Tag Archives: spending

Nature v. Nurture: The Psychology of Spending

Psychology of Spending

If you’ve ever taken Psychology 101, you’ve probably heard the argument for nature v. nurture. In this multi-century discussion, psychologists have debated whether a person’s genetics or environment make a greater impact their personal behavior. At Titonka Savings Bank we’re excited to share our take on this timeless debate, and share how nature and nurture affect your spending habits.

The financial traits which we see as more nature based are:

  • None

Are you surprised? Contrary to many personal opinions, financial lessons and preferences are 99.99 percent teachable. This concept is backed by an interesting study in which children were given one marshmallow immediately, but were given another if they could occupy themselves until the tester returned to the room. Researchers found that the kids who were able to wait to receive the second marshmallow went on to have more successful ACT scores and other measurably improved personal relationships. This information is particularly interesting due to the fact that delayed gratification is a skill, which can be taught from a young age.

Delayed gratification is one of the initial skills learned for financial education in the form of savings. For this reason, it is practical to begin a child’s understanding of finances with this particular task, however, there are many other aspects of managing your money that can be tied to these initial skill sets as well.

The financial traits which we see as more nurture based are:

  • Whether you prefer to save or spend.
  • The specific items you enjoy saving or spending for.
  • Your skillset for prioritizing tasks and expenses.
  • The desire you have to compare yourself to others.

While the list of nurtured traits could go on for miles, the important fact is that like any other skill, fiscal education can be learned through practice and continued repetition.

If you want to grow your personal financial skills set, we recommend starting with a household budget and saving plan. By committing to these two monthly activities you can start to build a foundation of learning to ensure you are adhering to the best financial practices.  As you grow your understanding of finances, adding in a retirement savings plan and debt repayment schedule can be valuable steps to gaining your financial freedom.

To start teaching your child these valuable lessons, we suggest great activities (like these) to help them understand the value of waiting. Simple games such as Mister Noodle can provide valuable comprehension for your child early in life.

The Argument for a Monthly Money Meeting

Money Management

Whether you’re recently married, or you’re approaching your 30th anniversary, you know that money can be a topic of controversy among couples and families. Even in the most perfect relationships hardships happen, and decisions have to be made. At Titonka Savings Bank, we think there is a helpful and long-term tool that can help you have less conflict and more compromises while contemplating both goals and solutions. The answer is relatively simple, talk it out, however, the complicated part is how.

The first thing you need for a successful money discussion is an agreement between all persons to refrain from defensiveness and accusation. With this mindset you can openly consider both positives and negatives of past and future financial decisions. Each month set a time where you and your spouse or family can get together and determine your current financial landscape. Discuss the highs as well as the lows, and gain perspective from each individual on where they feel the money is best spent or saved. Once the past month is discussed, start making a list of any suggested changes for the upcoming month.

The list should detail any adjustments that are going to be made, and the desired outcome they hope to generate. The meeting participants can then choose which, if any, changes are warranted and should be enacted.

This meeting not only keeps a continuous dialogue with you and your spouse or family, but also allows you to have a fresh look at your finances every month, ensuring all bills and saving initiatives have been completed before the meeting takes place.

Other great tips we suggest to continue improving your money management:

  • Calculate your net worth every six months. This will help you with the large scale view of your family’s financial well-being and see where you can find additional ways to continue to grow.
  • Set new goals when you surpass the old ones. The worst thing you can do for your finances is to do nothing. If you knock your latest goal out of the park, Titonka Savings Bank challenges you to make an even more challenging goal and find a way to make it happen.
  • For spouses, have joint and individual accounts. By structuring your finances together and apart you can ensure your joint account holds all the necessary funds for any household expenses, while each person’s private account can be used at their own discretion.
  • Designate a bill payer. Determine who in your house will be in charge of paying the monthly invoices and balancing the checking account throughout. By allowing one person to be responsible for this task you can ensure bill are not able to be missed due to misinterpreted communication.

7 Items Worth the Splurge

Spending

When you make your savings plan, you often don’t think about the things you should spend extra money on. While scrimping on other items such as groceries or kids clothes could help you in the long run, there are some expenditures that could cost you in the future if you don’t pony up for the better option. At Titonka Savings Bank, we suggest taking a second look at these seven products, and seeing if you need to upgrade the next time you buy:

Toilet Paper: You may not think it’s necessary, but let’s be honest; when you’re staying at a hotel that doesn’t have the good stuff, you notice. Household items such as toilet paper or garbage bags are bought to complete a task, and if they don’t complete it well or comfortably then it’s time to reconsider your options. We believe this product is worth the extra couple bucks, but we do recommend saving by buying in bulk!

Office Chair: If you’re like many Americans, you may spend a majority of your day sitting down. To avoid chronic back pain, and a slew of other ailments, we recommend investing in a comfortable and reliable office chair. If your employer is willing to pay for all or a portion of the chair, be sure to offer your measurements to be sure their options fit your height and weight specifications.

Mattress: Did you know you spend 33 percent of your life sleeping? For such a large portion of your time, you’ll want to be sure you’re getting the best sleep possible. Avoid those box store less costly options, and test out a few of the higher end options available in your budget. Not only can you sleep better, but you may find yourself spending less on coffee or energy drinks as well.

Pillows & Bed Sheets: While the mattress will make the biggest impact on the quality of your sleep, upgrading your thread count and purchasing the proper pillows can make a world of difference as well. Something as simple as changing the firmness of your pillow could help you sleep through the night more soundly.

Work Clothes: Sweats, shorts, and other home attire may not require the added expense, but the clothing that you wear to portray yourself at work should come across as professional while also remaining intact over time. We suggest finding one or two brands that fit both your budget and your style, and selecting key basic pieces to compile a wardrobe of endless combinations.

Garbage Bags: Do you enjoy it when you go to take the trash out in the early morning and just as you reach the bin, the bag breaks across your feet? No, neither do we. We agree that it is more than worth the extra dollar or two for the name brand bags that won’t break. After all, if the bag breaks, that means you’ll need to take a shower too!

Data Plan: Every cell phone provider seems to come out with a brand new plan option as soon as a new phone is released. While the choice of phone is completely up to you, we think that the data plan should cover not only what you think you’ll use, but some buffer room too. Instead of paying the expensive overage fees every time to go over your data limit, we recommend purchasing a more comprehensive plan to ensure you have a little extra space when you need it.

These seven things will prove their worth in the long run, and many items only require a one-time investment. If you have any other items you think we should add to our list, let us know on our Facebook page. We’d love to hear from you!

What’s Your Spending Style?

Spending Style

What’s Your Spending Style

Everyone spends and saves differently. There are spending personalities on all ends of the spectrum that range from extreme spenders to tireless penny pinchers. Discover what type of spender you are with this helpful quiz courtesy of Titonka Savings Bank.

 

What’s your typical lunch during the workweek?

A: A packed lunch, typically leftovers from the night before.

B: A variety of prepared lunches from home and a handful of take out meals throughout the month.

C: I usually grab something from one of the local restaurants during my lunch break, occasionally I’ll bring something from home if it was really good.

D: I can’t get through the day without my latte in the morning, and a solid lunch out of the office in the afternoon.

 

How important is your credit score to you personally?

A: I live and breathe by this number, it influences almost all of my buying decisions.

B: I check my credit every month, it’s important to know where you stand.

C: I have a general idea where I’m at, but it’s not the first thing on my mind.

D: What’s a credit score?

 

If you want a something that is $3,000 but you only have $1,500 available funds in your account what would you do?

A: Wait until I can save the additional $1,500 I need before purchasing it.

B: Compromise on a similar item that only costs the $1,500 I currently have.

C: Purchase the $3,000 item, paying $1,500 up front, and putting the rest on credit.

D: Purchase the $3,000 item and put it all on credit.

 

What does retirement savings mean to you?

A: Roth IRA, 401(k), stocks, bonds, and personal savings.

B: Using my work benefits along with personal savings.

C: I think I get something for retirement through my place of employment.

D: Something I don’t have to worry about until I’m older.

 

When you see an exciting impulse buy, how do you manage the situation?

A: I remind myself I’m here for these 5 items and nothing else.

B: I remember I already bought a small impulse buy yesterday, so this one could potentially harm my budget.

C: I made it through the work day today, I deserve this.

D: I already have 4 other things I wasn’t expecting to buy, what’s one more?

 

If most of your answers were [A] then you are a Penny Pincher: For you, finances are the key to your existence. All aspects of your financials are crafted into a strategic plan to make the most out of your various savings accounts. You’re the first to suggest a restaurant based on cost, and the last to splurge on a large purchase. Typically you’re also the person other family members typically ask for well-rounded financial advice.

 

If most of your answers were [B] then you are a Balanced Budgeter: In your world, the life of a budget doesn’t have to centered around a hunker down mentality. A budget is a fluid medium that is meant to be customizable to you and your needs. Occasionally an added expenses or unforeseen purchase is needed or warranted, but overall, you ensure you and your family stay on track with a well thought out financial plan.

 

If most of your answers were [C] then you are a Cautious Creditor: Although much of your financial expertise is based on credit card rewards, and other point benefits, you do care about your money management. While not all your choices are made to help boost your savings, there are certain measures you take on a continual basis to help push your financial goals forward.

 

If most of your answers were [D] then you are a Debt Developer: Often times you spend more than you intend. Between check-out line snacks, and lunch time splurges, your bank account just tries to keep up. Understanding your financials isn’t necessarily first on your list of priorities, but there are certainly some things you know you could improve. You appreciate the things you purchase and genuinely enjoy the experience of shopping.

 

No matter what type of spender you are, Titonka Savings Bank is here to help you succeed. For everything from setting up savings accounts, to consulting on wealth management, we have everything you need to continue your financial success. Give us a call at (515) 928-2142 or stop by today to get started!

Money Lessons at Every Age

Money Lesson

Money Lessons At Every Age

No matter what your age, there are always exciting new aspects to understand in the realm of money management. This year help your children get a head start on their financial education with these key lessons courtesy of Titonka Savings Bank.

2-5 Years Old: The Three Jars Activity
In your child’s youngest years it is important to give them a basic financial understanding. You can help your little ones comprehend savings, spending, and donating through three simple jars. Each week give your child 50 cents or a dollar, all in quarters. It is then their decision whether they want to save it for a bigger toy or purchase, spend it on something smaller, or donate it to help others in need. This activity works to help create a general thought process of the three common ways to spend or accumulate funds.

5-13 Years Old: Budgeting Basics
For everything from buying groceries to new clothes for school, you can help your child learn how to budget by setting a spending limit for your various shopping trips. By allowing your little ones to participate in the purchase process, you can help educate them in the importance of staying on or under budget. Let them help you find bargain deals or clip coupons to reduce cost. When the expenditures come in under the budget, reward their efforts with a small treat.

14-18 Years Old: How to Build Your Financial Reputation
Correctly making payments is a pinnacle point in proper money management. Whether it’s purchasing your first car, home, or other personal purchase, learning how to correctly pay off your loan, can be the difference between good and bad credit. Get started on this important lesson with a quick tutorial on how you pay any monthly bills or debts. Show your child your system to give them an introduction into how the process will take place. Once they choose to purchase a car or other item through a personal loan, you can walk them through the payment process online, and help them make a calendar of when installments are due.
Whether your little one is two or twenty-two, there is always something new to learn. Stop by Titonka Savings Bank and see how you and your family can improve your money management skills today!

The Psychology Behind Why Spending Money Feels Good

blog-spending

Your eyes aren’t to blame for that last impulse buy, but your blame. Its reward center blitzes out with feel-good chemicals following a purchase, making you crave that post-purchase high even more in the future. (Dubious? Read up on therapy for shopping addiction for more proof.) Titonka Savings Bank is here to help you understand your brain’s cravings – and how to fight back.

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