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 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 Community College Can Save You Money

Financial benefits of taking classes or earning a degree at a community college

To college hopefuls, the financial burden it represents can be daunting. However, community colleges offer multiple money-saving opportunities while still allowing you to earn an education.

  • Tuition savings

Tuition is perhaps the most immediate money-saving benefit of applying to a community college rather than a larger four-year university. Hocking College lists the average cost of tuition and fees at a four-year university as follows: One year at a private school runs an average of $33,480, and one year for in-state residents at public schools runs an average of $9,650. Comparatively, community college costs an average of $4,900 per year for public institutions and $15,478 per year for private institutions. Hocking College notes that community colleges only require two years of schooling while traditional colleges require four. As such, the price difference becomes far more pronounced when multiplied.

  • Room and board savings

Another source of savings, as pointed out by The Princeton Review, is room and board. Because there is a community college located within 90 percent of U.S. residents’ commuting distances, this allows students to continue to live at home while they complete their degrees.

  • Job savings

Community college students often take classes part-time while keeping their job. This allows the chance to save up money or pay for classes going forward. Hocking College says that this could be an especially good choice for nontraditional students, such as parents or older students, who simply don’t have the ability to take full-time classes.

Even if the student is not of a nontraditional group, community college degrees are only two-year degrees. This means that students can go into the workforce in half the time it would take attending a four-year school, giving them a head start in the workforce.

  • The 2+2 plan

Community college can also help students whose ultimate goal is to complete a bachelor’s degree at a four-year institution. The method for doing so is often referred to as the “2+2 plan.”

The plan involves taking advantage of the above sources of savings for two years at a community college before transferring the credits to a larger university to complete a degree. According to U.S. News, many community colleges offer agreements that ensure student credits will transfer to certain four-year schools. It described the situation in Massachusetts, where community college graduates with a GPA of at least 2.5 can transfer all credits, guaranteed, to any state university by using the Joint Admissions or MassTransfer programs.

In theory, this academic plan could result in a significant savings when pursuing a bachelor’s degree. However, both U.S. News and Dr. Robert Ronstadt, a former vice president of Boston University writing for Forbes, offer warnings about the 2+2 plan.

U.S. News says that not all four-year institutions accept credits from all community colleges, so students should speak to advisors at both schools to make sure that transfer credits are accepted, and under what circumstances they are accepted.

Dr. Ronstadt says that the 2+2 plan can also lead to trouble if it isn’t completed properly. The problem, he says, is that to achieve the savings promised by the 2+2 plan, students absolutely must graduate in the implied four years. If classes at the larger university prove to be difficult or not enough credits transfer, causing the student to take 3 or 4 years at the second school, the savings from the two years in a community college are swiftly consumed. In addition, to successfully complete the 2+2 plan the student needs to be a full-time student at the community college, which could put an overwhelming burden on students who need to work to pay expenses, potentially causing schoolwork to suffer and jeopardizing the transfer to the four-year school.

Overall, community college can definitely save students money due to lower cost of tuition, convenience of location and the option to work while taking classes. Whether the student then uses these boosts to transfer to a bachelor’s program at a four-year school or to graduate and enter the workforce is up to them.


4 Ways to Start Investing in Your 30’s

If you’re in your 30s, now is the time to prioritize investment

Your 30s are a time of transition. While you are no longer in the beginning years of adulthood, retirement is still far away. Investing may seem like less of priority than starting a family, purchasing a home or paying off student loans.

While these are important goals, your 30s are a crucial decade for investing. According to finance writer Paula Pant in an article for The Balance, if you begin saving for retirement at age 30, you will need to save at least 15 percent of your income to retire at age 65.

Whether you’ve already prioritized investing or need a place to begin, these are some options to help you build wealth and save for retirement.

 

  1. Focus on your 401(k)

If your employer offers a 401(k), maxing it out is one of the most important investing steps you can take in your 30s. According to the IRS, the maximum you can contribute in 2018 is $18,500. Your contributions are taken from your paycheck before taxes and are not taxed until you make withdrawals for retirement. “Perhaps best of all, many employers will match your contributions, at least up to a cap,” finance writer Arielle O’Shea notes in a February 2017 article for NerdWallet. “That’s free money you won’t find through other offerings.” If you’re unable to contribute the maximum amount to your 401(k), taking full advantage of your employer’s match is a good place to start.

 

  1. Consider a Roth IRA

If you’ve maxed out your 401(k), or if you don’t have access to one, consider opening a Roth IRA. According to O’Shea, Roth IRA contributions “go in after tax, which means no tax in retirement. Your money also grows tax-free in a Roth IRA.” For 2018, the IRS says you can contribute $5,500 to a Roth IRA unless your income is above $120,000.

 

  1. Other investment accounts

Beyond your 401(k) and Roth IRA contributions, investing in stocks is another avenue to consider. Picking individual stocks is one option, although successfully doing so requires a high level of research and expertise. Another option is an index fund. According to finance writer Dayana Yochim in an August 2017 article for NerdWallet, “When investors buy an index fund, they get a well-rounded selection of many stocks in one package without having to purchase each individually. And because these funds simply hold all the investments in a given index … management fees tend to be low. The result: Higher investment returns for individual investors.”

 

  1. Investment risk

Any investment involves risk. However, O’Shea writes, “Risk is one reason there’s such emphasis on investing when you’re young—young people have a long time horizon before retirement, which means they can worry less about short-term volatility. That allows them to accept risks that should lead to higher average returns over the long term.” For example, stocks offer a higher return on investment, but they are also riskier. Bonds and mutual funds carry less risk but a lower return rate. A more aggressive investment strategy for your 30s might emphasize a heavier allocation of stocks with a smaller percentage of bonds. Then, as you get older, you can slowly shift your investments to focus on safer holdings.

 

While in your 30s, it is important to prioritize investing in retirement, especially if you’re only just getting started. Whether that’s the case or you’re building on what you’ve invested, the additional effort will help put you on the path to peace of mind and a secure retirement.