait until it’s too late. You’ll be so glad you started to take serious steps towards your golden years with these straightforward strategies.

1. Negotiate More

Your first job isn’t typically known to be a real money maker. You’ve been told to “pay your dues” and take the work for little pay. However, it is especially important for college graduates to negotiate for a higher salary. Whatever number you are thinking, add $5,000 to that salary. This is important because whatever salary you start with will follow you and be the basis for much of your career. You will of course get raises, but often, each new position you take is related to the salary you had prior. Start off high so you can begin investing greater now.

2. Automate Savings

It’s never easy to save and can be incredibly challenging if it’s saving for something that’s thirty years away. One way to take the struggle out of this is to have your savings automated. You can set a specific percentage to come directly out of each paycheck and into your savings account. It’s a painless way to force yourself to make wise decisions with your money.

3. Establish an Emergency Fund

While you’re saving for the golden years ahead, your plans can be easily derailed with a major financial emergency like a flooded basement or an unexpected medical procedure. Having an emergency fund in place will help to provide some cushion so you aren’t going into debt to cover these losses.

4. Start a Retirement Fund

Having a straightforward savings account for retirement is not the best way to make the most out of your money. You are going to want to invest in a retirement fund that’s built for growing your wealth over time. Most employers offer a matching 401(k) compensation plan as a part of the benefits. However, if yours does not, you can and should invest in your own Roth IRA.

5. Pay Off Debt

Debt of all kinds is crippling to millions of Americans at all ages. Those in their twenties average $20,000-$35,000 in debt. Debt should be paid off as soon as possible so you can begin investing in the things that matter most to you. You shouldn’t have to be constantly playing catch up, but instead, planting financial seeds for your future.

Continue to build your retirement funds with a CD or IRA from Heartland Bank!

Rainy Day Fund: 5 Ways to Save For Unexpected Events

You can’t plan on what bad times will come your way, but you can unfortunately count on the fact that there will be a bad day in your future that can impact your bottom line. Make it a little less painful by preparing for the costs ahead of time! Here are some creative ways you can start saving today for unexpected events.

1. Know What The Fund Is For

Don’t start a big life adjustment if you don’t really understand the purpose behind it. This is true of just about every big change! Often, people will start a savings account and keep it as a lump sum to use towards anything unexpected that comes their way, whether it be a flat tire or extra meals out on vacation. A Rainy Day Fund is typically just for bad days that require money towards new tires or fixing a small plumbing problem. It’s for smaller mishaps but not full-blown financial emergencies.

2. Separate Your Savings

Once you have an understanding of what the funds are for, you should separate your savings accounts. By having a different account for emergencies, vacations, rainy days, etc., you will be better able to track and spend your savings. You may even be motivated to save more. If you see one of your savings areas lacking, you can concentrate more money into that account at your next paycheck.

3. Hold Tight to Extra Income

While it may seem obvious, it’s definitely not easy. When you get extra income, whether it be a pay raise or even money given as a gift for a birthday or anniversary, you can put that money directly into your savings account. Your daily living isn’t required to change for this simple tip!

4. Start Saying No to Whimsy

A Rainy Day Fund isn’t a fund for you to splurge on unneeded items when you’ve had a bad day. It’s a fund to keep your budget in check so you can ride out the unexpected waves of financial trouble. Before you go shopping, make a list of what you need. Buy no more than what is on that list and shop purposefully. If you love the occasional “splurge,” account for that in your budget. For example, you can know that you have $30 to spend however you please whenever you please every two weeks.

5. Set a Goal

It’s hard to know where to start if you don’t have a goal. For many, a Rainy Day Fund is the first step in learning how to build a larger emergency savings. It sets the foundation for a more detrimental financial emergency like losing a job. Start small but be specific with what you hope this account to look like three, six and twelve months from now. Knowing where you are going with this will be great motivation to get started!

While saving for unexpected events, we offer a variety of accounts to keep your money safe. Learn what works best for you at Heartland Bank.

8 Surprising Costs of Buying a Home You Need to Budget For

Buying your first home is so exciting. It can also be a little nerve wracking the first time around if you don’t have any guidance. Here’s what you should know about the home buying process before, so you aren’t shocked by the expenses that come along.

The Appraisal

An appraisal is when you have a home expert come and determine the value of a home. They have no stake in the outcome of their conclusion, so you can expect an honest answer. You will want to be sure to have an appraisal completed to ensure that you are not paying more for the home than what it is worth. This can cost upwards of $600 and should be factored into your budget.

Home Inspections

Some get appraisals and home inspections confused. They are both important, but the home inspections are more tailored to your needs and may help to answer some of your questions about the conditions of the home. By getting an inspection, you are able to have a better understanding of the home’s condition. This can cost an average of $300.

Closing Costs

Sometimes, you may be able to convince the seller to pay the closing costs. Yet this isn’t something that should be relied on. Closing costs cost an average of 2-5% of the value of the home’s purchase price. It includes costs such as loan fees, taxes and title searches.

Homeowner’s Insurance

If you’ve rented prior to this, you may be new to fire insurance or more commonly known as homeowners insurance. It differs from rental insurance, as that covers your liability and personal items, while homeowners insurance also covers the physical structure of a home. The average cost for this is $1,500 a year.

Home Maintenance

The nice part of renting is that you aren’t responsible for home maintenance. Surprisingly, many are unprepared for the maintenance that comes with home ownership and how this can create additional expenses. You are going to need to buy basic items like a lawnmower, snow blower and a leaf blower.

Cleaning

If the prior owners hadn’t cleaned, you may have an additional expense of getting the carpets cleaned before you move in. Carpets should be professionally cleaned once a year, so if they haven’t been cleaned immediately prior to your move in, you may want to schedule a cleaning. This can cost $300 for a 1,500 square foot space.

Homeowners Association Fees

A homeowner’s association is a part of an organization that enforces rules and regulations for your property. They charge a fee for the upkeep of the property in addition to shared services among the community. These are typically due at closing, but you should be aware that the average HOA fees increase by 5% each year.

The Big Move

Often forgotten or not factored, is the move itself. Moving is an expensive business, especially if it’s across state lines. You will need to figure in the costs of movers, moving materials and transportation. These usually cost an average of $3,000.

Budgeting for these costs will allow you to have a correct price in mind when house hunting. Our team offers great insight into our mortgage products. Discover more today!