Financial Literacy

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At First State Bank, we believe financial confidence starts with understanding. Our commitment to financial literacy is rooted in helping our customers make informed decisions at every stage of life. This page is designed to provide helpful resources, practical tips, and guidance to support your financial well-being. And if you ever have questions or need personalized advice, your local First State Bank team is always here to help.





















Educational Resources Designed to Build Financial Understanding and Confidence.

Explore practical insights on managing your money, making informed decisions, and recognizing risks that can impact your financial well-being.

You work hard for your money. When you commit to saving, you commit to making your money work hard for you. It takes intention and a little planning to create a savings plan, but once you do, you’ll see how easy it is. Saving, like anything else, is a habit. Getting started is what holds people back—so start now and don’t look back. Here are seven ways to help you save effortlessly. 
 
#1 Open a Savings Account
This simple yet powerful action goes a long way in helping you gain control over your money, track progress, and build momentum. There are many types of accounts to choose from, depending on your goals and where you are financially. If you’re just starting out, aim to open a savings account where you can easily maintain the minimum balance required as well as earn competitive interest or rewards. An account gives your desire to save a physical place to take hold.
 
#2 Automate your Savings
Once you open your savings account, link it to your checking account. Then set up automatic transfers from checking to savings—or from your paycheck directly into your savings account. This ensures you are consistently saving without handling the funds yourself. Essentially, you remove yourself from the process. When you don’t actively move it yourself, saving becomes seamless. And because you are not made aware it’s happening month to month, you won’t miss the funds either.
 
#3 Make Saving a Mindset
When you believe you can, you will. When you tell yourself you are doing it, you’ll do it. For starters, set clear and meaningful goals on what you want your money to do and why. Is it to save for a home? Build financial independence? Retire well? Start a family? All of these are meaningful reasons to save, making it less restrictive and more purposeful. When you focus on the value of saving—and the many benefits to be gained from it—you’ll find it less tempting to spend frivolously and easier to delay gratification.
 
#4 Create a Budget and Track Spending/Saving
There are many different types of budget formulas to follow. A popular one is the 50/30/20 budget, where you allocate 50% of your after-tax income to needs (essentials like rent, utilities, groceries), 30% to wants (discretionary spending like entertainment, dining out), and 20% to savings and debt repayment. Once you have your budget, you’ll want to track everything you spend. Take advantage of the many tools available—from online and mobile banking services to apps and spreadsheets—that make it easy to monitor the money coming into your household and the money being spent. (Pen and paper works, too!) Be sure to log your spending as soon as you make a purchase. When you have this clarity, it’s easier to cut back on what you decide is unnecessary and redirect more funds to your savings. Regularly revisit your budget to ensure it meets your evolving goals.
 
#5 Make Friends with Fellow Savers
Take to heart that old expression "the people you keep." Surround yourself with friends and neighbors who have like-minded values related to money and financial responsibility. Together, you can share knowledge and motivate and support each other. Similarly, find a financial accountability partner—someone who motivates you to stay committed to your goals, providing regular check-ins and offering advice as needed. Think about being that person to someone else.
 
#6 Gamify Savings
Gamification taps into the pleasure center of the brain and is incredibly motivating, allowing you to have fun, play to your competitive spirit, and easily save money. How it works: Commit personally to a savings challenge or enlist friends and family members to join one with you. It could be a no-spend weekend, during which you commit to not spending anything for an entire weekend. (Think of all the ways you can have fun without spending money). If you enjoy cooking, try a pantry challenge to use up ingredients you already have. Into crafting? Make something you need instead of buying it. There’s the 52-Week Money Saving Challenge where you start with $1 on day one. Every week after, add another $1 to the amount you deposit for a yearly savings total of $1,378. Similarly, you have the 100 Envelope Challenge that encourages you to set aside a specific amount of money in envelopes for 100 days.
 
#7 Pay your Future Self
If you view saving money as paying your future self, you’ll shift your focus from what you’re giving up to all that you are gaining. A healthy savings provides many intangibles such as security, freedom, opportunity, choices, and mental peace. Your future self thanks you.

Ever feel money problems are taking over your life, like a weed you can’t get rid of? Or that you want to gain control of your finances, but don’t know where to start? Money can be hard, but there’s a tool that makes it easy: Your budget. If you’ve never created a budget before, now is the time. And here’s why.

What is a budget?

A budget is a plan for your money. It details the income you bring in and how you spend that money. When you create a budget, you are essentially deciding where you want your money to go. It’s you taking charge of your money rather than your money taking charge of you.

How to make a budget?

Step 1: Write out your fixed expenses and their amounts. These are things you pay every month like rent, utilities, insurance, phone plan, loan payments, etc. Now track your variable expenses in a month. These are things you spend your remaining money on, like food, gas, clothes, and entertainment.

Step 2: Track your income. This includes your total monthly income after taxes. Include all reliable sources like salary, side hustle earnings, child support, etc.) If you don’t get paid everything month, estimate the amount based on your yearly income from last year divided by 12.

Step 3: Subtract your monthly bills and expenses from how much money you make in a month. This number should be more than zero. If the number is less than zero, you’re spending more money than you make. Look for things in your budget you can change.

For a visual demonstration on how to make a budget, watch this video from The Federal Trade Commission:

https://consumer.gov/your-money/making-budget#:~:text=What%20is%20a%20budget?,how%20you%20spend%20your%20money

 

Choose A Budget Rule

There are different ways people set up their budget to ensure they don’t overspend and that they are saving enough. A popular method is the 50/30/20 Rule. With this method, you designate:

  • 50% of your income to needs (housing, utilities, groceries)
  • 30% for wants (dining, entertainment, subscriptions)
  • 20% for savings/debt (emergency fund, retirement, paying off credit cards)

Choose a Budget Tool

Use a spreadsheet, a budgeting app, template, or simple paper and pen to track your expenses throughout the month, as well as your income, ensuring you stay within the budget parameters you choose.

Review monthly

At the end of the month, see what worked and what didn’t. Regularly tweak your budget so that it fits your needs, goals and spending habits.

Tips for Success

  • Set up alerts for overspending.
  • Set up auto payments for fixed expenses.
  • Use bank apps to see spending patterns.
  • Avoid juggling multiple budget tools. Pick one, like a spreadsheet and update it regularly.
  • Don’t stress about past months. Budget based on this month’s income and bills.
  • Adjust your budget to accommodate changes to expenses or income.
  • Look for ways to cut expenses (like gym memberships you don’t use)
  • Shift your mindset from the scarcity mentality of “I can’t afford this” to the abundance mentality of “How can I make this work?”

If used correctly, credit cards can be a valuable tool, helping you improve your credit, earn rewards on purchases, and provide some financial flexibility. There are many different types of credit cards, all with different benefits. It’s important to figure out what you want to achieve with your credit card and then find a card that helps make it happen.

Here’s a breakdown of some of the biggest benefits credit cards provide:

Credit Building

Credit builder cards help you improve or re-establish your credit history. If you’re just starting out on your credit journey or if you’ve had credit issue in the past and are trying to rebuild your credit, this is a great option. Be sure to make small charges and pay them of weekly to show consistent use without high balances. Since payment history is 35% of your credit score, don’t be late with your payment.

Travel Points

If you travel, you may want a card that rewards you with points or miles for every dollar you spend, which you can redeem for travel-related expense like flights, hotels, or car rentals. Many of these cards provide sign-up bonuses, so if you spend say $4,000 in three months, you can earn a large intro bonus such as 60,000 points.

Some perks that may be included: free checked bags, no foreign transaction fee if you make purchases when traveling abroad, travel protections like trip cancellation insurance or lost luggage coverage.

Be careful of cards that charge high annual fees for perks that you might not use, such as lounge access. Be sure the benefits exceed the cost when the annual fee is taken into account. Also, rewards cards may have high APRs so take that into consideration as well if you don’t intend to pay the card off every month.

Cashback

These cards give you cashback or statement credits (up to a certain purchase amount) each month. It could be a flat rate of 1.5% back on all purchases or category-based, such as 5% back at gas stations.

Similar to travel rewards cards, cashback cards may carry a high APR, which can negate the rewards if you carry a balance. Always aim to pay the card off in full each month. Also remember, cashback may cap at a certain purchase amount.

Promotional Low Interest or No Interest

These can provide some financial relief if you want to spread out the payments of a big expense during the 0% APR period. Another benefit is to transfer other high interest debt to the promotional card, allowing you to pay down the principal faster.

Be careful with these cards as some might charge a balance transfer fee. Also some of these card promotions have deferred interest meaning if you don’t pay off the full balance by the end of the promo period, you’re charged interest retroactively on the entire original amount.

Comparison sites

To find the best card promotions, you can research online. Some sites that offer comparisons or promote current specials include bankrate.com, nerdwallet.com, and thepointsguy.com.

No matter which card you choose, most credit cards have benefits such as:

  • You can make instant purchases without carrying cash, online or in the store.
  • Responsible use builds your credit.
  • You can dispute charges for faulty goods, services not rendered, or billing errors.
  • Most cards offer a 21- to 30-day grace period after the billing cycle, letting you use credit interest free if you pay the full balance by the due date.
  • Card apps often let you track spending, set alerts, pay bills, even turn the card on or off if it’s lost or stolen.

While there’s more to life than money, you can enrich your life and the lives of your loved ones when you earn better returns on the income you make. After all, the idea behind investing is to make your money work so hard for you, that eventually you don’t have to work anymore. (Your money does all the work!)

When you invest wisely, you typically can build wealth faster than with traditional savings accounts especially if you reinvest your earnings (such as interest and dividends) and if you start early (as in today!). In addition, invested funds will likely outpace inflation, especially if you diversify your portfolio.

If you’re wondering where to start—or how to start—let these smart investing strategies lead the way

Start now.

The sooner you start investing, the more exponentially your investments will grow. That’s due to the power of compounding (aka the snowball effect), which is essentially your earnings generating earnings, leading to accelerating growth over time.

Here’s an example:

Let’s say you invest $1,000 at a 5% annual compound interest rate.

Year 1: You earn $50 in interest, bringing your total to $1,050.

Year 2: You earn interest on the new total of $1,050, resulting in $52.50 in interest for that year, making your new total $1,102.50.

This cycle continues, with each year's interest being added to the principal and generating further interest.

Open an individual retirement account (IRA) or enroll in your company’s retirement plan—or do both—and watch the magic happen. Don’t delay!

Be consistent.

Rather than invest a lump sum of money into the market at one time, spread out when you buy. This is a popular investing strategy called dollar-cost averaging, where you put smaller, fixed amounts in regularly, such as monthly or bi-weekly.

If you have a 401(k), you’re already dollar-cost averaging with every paycheck. But you can also use the practice in a typical brokerage account, individual retirement account (IRA) or any other type of investing account. Over time, you’ll be buying at both market lows and highs, averaging your purchase prices.

Diversify.

Think variety here. Rather than having all your eggs in one basket, aim to spread your money across a variety of investments and asset classes. A diversified portfolio may contain 20 to 30 (or more) different stocks across many industries. It may also contain other assets, too, including bonds, funds, real estate, CDs and savings accounts.

Here’s a breakdown of each type of asset, from Bankrate. It’s important to choose your investments based on your goals, investment horizon, and your tolerance for risk.

  • Stocks offer the potential for the highest return over time, but can fluctuate wildly over shorter periods.
  • Bonds can offer steadier returns with a fixed payout, but can vary as interest rates rise and fall.
  • Mutual funds and exchange-traded funds tend to be diversified because they usually hold many investments, but a specific fund may hold only one kind, for example, consumer goods companies. So, a fund could be broadly diversified or narrowly, depending on how it’s managed.
  • Real estate can appreciate slowly over time and offer the potential for income, too. But physical real estate can be expensive to maintain, and commissions are high.
  • CDs and savings accounts will not fluctuate in value but will grow steadily based on the interest rate or other contractual terms.

Define your goals/track your progress.

Define what you are saving for, how much you want to save, and your time horizon. For example:

  • I want to have $5,000 saved for a down payment on a home in 3 years.
  • I want to have $50,000 saved toward a child’s college education in 18 years.
  • I want to have $1 million set aside for retirement in 20 years.

Whatever your goals, be sure you set specific and measurable targets. Track your progress the same way—with clear metrics. For instance, a progress metric may be to grow your investment portfolio by 10% annually, which is easily measurable. Regularly revisit your savings goals and make adjustments as your needs, goals, and financial circumstances change.

We all know that investing for the future is important, but many of us avoid it because we don’t know the best way to go about doing it. You may find that once you get started and follow these tips for smart investing, everything will fall into place.