How to make your savings grow with a Money Market account?

Money market accounts can provide a safe, productive way to store your money

A money market account is an account that typically comes with a higher interest rate than other savings accounts. If investing in stocks and bonds is not something that appeals to you, but you would still like to make your money grow safely, opening a money market account could be the right move. There are still some factors that you should consider before committing to your decision.

Higher interest

The main appeal of money market accounts is that they typically offer higher interest rates than savings accounts, though this is not always true on a case-by-case basis. Investing deposits for money market accounts are held in government securities, commercial paper and certificates of deposit, returning higher yields than you would normally get from a savings account.

MMAs also provided the added bonus of security comparable to that of a traditional savings account. According to NerdWallet’s Margarette Burnette, these accounts are backed by the Federal Deposit Insurance Corporation and National Credit Union Administration for up to $250,000.

Minimum balance

Compared to a regular savings account, which may have a minimum balance requirement, a money market account is likely to require an even greater minimum daily balance as well as a higher minimum deposit requirement when you want to put money into the account. The minimum requirement may also be based on a tiered system. With more money in the account, you can benefit from higher interest rates. If you are under your minimum requirements, you could be hit with expensive maintenance fees. Because of this, it is best to open an MMA if you are sure that you will be able to maintain its conditions and reap the full benefits of using it for saving.

Should you open a money market account?

Money market accounts are a great alternative to the traditional savings account that provide benefits similar to that of a checking account should you need to make the occasional withdrawal. Check out our Money Market options. It’s possible they offer even more fruitful ways to store your money, or equally fruitful options that have fewer limitations.[/vc_column_text][/vc_column][/vc_row]


4 Essentials Every Young Entrepreneur Should Know

No matter how old you are, the entrepreneurship bug can bite you and give you the itch to start a business. If you have been working for some time, you probably have some experience in the industry you’re launching into and have spent time in the business world. However, if you’re younger, there is more for you to learn. Here are some financial tips that will help you start off on the right foot.

  1. Keep it separate

Almost every resource about business finance declares loudly and often that you need to keep business and personal funds separate. It’s easy to think that you’ll make sure to track things and know what money belongs to whom, but when everything mixes together it can be tempting to dip into business funds for personal use. At BSCU we have a low cost Business Checking product that may help you keep things on budget and organized.

Besides that possibility, Dmitriy Fomichenko of NerdWallet points out that if the IRS comes calling for an audit, you’ll need proof of business expenses and income. That is much easier when the money isn’t in the same place. If your business is a corporation, you’re actually required by law to maintain a separate account for your business.

2. File your taxes

Speaking of the IRS, it’s imperative that you remember to pay your taxes. This might seem like an obvious tip, but your taxes get more complicated when you own a company. Project Eve points out that you might be so wrapped up in day-to-day operations that you forget about taxes, or you might not have the right information to file correctly and meet quarterly deadlines. If you don’t have an accountant for your business already, it’s important that you seek the advice of a tax professional now to avoid penalties (or jail time) later.

3. Start a retirement plan

When you first start your business, more money will be going out than in. But when funds do start to come back and you have enough to cut yourself a paycheck, Yoav Vilner of Entrepreneur says it’s important to also start a retirement fund. If another company employed you, retirement plans would probably be part of your intake paperwork and someone else would take care of it. When you’re working on your own, that task falls to you. No matter how much you think you’ll love your business, you will thank yourself in the future for saving now so you can ride off into the sunset later.

4. Get ready for emergencies

You probably insured your business when you opened up, but don’t forget about yourself. NerdWallet points out that, as an entrepreneur, any serious illness of injury can put that source of income in jeopardy. Make sure that you purchase disability insurance to cover you in case the worst should happen. While you’re at it, consider buying business overhead expense insurance.   If you have to take an extensive leave of absence and that temporarily closes your business, this policy will cover certain business costs like rent, employee salaries or taxes until you’re back on your feet.

If you’re young, driven and ready to start a business, we wish you the best of luck. Just make sure to look both ways before you make a major decision, and consider consulting a financial adviser.


How to Start a Small Business with Little Capital

Becoming a business owner doesn’t have to require huge capital investment

If you’ve ever dreamt of owning your own business, you probably stopped dreaming the second you considered how much money it would take to make your dream come true. You can dream big and start small, however, by starting up a business that doesn’t require an exorbitant amount of capital up front.  The following are just some of the avenues you can take to make your dream of being a business owner a reality.

Get creative
If you count painting or handicrafts among your biggest passions, you have the potential to turn your hobby into a successful business. According to Jayson DeMers, Founder and CEO of AudienceBoom and VIP Contributor for Entrepreneur, selling your paintings, artwork and crafts on eBay, Amazon and Etsy allows you to reach a wider customer base without having to invest capital in a website. If you want to market your products without having to pay for placement, you can start up dedicated accounts on social media platforms like Twitter and Facebook to show off your goods and offer exclusive discounts.

Cook up some cash
Cooking can be an incredibly rewarding experience. It allows you not only to control what you put into your body, but it also provides a creative outlet and rewards experimentation with new things. If you find that your kitchen creations are consistent crowd-pleasers, you might be able to parlay that skill into a small enterprise. Susan Ward, owner of information technology consulting firm Cypress Technologies, writes for The Balance Small Business that gluten-free and artisanal foods are two of the top small-business ventures you can start without a lot of capital up front.
If you can’t afford a retail space stocked with high-end equipment and appliances, you can simply utilize your home kitchen to create your product. Apart from selling your product via social media, you can start by selling your goods at a local farmers market. Once you begin to build a bit of buzz, you can reach out to local grocery stores and restaurants to see if they’ll begin selling your products and incorporating them into dishes.

Selling yourself
If you are in possession of a certain skillset or talent that you think can drive a small-business endeavor, you might be able to put it to use without having to pay the typical small-business startup cost. Jackie Zimmerman, writing for NerdWallet, says that your expertise can be the seed from which a thriving business can grow.
If you consider yourself an expert in some academic field or another, Zimmerman recommends plying your skills as a consultant or private tutor. If you hit upon a formula or approach that works, you can use the positive results seen by students as a proof of concept and begin marketing yourself with testimonials to back up what you’re selling.
Ward suggests that taking care of seniors is a small-business opportunity that can both help keep you financially solvent and provide a meaningful service to people in need. Ward cites the affluence of the baby-boom generation and an American Association of Retired Persons survey that found 90 percent of seniors wanting to live independently as evidence of in-home care being both profitable and important. Ward notes that there are low-cost franchise opportunities available for those interested in providing senior care.
These are just some of the small-business options that can be brought to fruition without a ton of money up front. If you have a particular skill or field that you would like to turn into a business of your own, consider all of your options and be creative wherever possible


4 Reasons to Open a Savings Account for Your Business

 

 

When you were a child, your parents opened your first savings account. As you grew and came into bills of your own, you opened a checking account to have better access to your money. Now, as the owner of a business, you’ve probably opened a business checking account so that you can pay your suppliers and separate enterprise money from your personal accounts. If you really want your business to be as sound as possible, consider going one step further and opening a business savings account.

 

1. Prepare for tax time

If you have spent time as an employee of an established business, you know that the usual automatic withholding of taxes can be extremely helpful every time that tax season rolls around. As a small-business owner, you are the one responsible for knowing how much money you owe in taxes and paying that amount to the federal, state and local governments on time. A business savings account can be a great place to store or hold the money you know you will need for tax payments. Not only will you yield some interest from setting the money aside, but you will ensure that you or your partners don’t spend it on a business investment instead.

2. Save for a rainy day

When you’re managing your personal funds, your savings account more than likely holds the money you are keeping in case of an emergency, such as a loss of job or a medical crisis. A business can use a savings account for the same thing. Amanda Cameron of Patriot Software advises that a savings account is a great buffer to cover unexpected costs that might otherwise severely hinder or even cripple your business. As liquid assets, you can access funds quickly to fix any problems, such as broken  equipment or an accident, to make sure that any work stoppage lasts the shortest time possible.

3. Earn interest

Interest rates are finally going up in the United States, which means that savings accounts might once again start earning meaningful interest. Regardless of how much interest your money accrues, the team at the Money Supermarket Financial Group points out that you will almost certainly earn a more competitive rate of interest with a savings account than in a checking account. Whether you intend to use the money in the account for a rainy day or just have it there for safe keeping, keeping it in a savings account ensures that your money is working for you.

4. Stay organized

Just like an individual can have more than one savings account, a business can also have multiple accounts. While it might seem confusing to maintain separate accounts, it is a very basic way to make sure that all of your money will be used for its intended purpose. Keeping your equipment funds in an account apart from the emergency money will help ensure that you don’t accidentally overspend in an emergency and not be able to pay for upgrades your tools need to stay competitive. This ensures more stability, even if it comes at the cost of added account maintenance.

Consider talking to an associate at your bank or your financial advisor for the best advice for taking your business savings to the next level. A business savings account is by and large a sound decision, but there may be options available to you that work better for your business’s needs.

Check out our Business Banking Options!

How to Value Your Business When Selling 

There are many reasons to sell a business as well as many reasons to have an up-to-date business valuation even if you aren’t selling. Regardless of the reasons, a number of factors will play a part in determining the value of your business. On top of that, all of them require a professional to properly assess.

Hire a professional

The first and most important rule of valuing your business is not to do it yourself, as owners tend to — understandably — overestimate the worth of their enterprise. “There is a level of emotional attachment owners place on their businesses; after all, you put years of blood, sweat and tears into its creation, therefore it feels like it should hold more value,” Andrew Bass, Chief Wealth Officer for Telemus, writes in a March 2018 article for Kiplinger.com.

It is going to be impossible for you to step back and make an objective assessment of your own business, making it important to get your valuation done by a professional. “It’s not uncommon for owners to think their business are worth more than they actually are, and they might balk at the legitimate offers being made,” Bass says, though he adds that it can go the other way around as well. “Unique tax and business aspects of the business and environment may result in greater value!”

A Chartered Business Valuator, or anyone valuating your business, such as an accountant, can use a number of business valuating methods to determine a fair price for your company.

Earning value

Often regarded as the best way to value an establishment, the earning value approach attempts to estimate a business’s ability to generate wealth in the future. “With this approach, a valuator determines an expected level of cash flow for the company using a company’s records of past earnings, normalizes them for unusual revenue or expenses, and multiplies the expected normalized cash flows by a capitalization factor,” writes Susan Ward, co-head of IT consulting business Cypress Technologies, in a September 2017 article for TheBalance.com.

One of the weaknesses of this method is that it is difficult to assess the percentage of business that may be lost by a change of ownership, which will affect customer loyalty. Ward says this can be mitigated in several ways, such as when a trusted family member takes over the business.

Market value

The market value approach attempts to determine the value of your business based on the value of similar businesses that have been recently sold. While this method is trickier than others because of the requirements involved — there need to be sufficient similar businesses to compare yours to and sufficient information about their sales, which can be difficult to acquire — it also comes with some advantages to the business owner. “Using competitor valuations to establish your own makes it difficult for investors to tell you that your valuation is too high which is often a tactic used by investors to bring your price down in order to obtain more equity for their investment,” says Alejandro Cremades, co-founder of Onevest, in a March 2018 article for Forbes.com.

These are just two of the most common types of business valuation methods, though there are many more, and combinations of methods ultimately tend to be the most effective. Regardless of the methods you adopt in the end, remember that the most important step of successfully selling your business is to start by hiring a professional.


How to use your CD’s for Savings

The advantages and drawbacks of putting your money in a certificate of deposit

From savings accounts and money market accounts to stuffing cash into a jar in the cabinet or beneath the mattress, there are a wide variety of ways to save your money. These options offer varying advantages and drawbacks, but what they all have in common is the idea that you can withdraw your money as soon as you wish. If you have funds that you want to squirrel away without the temptation to dip into them, consider putting the money into a certificate of deposit.

 

What is a certificate of deposit?

According to NerdWallet’s Tony Armstrong, a CD is a kind of savings account that typically offers a fixed interest rate and fixed maturity date. Insured by the Federal Deposit Insurance Corp. for up to $250,000, CDs are considered extremely low-risk savings alternatives. The advantage to leaving the money in your CD for a full term, which Armstrong says typically ranges from three months to five years, is that it will accrue interest over that period, offering a significant return on your investment.

 

Saundra Latham, contributor at The Simple Dollar, writes various different types of CDs are worth considering. A traditional CD is the most common variety and offers fixed interest rates, but if you prefer a bit more risk you can also opt for a variable-rate CD which will adjust to the market rate. There is also a bump-up CD, which allows you to opt into a higher interest rate if one becomes available during your term. If you have a larger amount of money to put away — think six figures or more — a jumbo CD pays out a higher interest rate than the traditional option.

 

When a CD won’t work

A CD requires the full term to pass before you can withdraw funds (without paying an exorbitant fee), so it might not be a sound option if it is your only means of savings. CDs are attractive because they tend to offer higher interest rates than savings and money market accounts, but they don’t offer the same flexibility when it comes to making sporadic withdraws for emergency situations. Margarette Burnette of NerdWallet suggests a high-yield savings account might be a preferable alternative if you aren’t positive you could go for a fixed term without the money.

 

A CD also might not be your investment of choice if you want a higher risk-reward proposition. CDs are generally safe additions to your portfolio if you want something reliable to fall back on, but if you prefer more aggressive investments with potentially bigger payouts, CDs likely aren’t going to be the focal point of your financial strategy.

 

How to maximize your CDs

The “laddering” technique is a common approach to getting the most out of a CD. The Wall Street Journal’s how-to guide on CDs puts it as such: “Let’s say you want to invest $15,000. By laddering, you would invest $5,000 in a one-year CD, $5,000 in a two-year CD and $5,000 in a three-year CD. Then, each time one of the three CDs matures, you would either take the cash or re-invest it in another three-year CD to keep your ladder in place.”

 

This strategy enables you to continually collect interest and opt into higher interest rates if they are available at the close of a term. If you keep this method going continuously, you will allow yourself the option of having a chunk of your CD savings at your disposal every year. This way, you can decide whether you need the money for an emergency or investment opportunity while the other CDs in your portfolio continue to accrue interest.

Investing in CDs is a safe, solid financial decision if you have the patience to bear it out. To determine whether a CD is right for you, talk to your financial advisor to learn more about the risks and rewards.


How to Adjust Your Savings When Your Income Changes

Have you ever heard the phrase “The more you make, the more you spend” If you have and live by this mantra then you are doing it wrong!

An increase in your income does not mean you need to up your shopping list, it means you need to increase your savings.

Basically, if you have been making living on $45,000-a-year and you have been paying rent/or mortgage and paying your bills on time, there is no need to increase your spending. We are not saying you cannot treat yourself once in a while. However, you do have to make smart decisions and be conscious of the fact that a big emergency fund matters and can help you when you need it most.

Keep the following tips in mind if you are getting a raise soon:

  1. Do not spend more

If you earn a raise or bonus, congratulations you deserve it!
Just be careful, most people become trapped in a spending circle with no money saved up for the future. Take a look at the goals you are trying to reach, be ready for unexpected expenses that may come up and be comfortable without exceeding your means.

  1. Grow or Create an emergency fund.

Your emergency fund should cover a minimum of 3-months expenses. A good emergency fund covers 6 months of expenses easily. Make this one of your goals! Do not use these funds for a vacation, a wedding or leisure time. An emergency fund, as the name suggests, it’s only for emergencies. For example, an emergency fund can be used for an unexpected hospital bill, car issues or job loss.

  1. Create a separate savings account and make the funds transfer automatically

If you don’t see it, then you don’t need to spend it. Additionally, if your income shirks, the savings you have should help you carry you thru. A BrightStar Savings Account is completely FREE and it does not require a minimum when it’s coupled with a FREE Checking Account. What better way than to save money in a reliable credit union?

Do not forget the essentials of saving, living in moderate means, and to plan accordingly.


How to save money on your 4th of July BBQ

If you are lucky enough to be off today, you are probably enjoying the day with your friends and family. After all, there is nothing better than a good food, music and fireworks. However, sometimes the joy becomes worry by the realization you spent over $500 on a day of burgers.

To try to avoid this issue, help you save and help you keep a good memory without thinking of money, we have a few tips for you.

 Tip 1: Strategize the Way You Buy Food

Let’s face it, if you are having a backyard BBQ for multiple people your bill will be sky high. Buying cheaper meats can help keep your guest and wallet full. We are not suggesting you buy expired items, but replacing foods like fresh ground beef with hotdogs can be reasonably cheaper and just as good.

Another way to save money is to buy meats in bulk. Costco and Sam’s Club are big money savers and can give you extra coupons during this time. Additionally, do not be afraid and ask your friends to help you with the extra items like chips, salads and beverages. Most of them, will just be happy to have a good day.

Tip 2: Dollar Store Decor

American-themed table decorations can often be bought from dollar stores and your guests probably won’t even notice the difference. Balloons can also be bought inexpensively so you can buy some packs in red, white, and blue and use them to decorate the party area in patriotic colors. You don’t necessarily need to go overboard with the decorations and they can sometimes have greater impact if you use them more sparingly.

Tip 3: Enjoy local fireworks.

If you live near a park, this one should be a no-brainer. After you eat and have fun with friends, take a walk to the local park. Most of the time, these parks will have FREE entertainment such as live bands, pretty fireworks, and good dancing. Not only will you have fun, you will also get to meet some great people around the area.

Happy  4th of July!


3 Ways to Help Your Teens Build Good Credit

When your teen finally takes the big leap and moves out of the house, they’re going to need a solid credit score for a lot of life steps: renting an apartment, getting a loan or finding a good deal on insurance.

For that reason, it’s important that teens build up their credit scores before they move out. There are a few ways you can prepare them for this in the years leading up to graduation.

  1. Make sure they have a checking account and debit card to go along with it
    Getting your teen started with their own bank account is a significant step in building their credit score without ditching their safety net. A teenager under 18 years old can still sign up for a debit card; they just need a co-signer. Since you are co-signing on the card, your personal account will be linked to your teen’s in case of an overdraft. With this checking account and debit card, you should also teach your teens the importance of managing money well.
  1. Teach them the credit card basics
    Credit cards are a bit more complex than debit cards, so it’s important to sit down your teen and help them understand the basics. Signing them up for their own credit card is a bigger step than signing up for a debit card, but it’s an additional step that will help boost their credit score — assuming they pay the bills on time and in full. U.S. News & World Report contributor Amelia Granger says that the most critical skill a teen can learn is to pay their bills in full, even if that means starting with a smaller credit limit. Make sure you are monitoring your teen’s bills to confirm they’re not damaging their credit score rather than building a good foundation for the years ahead.

 

  1. Help them open a Secured Credit Card
    A Secured Credit Card is the perfect card to teach your teen how to properly manage money. It does this by not allowing them to use the money they don’t have, instead locking in a minimum amount of $500 they must use as if it were borrowed money from the bank. This card will help them improve their credit score and after a year they will be able to apply to a regular credit card.

Responsible money management is tough to practice if you learn it late in life. Your kids will be much better off by teaching them good financial practices.


Shopping Online Vs. In-Person

With the advent and spread of smartphone technology, entrusting your money to an online bank has become an increasingly popular alternative to the traditional experience. Traditional banks, however, still offer several distinct advantages that the online experience cannot provide, including in-person customer service when you have questions or concerns.

How do you decide which type of bank to use? Here are a few things to consider about your transactions.

Getting cash

If you use cash on a regular basis, make sure to consider the locations and accessibility of in-network ATMs before choosing your bank. Choosing a local bank or credit union means you should have good access to multiple ATMs, and many banks will reimburse you for fees incurred by using other ATMs.

Online banks don’t typically have ATMs of their own, which means you are more likely to pay a fee to withdraw your cash. These fees usually run a few dollars per withdrawal, but can often be frustrating since you are paying to take out your own money. This isn’t always the case, though. According to Business Insider’s Megan Durisin, some online banks will provide you with compensation for your fees. However, there is usually a cap on how much they will reimburse you per month.

Making deposits

When choosing your bank, you also want to consider how you will deposit money into your account. While both online and traditional banks usually allow direct deposits from your employer, online banks have several restrictions when it comes to other deposits.

At a traditional bank, you can deposit cash, checks, money orders and more. Simply walk into your bank and speak with a representative about your deposit. If you make a significant number of deposits, especially with checks or cash, traditional banking is a convenient option.

With online banking, your deposit options are a bit limited. Depending on your bank, you might be able to digitally deposit a check, but there are usually limitations on how much you can digitally deposit in one day. If your check exceeds that limit, you’ll have to mail it in. To deposit cash to an online bank account, you may have to purchase a money order and mail that in, as well. “You might have to pay a small fee for the money order,” explains Spencer Tierney, a contributor at NerdWallet. “For amounts larger than $1,000, you may have to spring for a cashier’s check at a bank.”

Customer service

Many online banks provide great customer service, including online live chats and call centers. But for some, speaking face to face is an important part of creating a trusting relationship with your financial institution, and it is a service that Durisin notes can only be offered by a traditional brick-and-mortar bank.

Choosing your bank is a personal decision that should be based on services that are most important to you and your lifestyle. Speak with a representative at either a traditional or an online bank to learn more.