by Hannah Johnson | May 25, 2023 | Financial Literacy
STARTING A SMALL BUSINESS
The Dos and Don’ts
Thursday, May 25, 2023
Being your own boss has crossed the minds of many, but entrepreneurship isn’t for everyone. Alongside the ability to work around your own schedule, be your own boss, spearhead the process of turning this passion of yours into a steady stream of income, and all the other benefits to working for yourself, it’s not always an easy road to travel. Starting your own business requires a lot of preparation, caution, courage, and patience. You must recognize that the success of your business depends on you, and this may come with small failures along your journey, but it can also become the best decision you ever made.
YNCU is dedicated to supporting small businesses in our communities and we want to see you succeed in making your lifelong dreams a reality. We’ve put together a few dos and don’ts to help guide you towards starting a small business.
THE DO’S
DO have genuine intentions. Businesses require a strong foundation built on a set of values and principles in order to succeed. If you create your small business with the sole purpose of making money and nothing else, the lack of purpose and direction will quickly become apparent to your clients/customers, employees, and vendors. It goes without saying that a profit has to be made but ensure your honest reasons for building this business extend beyond financial gain.
DO your research. Understanding your competitors is important for any startup. Take some time to look into similar businesses in your market. Try to get insights into how they operate, if they failed and why, who their customers are, their marketing practices, what area they’re servicing, etc. The more you know about your competition, the better prepared you are when it comes time to penetrate the market with your million-dollar idea!
DO take risks. Starting a business is a risk in itself, and almost every decision you make in this process will have some kind of risk attached. However, with the research you have gathered about your competitors, industry trends, and your target market, you can make calculated risks. Every successful business has taken risks to get to where they are, so don’t be afraid to do the same.
DO get your finances in order. No matter what, entrepreneurs need a tight financial plan outlining everything from how much you’re investing, what the return on investment might look like, and how exactly you plan to make a profit. Also be comfortable with the fact that you may not be making a profit in the early days. YNCU has experienced advisors that can help ensure your first financial steps are the right ones. Click here to speak to a YNCU business advisor to get started!
DO everything by the book. Proper bookkeeping, paying your taxes, abiding by rules and regulations, understanding policies, contracts, etc. – ensure you’re on top of it all and if you’re ever beginning to fall off, seek help from a professional. Get everything in writing and always remain professional.
DO take time to get to know your clientele. Understanding your target market is essential when starting a new business by establishing a solid customer base that expands over time. Go beyond demographics and market trends. Dig deeper to find out who your customers are, what their needs are, and what their current problems are. What are you offering to meet their needs?
DO make yourself known to platforms who highlight small businesses in your area. Check out your local Chamber of Commerce, connect with groups on social media, and take advantage of networking events happening in your community.
THE DON’Ts
DON’T get a big head. Being kind and humble when you work for yourself is important in building strong, trusting relationships with your customers, suppliers, and staff. These relationships are needed to efficiently run your business, which means having the right attitude can be what makes or breaks your small business.
DON’T take your opinion as fact. Welcome constructive criticism with open arms. Be open to new ideas and advice, especially from those with hands-on experience. That being said, remember what your goals are and what you envision for your small business. Being open-minded doesn’t mean you have to do anything that steers you away from your overall vision.
DON’T underestimate the cost of the startup process. Anything you’re budgeting for, ensure there is extra room. Don’t underestimate your ‘competition’. Understand that brand loyalty exists even with small businesses. Don’t underestimate the amount of time you will be putting into your business to ensure its success.
DON’T ignore the current market. Keep on top of new industry trends, new products, new competition – be aware of everything that’s happening that may affect your business. Staying informed can give you that competitive edge that sets you apart from the rest.
DON’T take it personally. Growing your own business from the bottom up can lead to strong emotional ties to your “baby”. It’s important to remember that every entrepreneur experiences rejection, be it from investors, customers, partners, etc. Learn to keep your emotions (and your pride) separate from your business and don’t beat yourself up over things you can’t control.
Now go ahead and start that business plan! We have additional resources to help you get started or expand an existing small business. To learn about our business banking and service options, click here.
For all your general financial inquiries and how you can plan out your financial goals, come talk with an advisor at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | Dec 23, 2022 | Financial Literacy
HOW TO TAKE CONTROL OF YOUR HOLIDAY SPENDING
Friday, December 23, 2022
For many of us, the holidays quickly become a money-spending spree. Between the family get-togethers and the never-ending holiday activities, we can get a bit carried away (especially financially) and before we know it, we’re overspending and taking on debt. Not the best way to start a new year. Here are some tips on how to keep control of your finances this holiday season so you aren’t starting the new year with a financial disaster on your hands.
Create a Budget
If you haven’t done this already, create a list of all the gifts you NEED to purchase and how much you can afford to spend on each person. Give yourself a bit of wiggle room but make sure to stay within your set budget. Bring your list everywhere you go and check it often to ensure you don’t pass your limit. Don’t forget about all the other expenses that come with the holidays. There’s food, entertainment, holiday decorations, and travel costs to consider, as well.
When you’re making your budget, make sure to cover all these expenses, in addition to your regular monthly expenses. Calculate how much you can afford to spend over the holidays and keep track of your spending to make sure you stay within your limit. By tracking your spending, you can also help yourself financially plan for the next holiday season and set some realistic boundaries for your expenditures. If at the end of the holidays there’s room left in your budget, consider putting it towards your existing savings plan or as a starting point for an emergency fund!
Be strategic with your gift giving
Consider buying the same gift for multiple people on your list, if you think it’s something they would enjoy. This enables you to take advantage of those buy-one-get-one deals, saving you time and money. You could vary gifts by choosing different colours, styles, or features. If you’re crafty, consider making your gifts. Not only does this add a personalized touch, it keeps you away from busy malls where you may be tempted to purchase things you don’t need.
Paying with your credit card is fun, until it’s not
Credit cards can be a useful tool to cover some of your holiday spending, if you’re using it correctly! It’s important to pay attention to your spending so you don’t end up wracking up a ton of high-interest debt. When creating your budget, keep in mind any existing debt you may have. If you plan to use your credit card, how much can you realistically pay off?
A good tip when buying gifts with your credit card is to consider your payment due date. Most Canadian credit cards have an interest-free grace period of about 21 days. If you know when your billing cycle ends, you can spread out your repayments by as much as 6 weeks by buying some items in one billing period and others in the next. But if you don’t think you can pay off your holiday debt before you start accumulating a ton of interest, it’s probably best to keep your credit card at home.
For all your general financial inquiries and how you can plan out your financial goals, come talk with an advisor at your closest YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | Nov 25, 2022 | Financial Literacy
THINGS TO KNOW BEFORE LIVING ON YOUR OWN
Friday, November 25, 2022
Eager to live on your own? Have plans to move out of your parents’ place? At YNCU we know how exciting it is to get your own place and start your own journey. We also know that school does not always prepare you for the financial responsibility that comes with moving out. We are here to help! Here are some financial tips on how to live on your own:
Budget
Budgeting is very important as it ensures you are able to buy your essentials and still have a little money on the side. Figure out how much money you are making monthly and what your monthly expenses are. From there you can allocate portions of your money to different areas and determine how much wiggle room you have each month. YNCU has helpful tools that will make this easy – like our household budget tracker and student budget tracker. Using these tools can ensure you are not running out of money before your next pay day.
Pay your bills on time
As important as it is to budget for your bills, it is equally as important to ensure you are paying these bills on time. By paying your bills on time with your credit card, you will build up good credit and have an easier time securing a loan in the future. Avoiding paying your bills can have negative consequences on your finances and can even lead to debt or late fees. Set yourself up for success by setting a reminder for yourself to pay your bills promptly every month.
Save each month
As you plan out your budget, make sure you are planning to save some money each month. This will help keep you financially stable. You never know when you may need to have a little extra money so plan to set some aside each month. These savings can go toward your retirement, paying off any debt or anything else that may happen. It is also a smart idea to plan for emergencies. Emergencies can happen at any time (take the pandemic for example) and you never know when unexpected costs will arise. YNCU can help you with planning your emergency savings account. Learn more about the Emergency Savings Plan here!
Monitor your financial transactions
Make sure you are keeping an eye on your financial transactions. Certain accounts may have fees for each transaction and you could be acquiring extra fees without realizing it. Be sure to check the details of your card (credit card limit, transaction fees, etc.) and plan accordingly. Monitoring your transactions can also help prevent fraud as you can report any transactions that were not made by you. Keeping a close eye will help keep your finances safe.
Make a plan before grocery shopping
Planning your meals before you go grocery shopping can help you avoid purchasing unnecessary groceries. Food costs are drastically rising so shopping with a purpose will ensure you are only getting the essentials. Try to avoid food waste by using whatever you have in the fridge before you go shopping. Cooking in bulk and freezing the leftovers is also a good way to save money on groceries and save you time on food prep.
Get advice
Try to learn as much about finances as possible. There are many external resources that can help you. Also make sure you ask for advice when you need it. Just because you are moving out on your own does not mean you can not ask for help. Chances are you are not a financial expert, so connect to people who are. At YNCU we have many experts who are happy to help!
For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Hannah Johnson | Nov 14, 2022 | Financial Literacy
THINGS TO KNOW BEFORE ENTERING THE HOUSING MARKET
Monday, November 14, 2022
At YNCU, we know entering the housing market is a daunting task. School does not prepare you for the financial risk you take when purchasing a home for the first time. We want to share with you some tips to help you enter the housing market, responsibly.
Do your homework
Before you do anything that involves a large portion of your finances it is important that you do the proper research. With high prices, rising mortgage rates, and low inventory, following trends in the housing market is extremely important. Learning the language related to real estate can be extremely helpful, including terms like “earnest money” which is the deposit you put down on the property you’d like to buy. The funds of this deposit go toward your down payment. Another need-to-know term is “appraisal contingency” which is a provision in your contract that allows you to back out if the appraisal price comes in lower than the sale price.
Learn about down payments A down payment is the amount of money you put toward purchasing your home. If your down payment is less than 20% of the price of your home, you must purchase mortgage loan insurance. The minimum down payment for a home is typically 5%. If you have poor credit you may be required to pay a larger down payment. It is essential to be aware of what the down payment is for the home you are about to purchase and if you are able to pay for it.
Check your debt and credit
Mortgage lenders will look at your debt and how much income you are making. If you have high debt and relatively low income, it is unlikely that you will receive a loan. This is important information to know before you begin searching for a mortgage loan. Any extra cash you have should be used toward paying off your debt before you can start looking for a house.
Another thing to look at is your credit score. Your credit will be a factor in determining what type of loan you will get. It will have an effect on the interest rates and possibly how much you will need for a down payment. Make sure you are working toward building good credit before you start looking for loans.
Know the extra costs
A lot of people enter the housing market without realizing all the extra costs aside from your mortgage and down payment. There are expenses such as closing costs, lawyers’ fees and changing the locks. There are also extra costs like hiring a home inspector, setting up utilities and buying insurance.
Talk to an expert!
Buying a home can be an overwhelming process, especially if it is your first time. Make sure you talk to your financial advisor to know what your options are and how to best prepare for entering the housing market. It is also important to ensure you have the financial ability to sustain owning a home. YNCU can help you to figure out the best options for your financial situation.
For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!
Don’t forget to follow us on Facebook, Instagram, Twitter or LinkedIn for more honest money talk tips!
by Divora Mehari | Aug 26, 2022 | Financial Literacy
INFLATION AND BACK TO SCHOOL
Friday, August 26, 2022
At YNCU, we know back-to-school can cause a lot of stress during this time of inflation. Rising costs have caused people to have to limit their spending and focus on the essentials. With the upcoming school year fast approaching, parents are concerned about how they are going to pay for these expenses.
A recent Deloitte study says that parents are planning to spend roughly $661 to prepare their families for back-to-school. More than 35% of respondents said they won’t be able to afford back-to-school spending this year. The study also stated that 33% of parents have said their financial situation has worsened over the last year, increasing 11% from 2021.
Schools have been unable to support parents through this difficult time because they themselves are pressed for funding. Some people have needed to work overtime in order to cover the cost of going back to school. Many parents and caregivers are unsure of how they will pay for all the supplies that are needed.
At YNCU we want to help take some of this stress off you by providing tips for the back-to-school shopping season:
Make a plan: Only buy things you need
Oftentimes it is easy to make a new list of school supplies every year and buy everything on that list. Make sure you are taking a look and what you already have from the previous school year. There is no need to buy a brand-new set of pens or rulers if you already have them. Ensuring you are not buying multiples of something that can be reused can help lower the cost of back to school. Teachers will also often provide a school supply list for their classroom, if something isn’t on the list, you don’t need to purchase it.
Set a Budget and Stick with It
Plan a reasonable budget for back to school. Keep your regular expenses in mind when you are creating a budget. Having a budget will ensure you are still meeting your financial goals. Just because your child’s backpack needs to be replaced does not mean you need to spend your entire back-to-school budget on a brand name one. Look for deals or discounts, and switching from your usual brand can be a good way to reduce cost.
It is also important to remember you are not forced to purchase materials for the whole year. It is okay to cut back and buy enough for the first half of the year and allow yourself time to save for the second half. Giving yourself this time will also allow you to stick to your budget and understand what your child is using the most or what they are not using at all. This way you can target your spending during the second half of the school year and reduce cost.
Shop Without Your Kids
We know your kids want to be a part of back-to-school shopping but oftentimes that makes the trip even more expensive. Your kids will beg for things that are not on the list or ask for brand name items. If you shop alone, you are able to ensure that you are only getting the essentials. If your kid really wants brand name items, pick up a couple of items they can wear often like a backpack or shoes. This way your child is able to get what they want but do not have to do a part of the process.
Refurbished Tech Gets the Job Done
Starting early can also help you find the best prices and deals for tech items. Tech is a much-needed item nowadays and people are always on the hunt for the best price. Purchasing refurbished computers or laptops is an option in order to stay within your budget. Laptops and computers can cost upward of $1000 brand new. Refurbished or second-hand technology can make a big difference in the cost of back to school and is also more environmentally friendly. Not everything has to be brand new for the new school year.
Buy in Bulk and Split with Friends
As the cost of almost everything is rising, school supplies are no different. Buying in bulk and splitting the cost with friends can make a huge difference in how much you spend. This can also make shopping more fun as you are able to go with your friends and decide what you both have on your list. Things like pens, pencils, rulers, and notebooks are things that almost all students need. So, if your child has friends from school, get their parents together to save cost on supplies.
Shop With a Cash Back Credit Card
When you are back to school shopping, use a cash back credit card. This way you are able to make money when you make purchases. YNCU has a Collabria no fee MasterCard that can help you with your back-to-school shopping!
For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!
by Divora Mehari | Jul 15, 2022 | Financial Literacy
DEBUNKING CONTROVERSIAL MONEY MYTHS
Monday, July 25, 2022
At YNCU, we know that you take your finances seriously. You want to protect your financial assets as best as you can. There are a lot of widely held ideas about money that are simply not true. We want to help you achieve your financial goals by debunking some of the most controversial money myths. Here are five of the top money myths out there:
1. All Debt is Bad Debt
One of the most common money myths is that all debt is bad debt. This is simply not true. There is both good and bad debt. Good debt is money that has the potential to increase your net worth. Taking out a mortgage could be considered good debt because you are able to make more money off that asset as time goes on. Bad debt involves using money on something that slowly loses its value. Some purchases that depreciate in value, like buying a car to commute to work, can be critical. Bad debt is debt for frivolous items that depreciate in value and don’t help you earn money. Furthermore, these debts can often hold very large interest rates.
It is a common belief that all debt is bad debt, but good debt can actually help you gain more money by borrowing. In order to make more money, you need to use outside resources and rely on other people to help. Good debt has the ability to enhance your life in a positive way.
2. Buying a Home is Better Than Renting
It is a long-held belief that your home is your biggest asset. Renting is considered to be throwing your money away. The truth is renting provides you with flexibility, since it is a lot easier to move when you are renting. The prices of houses have been skyrocketing for the last few years and many people do not even have the funds to consider buying a home. There are a lot of benefits from renting that are often overlooked. With the housing market and taxes, buying a home versus renting might not be the best way to achieve your financial goals in the future.
3. Only Save Big Amounts, Don’t Waste Time with Small Sums
Some people believe it is a waste of time to set aside small amounts into your savings every month. They think you should only set aside money when you are able to put aside large sums of money. This is far from the truth. Saving little by little will make a huge impact in the long run. Savings accounts hold interest and the longer you hold money in the account, the more interest you will accumulate. This means that putting aside small sums can add up to more than what you put away over time.
4. Don’t Need to Look into Retirement When You are Young
When you are first starting your career, you may not be considering retirement savings. You may think that because you are so young, you do not need to look into retirement right away. In reality, starting to save as soon as possible will allow you to not have to worry about retirement. You will achieve your goals earlier when you start earlier. Life is unexpected and you will never know when you want to pull out your retirement savings. Starting a plan now could mean you are able to retire sooner.
5. Avoid Credit Cards
People often avoid using a credit card because they believe it will lead to large amounts of bad debt. This is not necessarily true as, if you pay your credit card regularly, there will be no issues and you will be able to build good credit. Having a good credit score will help you get approval for mortgages or other loans. This score proves you are able to pay back bills. By avoiding a credit card, you are also avoiding building good credit.
There are a lot of money myths and bad financial advice out there. If you are looking for a financial institution that tells you the truth about your money, become a member online!
