It’s that time of year again — when the hot, languid rhythm of summer is replaced by the hustle-and-bustle of the school year. As carpool lines and algebra homework replace sunny beaches and days at the pool, the new school year means an opportunity to start fresh and embrace new ideas,including how to better manage your personal finances. Think of the back-to-school period as a chance to shore up your budgeting for school-year expenses, plan for the future and teach your children about money management.
“There are a lot of easy-to-use strategies out there that can make a real difference in your day-to-day life, especially when it comes to preparing for expenses related to your kids and family,” says Melvin Harvey, whois the Vice President of Commercial Lending at BSF. “Small changes can make a big difference, and after a while, you won’t even notice you’re saving.”
Get out the fine-toothed comb
Examine your budget to see where you can cut and consolidate expenses. If you have high-interest credit cards, consider opening a line of credit to pay them off since you’ll get a better interest rate. Funnel the savings you find into a BSF savings account and let it grow for a rainy day.You can even use the bank’s Savings Made Simple program to round up debit card expenses to the nearest $1, $5or $10 and deposit the difference in your savings account.
A good rule of thumb is to stash away enough to cover your expenses for three months without income. It’s an important goal, as liquid cash can keep you on solid ground through unexpected events and expenses.
College is coming!
“If you have kids, one of the most important things you can do is open a 529 or START College Savings account for them and put a little away from your budget each month,” Melvin says. “I started doing it for my daughter the day she was born, and I’ll be ready to pay for four years of college in Louisiana when she graduates.”
The bank’s START College Savings Program can be easily opened online. They allow you set up an auto draft each month for whatever amount you’re comfortable saving. Funds are automatically transferred monthly fora seamless integration into your budget. “It’s a great tool for parents to use now for future education expenses,” Melvin says. “The earlier you start, the more you’ll save.”
Preparing for the holidays
It seems like as soon as school starts, the holiday season is already bearing down. How will you pay for all those presents and absorb those extra holiday expenses? “Our Christmas Club fund is a wonderful, free product,”Melvin says. “You save a little each month for the holidays and we mail you a check at the beginning of December.” It only takes $5 to start a BSF ChristmasClub fund and you can open an account up to November 1 of the year you plan to use it.
Teach your children to save
Bank of St. Francisville makes it easy for young people to actively learn about money management by offering free student checking accounts. A parent is included on the account, which provides a student debit card. It’s more convenient than cash, and builds independence since students get in the habit of checking their balance. They can also deposit checks into their accounts electronically by using the BSF mobile app.
Expect the unexpected
Perhaps the most important thing you can remember when it comes to budgeting is to always budget more than you think, Melvin recommends.“Always overestimate when you’re budgeting to cover any unknowns,” he says. If you over budget and costs come in lower than your prediction, then you have extra savings for a future expense.
For help opening a Savings Made Simple, Christmas Fund, orSTART College Savings Fund, call 225-635-6397 to make an appointment.