3 Great Financial Skills for Young Adults

Great financial skills at a young age!

The real world is expensive, and if you are a young adult the lack financial aptitude will harm you later on in life. Being financially unaware will make you struggle not only fiscally, but emotionally as well. That’s why you need to acquire financial skills as you make your way through college, navigate your first job and learn to save for the years to come.

 College-bound

College is often the first time you will experience a real sense of freedom. Gone are the days of a traditional school schedule with parents and teachers standing over your shoulder to make sure you study, eat and complete your assignments.

College may also be the first time you are faced with managing your own money to cover bills, school expenses and inevitable loan payments. To help keep you from failing Personal Finance 101, we recommend establishing a budget.

Record income from sources such as part-time job, student loans, money from parents, grants, savings accounts and scholarships.

Then record expenses: things such as books, tuition, rent, clothes, entertainment, college fees, supplies, personal care items and transportation costs. By tracking the first two months of spending, you will earn an accurate baseline of necessary and unnecessary spending and where’s there’s room in the budget for saving.

 On the job

The thought of saving for retirement after securing the first job out of college may seem ludicrous.

After all, you still need to pay off college loans,  rent, car payments and insurance fees.

However, saving for the future as soon as possible and investing in employer-matching retirement programs with the max amount possible are smart financial moves, according to The Balance writer Miriam Caldwell.

Remember the budget you used in college?

Now is the time to update if for the real world. Tracking your income, expenses and spending is the only way to gain control of your finances. As you progress in your career, your financial health should become more robust.

Be sure to consistently evaluate and re-evaluate your budget, plans for the future and investment options.

Credit cards are convenient, and sometimes the only resource you have to get through stressful financial times. But, they come at a high price. Sinking into credit card debt happens quickly and before you know it, you’re over your head in fees and balances you can’t clear.

To help you stay afloat, forgo any dependence on plastic.

 In case of emergency

Life will throw you expensive curveballs, and without an emergency fund, your financial health will take on serious damage.

According to Investopedia writer Amy Fontinelle, any amount you can save each month in a money market account, certificate of deposit or online savings account will do wonders in establishing your financial safety net.

Be sure the account you choose earns high-interest rates, too.

By adopting smart money habits, like budgeting, you’ll create a lucrative and secure future.


Raise Capital for your startup!

4 Ways to Raise Capital for Your Business

Raise Capital for your startup!
Raising Business Capital is Important!

Very few people know how to raise capital for their business, especially if it is their first startup. Though a necessary part of the process, investing your own money may not be enough. How can you raise capital for your business, and where can you get it?

1. Create a solid plan

Your business won’t be successful without a solid plan in place. Without one, you won’t be able to secure capital to get on your feet.

“Every successful business transaction starts with a carefully developed plan,” Jeffrey Hayzlett writes in a September 2017 article for Entrepreneur.

Hayzlett says that a good plan should identify the problem your business is trying to solve. It highlights the unique features that make your service or product stand out. Use these to build a short pitch. You should identify future milestones and then estimate how much capital you will need to meet them.

Without a solid plan, potential investors won’t have any reason to believe they can trust you and your business with their funding.

2. Friends and family

Borrowing money from friends or family is one of the most common ways to raise capital for a new small business. However, many investors shy away from it. After all, the potential cost of failure isn’t just financial; it’s personal. The key is to present your pitch professionally and treat your friends and family like real investors. This will make things go more smoothly if you are turned down.

On the upside, that personal relationship can take you further than you could go with an unfamiliar investor.

3. Crowdfunding

Crowdfunding is an increasingly popular way for small businesses to raise capital money to get started. Websites like Kickstarter and GoFundMe let you solicit funds through online campaigns. In return for their money, donors receive services or products related to the project you are trying to launch. The value of which is based on the amount donated.

4.  Angel investors

Angel investors are individuals with deep pockets who will invest in your startup in exchange for a higher rate of return than traditional investors.

Companies like Google and Yahoo, received help from angel investors in their early stages. “The big advantage is that financing from angel investment is much less risky than debt financing,” Susan Ward writes in an October 2018 article for TheBalance’s Small Business. “And, most angel investors understand business and take a long-term view.” You can find angel investors on websites like New York Angel and Angel List.

These are some of the ways you can raise capital for your business. Others include credit card loans, personal business loans, SBA loans and microloans from nonprofits. Talk with a professional to explore all of your options.


6 Smart Financial Choices You Should be Making

Smart Financial Choices is the Making
Make Financial Choices that Matter

The world is a revolving door of bills, savings, spending and decisions. When we talk about financial wellness, we don’t usually talk about millions. We talk about living within your means. This means you have to make financial choices that will benefit you. For example:

 

  1. Create an emergency fund

Every single one of you, regardless of how much you make should have an emergency fund. Unfortunately, more than 50 million Americans forget about this very important financial choice.

This very important aspect of savings will help you take care of unexpected life events that will require you to spend money. The last thing you want when an emergency arises is stress about money. This fund will help you get to your next step easier.

 

  1. Embrace minimalism

Do not spend money on things you don’t need. Yes, you may treat yourself once in a while but if you are going out every weekend or changing your house décor every 2 months; STOP!

Take a step back, breathe and ask yourself “Can you live without this?” If the answer is yes, then put your credit card/cash back. We cannot stress this enough; you must live within your means. Once you start doing this, you can actually start achieving other goals like traveling, saving for a home and go on a shopping spree without having a huge financial strain.

 

  1. Make your money accrue interest

Growing up I heard everyone older than me say that financial stability came along when you figured out a way to make your money make own its money. CD’s and Money Market Accounts are the perfect way to make your money accrue interest by just letting it sit. It is also the perfect way to get disciplined with your savings. CD’s and Money market accounts are also a guaranteed way to make money because they do not rely on the stock market to grow. You just need patience.

 

  1. Change your insurance

We briefly mentioned changing your insurance on our “How to Make a proper Budget” blog. The internet has made research easy. Changing your insurance is research you should be making. See how you can take advantage of discounts, promos and benefits that can help you reduce the cost of your insurance.

 

  1. Save money on gas

Gas is one of those little things that makes a difference. If you live anywhere in Florida, you are spending money on gas. A way you can start saving on gas is buying or switching into a smaller car. This may not be possible if you are a parent or have a big family, but if this is not something you need…CHANGE IT!

 

  1. Find ways to make extra money
    Making a little extra money is smart- especially when you want to treat yourself a bit more. You can use APPs and websites like eBay, Offer Up and Facebook to sell gently used items. You can open a separate Savings Account to add the little extra money you are making. The extra dollars can help you pay for a plane ticket and help you pay for a vacation. It can also make it easier to grow your Emergency Fund.

 

Try to follow these tips to help you make better financial choices. It is the little changes that make a difference in your financial well-being.


5 Saving Money Tricks for this Holiday Season

The Holiday season is upon us and this could either mean you are overly excited about the celebrations or you’re overly stressed out about money. Granted, you can also be both, excited and stressed out. This is normal during this time and we are here to offer you some guidance.

How can you save your money and spend wisely this holiday season?

Make a Budget

It should be no surprise to you that a budget is the smartest way to keep track of your money. You should keep one year-round but you should also have a separate one during the holiday season.

When you create your holiday budget, be smart and avoid setting yourself up for failure. Do not set a budget that is unrealistically low or one that is way too high. Also, think about cutting back in other areas. Can you avoid brunch Sundays with your friends for a month? Or even little things like buying coffee every morning?

Make a list of gifts that you absolutely need to get and another list of gifts you can make yourself. Getting a beautiful printed picture in a cute affordable frame can be just as nice as a $50 bottle of wine. After all, it is the thought that counts.

Make a Potluck

Getting your friends and family together to celebrate is always a beautiful tradition. However, if you are the host, it can be a very expensive one too. Deviate from the all-or-nothing thinking and ask your friends to help you with side dishes and dessert for your celebration. Not only will a potluck save you money, it will also save you precious needed time.

Get Flying Deals and Discounts

If you’re planning on taking a nice trip out of town, search for discounts. Gone are the days where travel agents had the only good flight packages. Now you have a million ways to get discounted fly tickets, car rentals and hotels. In fact, you can even get some travel benefits with your BSCU credit card.

Here is a trick: When you search for flights online, make sure to check at different times of the day. Believe it or not, some flights can get very cheap when you purchase them at odd hours like 2:00am.

Have Will-Power and Know When You Need to Stop

When your list is finished and you’ve checked it twice, it’s time to stop shopping. Know when you’re finished, and avoid stopping by the mall “just to see what they have” – this can lead to making poorly planned purchases and blowing your budget.

Most people get the itch to shop a few days before Christmas, if this is you, then leave some shopping you NEED for the last days. This way, you will still feel like you are getting something but you are not just “checking things out.”

Time to Use Coupons.

If this isn’t typically you, that is okay but during this time you’ll be wise to utilize coupons. You can get coupons online, via email, through a newspaper and you can even buy a cheap coupon book at the mall. The point is you have choices. Do not buy that $25 dress when you can get it for $15. Be smart because every dollar adds up.

Finally, remember to enjoy this time with your family and if you have to spend, spend wisely. We hope this helps.

 


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.


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.

 


Help Your Parents with Their Financials

How Can You Help Your Parents Manage Their Finances?

As the years pass responsibilities shift. One day you may wake up and realize you have become the caretaker of the family.  Your parents may no longer have the ability to make reasonable financial decisions and you have to step up to the plate.

Research shows that your ability to make financial decisions peaks at the age of 50 and can rapidly decline after the age of 70. However, it can be rather difficult to convince your parents you  (the person they raised) can teach them a thing or two.

Instead of changing their mind, try to encourage them to consolidate and simplify their finances. How?

Lower the amount of opened accounts

Help them bring their money to one financial institution and one brokerage firm. Then help them reduce the number of credit cards they hold. Ideally, you want them to keep 2 credit cards; one for groceries and one for automatic payments.

 

Pick a Power of Attorney

Having power of attorney allows you to have decision over your parents’ financial matters. It is normal for an elderly parent to neglect your recommendations. They see you as the small person they raised and forget you are a grown adult. A power of attorney will make your life a little easier in case something happens to them. You need to have the time to go over all of their accounts, insurance policies and balance sheets if necessary. It takes great responsibility to have power of attorney. All decisions must benefit your parents and you must be involved in their lives entirely. It is also important to be transparent about the decisions you make with your siblings, parents, and all parties concerned.

 

Analyze their Investment Accounts

You have to make sure only 30 percent of your parents’ money is in stock. The rest of their money should be in corporate and government bonds. The reason behind this statement is that your parents need to have immediate access to their money and do not have the time to make up for any losses.

Lastly, if your parents have plenty of money to care for their needs and want to leave some assets behind to benefit grandkids, consult a money manager. It is better to get seek professional help in order to avoid any future issues.