Five Tips to Financially Prepare for Parenthood - Early Spring 2015
If you are thinking about expanding your family, there’s no better time than now to start saving. From healthcare expenses to unpaid time off work to shopping for all the necessities, a new baby will bring a variety of new expenses into your life. The following suggestions will help you to successfully work out the financial details of this joyous life change.
- Start saving now: When possible, it’s best to prepare for the added cost of parenthood ahead of time. The average yearly cost of a new baby is $12,940, according to the USDA. Estimate expenses and then try to save that much each month in the months leading up to the birth. Additionally, you should consider open a savings account for baby. You should always make sure your own emergency savings fund and retirement accounts are taken care of, but it’s important to pay into your baby’s savings account every month once you’ve established your budget to help with future expenses, including a college education. First National offers savings accounts with competitive interest rates to help you save even more.
- Explore employer and insurance benefits: Research the amount of leave your employer offers, and what portion will be paid. Determine if you will need to save ahead of time to make up for any lost wages during maternity or paternity leave. Also, review your insurance plan’s maternity and childcare benefits, and begin saving now for any out-of-pocket costs.
- Save on out-of-pocket expenses: There are plenty of ways to save money after you bring home your baby. Create a registry so your family and friends can help out with the big purchases such as car seats, strollers and cribs. Consider using cloth diapers or buying generic brands, instead of name-brand disposables. Try breast-feeding to avoid the high cost of formula, or buy formula in bulk at warehouse stores. Shop at secondhand stores and frequent garage sales for clothing and toys.
- Re-evaluate your life insurance policy: Update your life insurance policy to account for your newborn to help ensure that if you die, your family will be able to pay for life’s basic necessities, as well as future expenses such as your child’s college education.
- Create or modify your will: Every parent should have a will to ensure your child is cared for by the people you choose if anything should happen to you. Through your will, you are able to designate a guardian to care for your child and to serve as a trustee for any money your child will be slated to receive in adulthood.
Holiday Shopping Survival Tips - Winter 2014
The holidays are a time for holiday cheer, but getting into the holiday giving spirit doesn’t mean you have to take on additional debt and anxiety while finding the perfect gifts for your friends and family. The following tips will help you prepare for the holidays while sticking to your budget and enjoying a stress-free holiday season.
- Set a Budget: Set a budget and make a shopping list ahead of time. Deciding how much you can afford to spend upfront and tracking your expenses along the way will help ensure you don’t go overboard financially. If you don’t have a plan, you are much more likely to make impulse purchases and spend more than you can afford.
- Start Early: Earlier is usually better when it comes to shopping for the holidays. Not only does it allow you to spend more time finding meaningful gifts for your loved ones, but it can help you save by spreading out your gift budget over a longer period of time, instead of spending a large amount during just one month.
- Comparison Shop: Use the power of the Internet to find the best deals. There are a variety of shopping apps available that take the stress out of comparison shopping and allow you to compare both online and brick and mortar store products and prices.
- Support Local Businesses: Support small businesses in your neighborhood and save gas, time and stress while finding unique and unexpected gifts that you may not find anywhere else.
- Schedule Your Shopping Trips: Avoid shopping malls on weekends and shop early or late in the day during the week. Not only will this save you time, but smaller crowds will mean you can have more freedom and space to shop around and find the best deal.
- Watch for Free Shipping: When online shopping, sign-up for emails from your favorite sites and keep your eye out for free shipping to get additional bang for your buck.
- Get Creative: Instead of buying a gift for each one of your friends and family members, find low-cost ways to give. The gift of food is always appreciated. Or consider partaking in a holiday gift exchange and draw names to only buy one gift for one person.
- Start Saving for Next Year: Open a First National Bank Southwest savings account to start saving for next year’s holiday season. Saving just a small amount each month can make a huge difference and ease the stress for next year.
Health Savings Accounts: What's Covered? - Fall 2014
With the rising costs of healthcare, Health Savings Accounts (HSAs) are becoming more popular each year and can be a smart way for you to plan for future healthcare costs. These savings accounts are a great way for individuals covered under a high-deductible health plan to set aside pre-tax money to be used for qualified medical expenses. From co-payments to pharmacy bills to a new pair of glasses, consider the following factors to use tax-free dollars to supplement what is already covered by your medical insurance.
Benefits of Health Savings Accounts
HSAs offer many financial benefits, according to IRS.gov, and are a simple and flexible way for you to cover many common medical expenses.
- Earn interest, tax-free: Contributions to your HSA are made pre-tax, and you will not be taxed when you withdraw funds to pay for qualified medical expenses.
- Contributions remain in your account until you use them: Unlike other medical savings plans including Flexible Savings Accounts where you ‘use it or lose it’ by the end of the year, contributions to your HSA will remain in your account until you withdraw them.
- Keep your savings if you leave your job: HSAs are portable and stay with you if you change employers or leave the workforce.
- Ability to claim a tax deduction for contributions: You can claim a tax deduction for contributions that you make to your HSA, even if you don’t itemize your deductions on Form 1040.
- Opportunity to receive employer HSA contributions: Some employers contribute to HSAs and these contributions may be excluded from your gross income.
Below are just some of the most common eligible medical expenses that can be paid for with your HSA. For a full list of eligible medical expenses, visit IRS.gov.
- Insurance Co-Pays and Doctor’s Fees
- Prescription Drugs
- Vision Care (including eye examinations, glasses and lenses, contacts, saline solution and cleaner and laser eye surgery)
- Dental Care (including X-rays, cleanings, fillings, extractions, dentures and orthodontics)
- Alcohol and Drug Addiction Treatment
- Home Care, Nursing Homes and Nursing Services
- Chiropractor Fees
- Therapy or Counseling (including alcoholism or drug addiction treatment)
- Fertility Treatment (including in vitro fertilization)
|Calendar Year 2014||Calendar Year 2015|
|Self Only||Family||Self Only||Family|
|Annual HSA Contribution||$3,300||$6,550||$3,350||$6,650|
|HDHP Minimum Deductible||$1,250||$2,500||$1,300||$2,600|
|HDHP Out-Of-Pocket Limit (includes deductibles, co-payments, and other amounts but not premiums)||$6,350||$12,700||$6,450||$12,900|
|Catch Up Contribution Limits||$1,000||$1,000|
Our First National Health Savings Account features no setup fee, no minimum daily balance, free checks, as well as the ability to pay with a Health Savings Visa® Debit Card. Learn More.
Ways to Save on Your Summer Travel - Summer 2014
Summer vacation is just around the corner. From dining tips to the best online deal sites to finding the best place to stay, use the following tips to help you save while traveling with your family or friends this summer.
- Instead of planning your vacation during peak summer travel time (usually early August), consider taking an early summer trip in June to get the best summer rates.
- Avoid traveling on holidays including Memorial Day, 4th of July and Labor Day.
- Consider not booking in advance and use apps like Hotels.com while on-the-go to find last-minute availability for the best rates.
- Book a hotel that includes complimentary breakfast or happy hour.
- If you are flying, have flexible travel dates to find the best fares.
- Watch for fare sales and sign up for price alerts from your favorite airline.
- Avoid flying on Fridays and Sundays as these days typically have the most expensive fares.
- Sign up for travel rewards programs to begin accumulating frequent flyer miles for your next getaway.
- If your airline charges for checking luggage, make sure to pack efficiently and just bring one carry-on item.
Food & Entertainment
- Stock up on lunch and snack food for your road trip. Not only is this a healthier option than stopping for fast food along the way, it will save you time and money.
- Research activities and dining options with online deal sites including Living Social and Groupon before you go. This can save you more than 50% on expenses you will most likely spend anyway.
- Request a visitor’s guide for your destination and research free attractions. Typically museums will offer a discount or free day each week, which can help eliminate costs.
- If you have a student or military member in your family, don’t forget your student or military ID to take advantage of potential discounts.
These practical tips can help you and your family enjoy a relaxing, enjoyable summer vacation without breaking the bank. Always remember planning and saving ahead of time can even further limit the financial burden of a getaway. First National’s Savings Accounts, with competitive interest rates, can help you save for your next vacation. Click here to find a savings plan that’s right for you.
A Guide to Spending & Living Within Your Means – Early Spring 2014
Living within your means doesn’t have to mean eliminating the things you love in life. Creating a detailed budget, tracking your spending, saving for unexpected expenses, and finding simple ways to enjoy your favorite things for less can help you avoid building up debt and struggling financially.
Be aware of all income and fixed expenses. Evaluate your current financial situation and create a budget containing an itemized list of your income sources and amounts (paychecks, pension, freelance, etc.) and all of your monthly bills (from your cell phone bill to your mortgage payment).
Create a list of essentials. Essentials include expenses that are necessary to live your daily life such as groceries, gas or transportation costs, and personal hygiene and health products. Make sure to separate your ‘needs’ from your ‘wants’ and do not include costs associated with entertainment, dining, or splurges on clothes or electronics.
Set a savings goal. Ensure that you are saving a portion of your income each month to prepare for unexpected expenses, as well as future purchases such as a family vacation or a new car or home. Use our online calculator ‘What will it take to save for a vehicle, home, etc?’ to set a goal and help determine how much you should automatically transfer to your savings account each paycheck.
Track your spending and saving. Track all income, spending and saving contributions to stay on track. First National’s online banking allows you to monitor your accounts 24/7, easily pay your bills, and manage your finances.
Stick to a fixed monthly budget for your ‘wants.' Be smart when spending your discretionary income. Do you really need a latte every morning before work? Maybe cut back to once a week. Or instead of treating your family of four to an afternoon at the movie theater, rent a movie and spend some quality time together in the comfort of your own home. Setting monthly budgets and ensuring you don’t go over will only help you in the long run.
Constantly re-evaluate your finances. Your income, expenses, needs and wants can, and will, change over time. Major lifestyle changes such as marriage, starting a family, buying a home or starting a new job can all affect your finances. Make adjustments as needed to ensure you are still covering your expenses while saving for the future.
Keeping your goals in mind and making small changes to your spending and savings habits can make all the difference when it comes to comfortably living within your means now and providing a secure financial situation for your family for years to come.
Top Ten Tax Savings Tips – Winter 2013
Tax season is right around the corner, so starting to prepare now could potentially lead to a larger tax refund or a smaller tax bill.* Consider the following tax savings tips from the IRS to reduce your taxes.
#1: First National Bank Southwest customers receive a discount if submitting their taxes through TurboTax. For more information, visit www.fnsouthwest.com/turbotax
#2: If you are a college student or are the parent of a student, be sure to check if you are eligible to receive an education tax credit to help offset education expenses. The American Opportunity Tax credit can be up to $2,500 per eligible student and the Lifetime Learning Credit can be up to $2,000 for qualified education expenses on your federal tax return.
#3: For those who are paying on qualified student loans, you may be able to deduct the interest you paid and reduce your taxable income by up to $2,500.
#4: Newlyweds should consider itemizing tax deductions. Even if you didn’t qualify to itemize deductions before you were married, you may save money by itemizing rather than taking the standard deduction on your tax return.
#5: If you have accrued job-hunting expenses this year, these costs may be eligible to deduct. The expenses must be for a job search in your current occupation, and you cannot deduct job search expenses if there was a substantial break between your last job and the time you began looking for a new one. You can deduct job placement agency fees, travel expenses related to finding a new job, and the cost of preparing and mailing copies of your resume to prospective employers.
#6: If you are donating to qualified charities, you can generally deduct your cash contributions and the fair market value of the property you donate. Keep records of all donations, regardless of the amount and keep a written record of all cash contributions to claim a deduction, such as a cancelled check, bank or credit card statement or payroll deduction record.
#7: Working parents may be able to deduct eligible childcare expenses. You must pay for care so you, and your spouse (if filing jointly), can work or look for work. You must have earned income and must pay for the care of one or more qualifying children under the age of 13. The credit is a percentage of the qualified expenses and can be up to 35% percent of your expenses, dependent on income.
#8: If you have recently sold your home and made a profit from the sale, you may be able to exclude part or all of the profit from your income. This rule typically applies if you have owned and used the property as your main home for at least two of the five years before the date of sale.
#9: Get free tax helping using the different IRS social media tools available including YouTube (http://www.youtube.com/user/irsvideos), Twitter (@IRSnews, @IRStaxpros and @IRSenEspanol) and the free smartphone app IRS2Go.
#10: E-file your tax return to receive a quicker tax refund. The IRS typically issues most refunds within 21 days via direct deposit. Or, if you owe tax, you can setup easy automatic payment dates before or on the April 15th due date.
*Consult your tax advisor to determine whether or not you qualify for these tax savings.
Start your Holiday Savings Now - Fall 2013
The holidays are right around the corner, which means busy shopping centers, cheerful times with friends and family and, often times, a large shopping and gift list. By planning ahead and saving now, you can lessen the impact the holidays will have on your checking account.
- Review Last Year's Spending: By auditing your spend from the previous year, you can challenge yourself and set a lower budget goal. Open a First National savings account to use only for the holidays, start setting money aside now and continually monitor your savings progress towards your goal.
- Start Shopping Now: Make your gift list and start the search. Shopping a few months ahead will help you avoid seasonal price increases and will give you more time to shop sale and clearance items in order to find that perfect gift. Additionally, if you are doing your shopping online, ordering early will help you avoid expensive rush shipping charges.
- Buy Groceries Gradually: By planning your menu and buying food items that won’t spoil in advance, you can save later. Stock up on flour and sugar now for your baked goods, and watch for sales on ham or turkey that can be frozen now and then used for your holiday dinner.
- Stock Up on Gift Wrap: You don’t need to use holiday-specific wrapping paper for your gifts. Watch for wrapping paper or gift bags with plain colors or simple patterns to go on clearance. Save tissue paper throughout the year and use last year's holiday cards to make your own gift tags.
- Book Your Travel Early: If you are planning a holiday vacation or visiting loved ones in another city, book your travel early, as prices will typically increase the closer it gets to the peak season. Comparison shop using travel sites to find the best deal.
- Volunteer: As the holidays draw closer, save on entertainment expenses and spend time with your family volunteering for a local charity. This will help you celebrate the season of giving, without spending any money, by giving back to others and enjoying each other’s company.