Money Management for Kids

Some common questions often arise when discussing the topics of money and kids. 

1)      When and how should kids start earning money?
2)      When should they start managing/saving their money?
3)      How do you encourage them to save? 

Kids should start to earn money as soon as they start wanting and needing things.

Adults have all heard from kids “I want this” or “I need that”.  We need to teach them how to earn those items, not just get them. Earnings could be an allowance from their parents for doing daily chores around the house, assisting grandparents, neighbors, birthday money and gifts.  The list could go on and on based on their abilities.   

With that in mind, kids should also start managing/saving money as soon as they start earning money.  Kids will naturally want to spend what they earn.  If they receive $5 from grandma for raking leaves, they’ll want to spend the $5 on something they think they really want or need, then wonder why they have no money.  

How do we get kids to save and manage their money?  We first need to help them put together a plan to earn money. That plan should be fun and workable for them.  Then we need to implement a plan based on the individual. What do they want to do with their earnings?  Do they have something specific they want that’s more expensive?  If so, spending what they earn on smaller, less expensive items will not help them save money to buy that more expensive special item someday.

I offer my children three options with the money they earn.  The first option is putting some money in there wallet to spend on those smaller items that give them immediate satisfaction.  The second option is to have a savings bucket at home to fill for more expensive items.  The third option is a savings account at the bank to save for their future. 

This concept has worked well because they compete with each other to see who saves more and where it’s stored.  If it’s in the wallet, it’s typically spent on junk.  If it goes to the bucket, it’s very likely to accumulate for that special item; and if it goes to the bank, it’s secure and grows interest so they someday have money for education, a vehicle or there first home. 

So parents find a plan that works for your kids and have fun with it! 

By: Brant Drill, Assistant Vice President

The Focus Committee

At Citizens Bank Minnesota, we have a really fun group called the Focus Committee. The Focus Committee consists of 10 employees from different departments along with branch representation. The employee serves a two-year term and when their term is over, someone else from their department or branch will take over. The main purpose of the Focus Committee is to plan fun events for our customers and employees and to create a fun light-hearted work environment while still keeping things professional. Some of the ongoing, fun ideas that we celebrate are supporting Minnesota sports teams, supporting our local high school teams, Red Fridays to support our troops, special events each month for our customers, and weird and wacky national days.  Weird and wacky national days include National Chocolate Chip Day, National Root Beer Float Day, and National Apple Day. We also have a “Happy Birthday to You Day” for our employees, a “Wear Pink Day” to support Breast Cancer awareness, and we celebrate Moms and Dads on Mother’s Day and Father’s Day. So the next time you stop into your local branch, you may be part of a fun event we might be celebrating!

By: Pamela Stoltenberg, Assistant Branch Manager

Tips for Organizing Your Financial Records

How much time do you spend each month trying to locate bills and receipts because you have them in various piles around your house?  Here are some tips to help you get your financial records organized and begin 2011 with a fresh new start.  Having your financial records organized will save you time and is a simple process which only requires monthly maintenance and a little discipline. 

  1.  Keep all of your records in one place
    What you store your financial records in is up to you as long as they are all kept together.  Inexpensive storage ideas that will serve the purpose include a filing cabinet, three-ring binder, accordion file or a cardboard storage box.  Consider renting a safe-deposit box at your financial institution or purchasing a fire resistant storage unit to keep in your home to store those permanent records that would be difficult to replace. 
  2. Separate your financial records by category
    Once you have decided on your storage unit, separate your financial records by categories depending on your needs.  You can use hanging folders, file folders, labels or colored tab markers to separate each category.  Color coding is also a good way to highlight different sections of your files. 
  3. Review and discard unneeded records
    You may accumulate many financial records over time so it is important to know what and how long to keep them.  Generally a good rule of thumb is personal records, including birth certificates, marriage licenses, wills, divorce agreements and powers of attorney should be kept permanently.  Check book registers, bank statements, pay stubs, tax records and returns, should be kept for at least seven years for all tax-related records.  Receipts and warranties for major purchases should be kept as long as you own the item or until the warranty expires.  Those records that you decide to discard that contain personal information should be shredded before disposal.  Proper disposal of these items will ensure that this information cannot be read or reconstructed.   These are only guidelines to follow and if you have additional questions on financial records retention, please consult a financial advisor. 
  4. Keep up on filing
    Once all records have been filed and organized, set aside time each month to maintain and properly file records.   It takes less time to maintain this process than to start over.  Get into the habit of filing records right away when you are done with them, so the task doesn’t seem so overwhelming.

Don’t waste any more time hunting through piles of papers, good financial records organization can help you save time and money while giving you  peace of mind.  Good luck organizing!

By:  Stacy Merkel, Auditor

Young Farmers Getting Started

There is no doubt that in the current environment, it takes help “to get started”.  The help can come from different areas and help can be defined in different ways. 

Help from a parent, grandparent, family member or from a friend of the family can give you the start that you need.  This help can be defined in various ways, such as:

1)     Monetary – Cash for a down payment or inputs
2)     Favorable rent terms on land, buildings or equipment
3)     Use of machinery or equipment to plant or harvest crops and care for livestock
4)     Gift of livestock and feed to get your own herd started
5)     Exchange of labor for offsetting any of the above expense items
6)     Utilizing any government programs that are available to beginning farmers
7)     Working with Citizens Bank staff for financial advice, support and future success 

When deciding how to get started, look at what will create a return on your investment (profit), not a draw or straight cost to you.  Ask yourself, “How do I make money if I do this?” An example would be buying a new pickup for $30,000 – $40,000.  This purchase might cost you $750 in monthly payments.  Is there a way to make money with that pickup? 

If you are able to run a piece of ground, hopefully you would have profits at the end of the first year to “leap frog” you into the next crop year; or if you start with some breeding stock, you should have more numbers of livestock one year from today. 

To be a young farmer getting started, you need to take care of your credit, ask yourself the profit question, and with some help, you can be a success story! 

Tim Hoscheit, Vice President

Building Your First Budget

As a recent college graduate, I was forced to answer a very difficult question:  How am I going to pay all these bills without any help from Mom and Dad?  I’m still working on answering that question, and admittedly have had to return to the “Bank of Mom and Dad” for a small loan to help cover some gaps in paychecks.  One thing I have done that has helped me through this process immensely is to build and maintain a yearly budget. 

If you are a recent graduate of either high school or college, it is very likely that you have never developed a budget before.  No worries!  I found an interesting article from that had some great pointers for building your first budget, and I have pasted a link at the bottom of this entry to the article.  I have also attached an Excel file with an example budget ( for you to use.  Simply enter in the amounts you expect to pay up top, and the amounts you actually paid in the bottom (you may need to add or delete some rows to tailor the budget to fit the actual expenses you have each month).  This will help you determine whether you’re able to keep your budget in check, and will help you identify where you’re spending too much if your budget is going awry.  I filled in January with some example numbers to show you the idea.  Erase those, enter your own figures, and the worksheet should do the rest of the calculations for you!

Notice that the example budget calculates a “Budget/Actual” at the very end?  This is a calculation of the difference between the amount you planned on saving versus the amount you actually saved.  Positive numbers mean you were able to save more than you planned, and negative numbers mean you may have to make some changes to your spending habits in order to reach your financial goals. (Notice in the example budget, my Budget to Actual was a negative $61.89, meaning I saved about 62 bucks less than I had planned on saving – better make some changes if I’m going to be able to afford that Ferrari I’ve had my eye on by the time I’m 30!).

By Joe Geistfeld, Marketing Intern

Good Savings Habits

Do you feel like you can’t get ahead when it comes to your finances? You never seem to have quite enough money to meet all of your monthly obligations and can’t even think about saving for a rainy day. You’re not alone. Many of us feel the same way and have the same issues with our finances. The bad news is there is no magic to make it better immediately. The good news is you can take immediate steps to make it better in the future. Here are three steps to help improve your savings habits and put you on the path to better financial management.

Start Early

Don’t put off saving money until things are better, or until you are making more money. It won’t happen on its own. Start right now by setting up a savings account and putting a portion of your paycheck away every payday. Start small, $5.00 or $10.00 each paycheck and gradually increase the amount. Or better yet, start with a certain percentage of your paycheck, say 5%. This way the amount you are saving will increase as your income increases.

If you have children, teach them from a young age proper money management. Pay them a regular allowance for chores they complete around the house. Sit down with them each time they receive their allowance and decide how much they will save, 5%,10% or more, and then divide the rest into how much they can spend, how much they will donate to charity, etc. Do the same with money they receive for birthdays and Christmas. Teaching them good savings habits now will insure that they will be able to handle their finances properly when they grow up.

Make It Automatic

Many employers now require that your payroll be directly deposited to your bank account and most of them will deposit it to more than one account, if requested. Set up a separate savings account and have a portion of your payroll deposited to that account. This makes saving automatic. You will soon learn to live on less income and not miss the amount being saved. If you don’t have direct deposit of payroll, ask your bank to set up automatic transfer from your checking account to your savings account and treat that transfer like a bill that must be paid on a regular basis.

Even better, set up two savings accounts, one for specific savings goals (trade autos, house downpayment, etc.) and one for emergencies. Use the second savings account only for true emergencies like unplanned auto repairs or medical bills. After you have a balance in this account equal to a least 3 months payroll, start transferring the excess funds to a more permanent savings vehicle (CDs, mutual funds, etc.) that pay better returns.

 Credit Cards

Credit cards have become almost a necessity in our lives whether for making a reservation at a motel or renting a car, many businesses require that you have a credit card to do so. We are often tempted to use our credit card when we don’t have the immediate cash to pay for something. Avoid that trap at all costs. If you don’t have the excess cash to pay for something, ask yourself if you really need it and resist the urge to “buy it now”. Make a plan to save the money needed to make the purchase.  If you do have to use your credit card, try to pay the entire balance off each month. This will keep you from going deeper into debt and help avoid paying finance charges which can double or triple the cost of your purchase. If the balance is too large to payoff all at once, pay as much as possible and always pay more than the minimum amount due. If you manage your credit card balances wisely, you will be amazed at how much more you have available to save.

These three steps will help you improve your savings habits and “have more money left at the end of the month”. Your finances will be less stressful and you will enjoy watching your rainy day funds grow. 

By: Robert Wise, Vice President

The Truth About Refinancing

Mortgage rates are low but does that mean refinancing is right for you?  Everyone has different goals or situations in their life.  One size doesn’t fit all when discussing mortgage refinancing.

A few things to think about when considering refinancing:

1)     Are you looking for additional monthly cash flow?

2)     Do you want to shorten the term of the loan and save interest expense?

3)     Should you refinance the existing mortgage and pull additional equity out of you home for various reasons?

4)     Will you be moving out of your current home in the next 3-5 years?

5)     What are your personal financial goals?  Age of children, retirement, etc.?

We’ll ask these questions so that we can give you the best advice and options.

If you are shopping to refinance your mortgage:

1)     Beware of the full cost of refinancing your mortgage.  The rate is only a part of the cost.  It is very important that you also know what your total closing costs will be.  It is a “package deal”.  You may be quoted a low rate only to find out that the closing costs are very high.  Review the closing costs and understand what they are.

2)     Is it important to you to be able to stop in and talk directly to your mortgage lender or are you comfortable with contacting your lender via an 800 number for questions or service?  This is the difference between a Service Retained and Service Released mortgage loan.

To summarize:  Be comfortable with your mortgage lender.  Trust that person to do the best job for you and to put your best interest first!

At Citizens, we are available to answer any questions that you may have.  Our goal is to make sure that our clients have the right mortgage!

Shirley Laraway, Vice President

Equal Housing Lender - larger

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