LorMet Community Blog

Is It Time for a Spending Diet? Put Yourself on a Budget

Many people can be heard saying that their waistlines are too big, but it is rare to hear someone say that their savings account just has too much money in it.

Most of us would like to gain money and lose weight (and not the other way around!). So would the principles used to drop pounds work if you are trying to add on money?  Perhaps, because after all, the goal of a weight loss program is to eat less and if you want to get out of debt you need to spend less.

One MSN writer, her family, and friends of the family decided to take on this challenge as outlined in the book Wealth Watchers: A Program to Help You Spend Less by Ann Wood.  Wood and her husband were able to reduce their spending by $12,000 the first year that they followed the program she writes about in her book.

A Money Diet

As dieters need to have guidelines about what they can and cannot eat and how much they can eat, people who want to improve their financial health need to learn how to make a budget.

Cheat Days

Some diets say it is okay to have "cheat days"–those times when you go a little overboard with the calories—as long as you make up for it later by cutting back. Wood offers the same advice for people on a money diet. If you spend a little too much, either on an unexpected but necessary expense or because you just couldn't resist the temptation to spend, you will need to make up for it later to stay on course.

Get Support

The writer asked family friends to take the challenge as well so the two families could lean on each other; much in the way diet programs have support groups.

With a new buget, a sensible spending plan and a supportive base, you may find yourself on your way to a much more stable financial postion for years to come.

When Paying for College, Students Loans are One Option Among Many

In a Washington Post article with an attention-getting title, "Student loans saddle both kinds of seniors: graduates and grandparents," finance columnist Michelle Singletary laments the fact that many people are likely to carry student loan debt into their golden years. Some may still be paying for the college education of their youth; others may have student loan debt from a mid-career change. That debt can get in the way of people putting money into savings accounts or paying down other debts they may incur.

Singletary writes:

"You see, this is the problem I’ve had all along with student loans. The loans have become indispensable. As far back as 2006, Deanne Loonin, an attorney with the National Consumer Law Center, predicted that many student-loan borrowers would face a lifetime of debt with little or no chance of escape."

If you want to get a college education or to go back to school, you have a myriad of options. If you are finishing high school, you can attend an institution like Lorain County Community College, which typically costs less than four-year institutions. Some people start at a community college and then go on to attend a four-year school later.

There is nothing wrong with using student loans to finance your college education. However, if you can combine loans with scholarships, work-study programs, grants or your own savings, you will be able to borrow less than someone who is relying completely on loans.

Tips for Saving Money on Your Summer Vacation

While some people plan and book their summer vacations way in advance, if you haven’t even begun to make plans, don't worry. If you are flexible you may be able to snag last minute deals. And you can take the LorMet Visa Travel Card with you so that you have the security of Traveler's Checks and the convenience of a Visa Debit Card. You can check your LorMet Visa Travel Card balance online or take advantage of Online Banking to check on your LorMet accounts when you travel.

Don't Follow the Crowd

MoneyCrashers.com suggests that you: "Visit areas that don’t thrive on tourism. If you go somewhere that depends on tourism as their main source of income, you’re going to pay a higher premium to stay there."

This doesn't mean going somewhere that no one wants to visit, but it can mean visiting lesser known national parks or going to cities in Europe that are known but not the capital cities that everyone wants to visit.

Don't Buy Every T-Shirt

There is nothing wrong with getting a memento of your vacation, but sometimes people who are away from home throw caution to the wind. You can set a limit for how much you or each family member will have to spend on souvenirs. Discuss this as a family beforehand and help your children to understand that you can take photos and cherish memories rather than return home with lots of stuff.

Don't Let Meals Eat Away at Your Budget

Find ways to spend less on food by booking accommodations that offer free breakfast or finding ways to pack your own lunches. When you do splurge on food make sure it's for a really great meal and not on overpriced versions of food you could get at home.

Buy a Fuel-Efficient Car with a LorMet Auto Loan

When you buy a new car using an auto loan from LorMet, you already know that you are going to save, but if you want to keep saving throughout the life of your vehicle, you might consider getting a car with great gas mileage. You can employ various techniques to save gas no matter what kind of car you drive, but it helps to have a car that is designed to be fuel-efficient.

MSN.com listed what it has found to be "The Top High-Mileage Cars to Beat Rising Gas Prices” noting that "they aren't all hybrids and EVs."  (EVs are electronic vehicles)

According to MSN, the Smart cars that you’d think would get rave reviews may not be so great after all: the latest model Smart car is cute and will be easy to park in small spaces, but you would have to decide if these kinds of things outweigh the ways in which these cars fall short.

If you want to compare the fuel efficiency and reliability of the cars you are considering to a car you already own, you can click on the Chrome Carbook icon on the LorMet homepage.

Photo Credit: caribb

Should Parents Tie Chores to an Allowance to Learn to Save?

What have your children learned from you about money and money management? Do they see you looking very tense as you sit down to pay your monthly bills? Can they see you checking online banking statements? Are they aware that you are putting money into a holiday savings account so you can spend more during the holidays?

Whatever you are doing (or not doing) with your money, your children are watching and learning based on your behavior. The way you manage money doesn’t only affect your wallet; it sets the tone for how your children view finances too.

Parents can not only model sound financial habits for their children, they can also provide opportunities to practice money management by making sure that their children have money of their own.

CNN.com reported on the Chores & Allowance and the 21st Century Kid survey that was conducted by DoughMain.com: "It found that the vast majority of parents -- 89% of them -- assign chores to their children. Only about half, though, give their kids an allowance. And among the allowance payers, just 21% tied the payouts to chores."

Some families feel that helping out at home is something that each family member must do to contribute and do not agree with the idea of paying kids to do chores.

Other families may not take this stance, but have not purposefully linked the chores children do to an allowance. After speaking with the CEO of DoughMain, CNN.com concluded that a financial reward "can serve as compelling motivation for [children] and can also help them learn the value of money and how to manage it."

The article also suggests that parents can reward children for their chores without using money by giving them extra privileges like more time to watch television or play video games.

Your LorMet Visa Offers Purchase Protection

We hear a lot of warnings about the dangers of overusing credit cards, but there can be a lot of advantages to using your LorMet Visa Credit Card for certain purchases.  In "9 Things You Should Always Buy with Your Credit Card," Yahoo! Finance reminds people that you don't want to charge things you can't afford and pay a lot of interest on them, but there are times when you can use a credit card to your advantage when buying things you can afford.

Protection and Warranties

There are a number of things that you should buy with a credit card because when you do so, you will have more protection than if you use a debit card, check, or cash.

There may be times when you may need to dispute charges and it is easier to do this when you pay with a credit card. Yahoo! Finance suggests using a credit card to pay for purchases from service providers and for gym memberships and appliances for this reason.

Record-Keeping

If your work includes buying items or paying for travel expenses that you can deduct on your tax return, using a credit card to purchase these items means that you have a record of what you paid and when. If you can't manage to keep up with every receipt, using your credit card means you still have evidence of the purchase.

Travel Protection

Yahoo! Finance notes that, "A few credit cards carry certain secondary travel insurance coverage that can spare the added expense when you are planning a trip."  Aren't you glad to know that the LorMet Visa Credit Card is among the few cards that do this? LorMet members who have the card can rest a little easier as they travel, knowing that their LorMet Visa Credit Card provides Travel Accident Insurance and Auto Rental Insurance.

Strategize to Increase Your Savings

You are probably already aware that it is important to save money…but somehow knowing that does not necessarily mean that you increase the amount of money in your savings account. Sometimes saving requires strategy—coming up with a real plan for how you will save more instead of just thinking about saving.

Start small, but keep your goal in mind

Some people get discouraged about saving because they don't think that they can save "enough." Your rainy day fund may not be huge, but you will be glad to have something there if you need it. If you decide to put away $25 a week, you will have $650 saved in six months. You cannot live off of that forever, but if you have an emergency car repair or suddenly need moving expenses, that money will help.

Change the way you view your earnings and your expenses

If you get paid by the hour, think about how many hours you need to work to earn the money for certain things. This may not stop you from spending altogether, but there are some things that aren't worth a day's pay. It would be better to save that money.

You can also find more money to save if you create a budget where you round down your income and round expenses up.

Use a Home Equity Line of Credit for Home Improvement Projects

Of course summer is a great time for home improvement projects that involve being outside. But it is also a good time for indoor home improvement projects since doing work inside your home may involve opening windows or going back and forth for equipment. You'll be much more comfortable with having the doors or windows open when the weather is warm. When you tackle home improvement projects while the weather is warm, you can enjoy the fruits of your labor later in the year when the temperatures drop.

With a Home Equity Line of Credit from LorMet, you can borrow against the equity in your home at a low variable rate.  As you repay the Home Equity Line of Credit balance, money becomes available again for your use. We offer flexible repayment terms and a seven year period during which you can borrow against your loan.

Improve the outside

You can add nice touches to your home like getting a new front door, painting the outside, or getting new siding. And because home improvement includes your yard, remember that landscaping your yard can include a number of options from simple to grand: planting trees for shade, putting in a pond and adding or repairing a deck.

Improve the inside

Bathroom and kitchen renovations always give a home a new lease on life

and these projects tend to increase property value. These aren't the only indoor home improvement projects you can tackle, however. You can also finish a basement or convert an unfinished spare room into an office/nursery/guest room/walk-in closet or whatever you need.

Improve energy efficiency

Through 2016, you can get a tax credit for solar energy systems, geothermal heat pumps and small wind turbines. If none of those projects are doable, you can at least put in energy efficient windows.

Joining Lives and Finances? LorMet Can Help You Manage

People who marry may find that it is not easy to put the "what's mine is yours" idea into practice, especially if they are older and have been used to being in charge of their own finances. And when one or both spouses have children from previous relationships, this can further complicate matters.

In "Making Your Joint Finances Work," Kelly Adams, EA, CFP suggests that when working out your finances you examine "…each spouse’s gross income and deducting the amounts over which they have no control (taxes, FICA, Medicare, garnished wages, child support, etc.)." That way you won't have an inflated idea of what each person can contribute to the family finances. After that, each spouse can list his or her personal expenses. This list can be examined with a list of the couple's joint exposes, such as rent or mortgage and food.

Our free checking accounts allow you to write as many checks as you need to write. As you merge finances and lives you will not have to spend extra time trying to make sure that you have accounted for checking fees. And should you find that while you are adjusting to married life, you spend more than you intend, these accounts have overdraft protection options available.

You also have to think about how you want to handle savings. Many people do not plan for how they will save; they just figure they will set aside extra money whenever they have it. However, if you don’t plan to save, you may not remember to set money aside. So as a couple you can decide whether you want to continue to have separate savings accounts or if you want to open a savings account where you both will save for unexpected events or future financial goals, such as vacations.

Avoiding ATM Convenience Fees

LorMet offers its members the convenience of using ATMs that are free of surcharges and transaction fees. In our area, you can find these no-fee ATMs at all LorMet branches, inside of Elyria Memorial Hospital, and inside the Lorain County Administration Building. Outside of our area, LorMet members can use surcharge-free Allpoint ATMs* because LorMet has joined Allpoint™, the nation's largest surcharge-free ATM network.

According to a Washington Post article, there is often a high cost to convenience. You may not be aware of convenience fees, but when you pay someone else to take extra steps that you prefer not to take, there are often hidden costs.

As you probably already know, the article points out that you can save money by making your own lunch:  "...do the math: A $7 sandwich every work day adds up to about $1,700 a year. Is it more delicious than a summer vacation?" However, there are even more ways in which you could save money by putting forth a little more effort instead of paying others to do the work for you.

For example, when you buy pre-cut fruit instead of whole fruit, you will often pay more for the convenience of having the fruit cut for you in advance.  Sue Perry, the deputy editor for ShopSmart Magazine told the Post, “If you can peel, make or shred it in five minutes, it’s not worth a premium price.

And if you regularly take clothes to the dry cleanser for small stains, the Post recommends that you get a stain removing stick to take care of these things. You can spend money at the dry cleaners for garments made of delicate fabrics that you cannot clean on your own at home.

*Excludes Allpoint ATMs at 7-Eleven locations.