Tips on Small Business Banking in Maine

This is the time of year that many small businesses are realizing that they need to reorganize their finances. Specifically if they have not already separated their business funds from their personal funds!

With my banking background, I often feel the need to educate on such topics as accounts and services… this post covers No Fee Small Business Checking accounts.

Every business, no matter the size, should have a specially designated checking account to segregate funds and pay expenses. However, the needs of a business can vary greatly based on the size of the company and the volume of transactions.

For many businesses in Maine, a Small Business checking account at a local bank or credit union will satisfy all of their needs with NO FEES.

In order to find an account that will satisfy your needs, you need to start by asking some basic questions.

Here are some basic questions to ask when shopping for a Small Business Checking account;

  1. Is there a monthly service fee for having this account?
  2. Is there an average balance requirement for this account?
  3. Are there any per transaction or item fees?
  4. Is there a charge for a Debit card?
  5. Is there a charge for Online Banking?
  6. Is there a charge for Online Bill Payer?
  7. Is there a limit to the number of checks that can be written?
  8. How much do checks cost?
  9. Does the account earn any interest?
  10. What is the minimum balance allowed on this account?

In Maine, you should have no problem finding a Small Business Checking account that offers the following;

  1. No monthly service charge
  2. No monthly balance requirement
  3. 75 – 500 free transactions or items per month, then each transaction or item could cost anywhere from $0.10 – $0.50
  4. No charge for a Debit Card
  5. No charge for Online Banking
  6. There may be a small charge for Online Bill Payer with a business account
  7. No limit on Check writing
  8. Checks could cost anywhere from $15 – $150 depending on what you order, however some banks will give you the first order free
  9. Most free accounts do not earn interest
  10. The minimum balance could be anywhere from $1 – $500

Now there is no excuse to comingle your business and personal funds. Contact your local bank or credit union and investigate your options!

With over 10 years of community banking experience in Maine, I would be happy to answer any questions that you may have about business banking, accounts, and services. Feel free to contact me!

The “B” word…

The “B” word…

BUDGET!

In this computer age, most of us hardly balance our checkbooks when the monthly statement comes in the mail. In fact, many of us don’t even receive a statement in the mail. But that doesn’t mean that we shouldn’t still be aware of our spending, our limits, and our BUDGET!

At least half the people reading this are cringing at the word budget, and may even stop reading this article. It’s a shame really; it’s a shame that such a helpful tool has become such a ‘bad word’.

A budget is not meant to be a financial straight jacket or a cloud of guilt that hangs over your head every time you consider a purchase. A budget is meant to be a guide. A budget is meant to help you achieve goals, whatever those goals may be, and simplify your life. A budget is simply looking at what you spend, and putting aside enough of your income to cover it. And it doesn’t have to be complicated either, below is an example of a very simple budget.

We all have some fixed expenses that you have to consider; housing, utilities, insurance, etc… but after that your budget is all yours to have fun with. It’s never cast in stone and is meant to be a moving target that changes with you and helps you achieve your plans. Most budgets work best with some sort of spreadsheet software or accounting software, this allows for easy adjustments and updating.

The most difficult part of a budget is when you realize that you spend (or need to spend) more money than you make. This means you are going without, overdrawing your account(s), and/or using credit. Some of the simplest ways to correct this are to either increase your income or decrease your expenses. Easier said than done, for some people. For those that are having difficulty with this, a budget and possibly some financial or credit counseling are the best courses of action to take. Both of which can be obtained for little or no cost.

A few quick rules for budgeting;

  1. 40% housing ratio – If possible, your housing expense should not exceed 40% of your income. The less the better!
  2. Revisit often – You should recheck your budget often, monthly if possible, especially in the first year.
  3. Team work – If you have a significant other, you should both be aware of the budget and have input, but one of you should be the ‘finance manager’.
  4. Ask for help – If you are struggling, swallow your pride and get help! Financial counselors have some great information and tools available to help make things easier.

Here is a very simple budget that should at least get you thinking about your own income and expenses, if you haven’t already;

 

Monthly Income

Your Primary Pay $

Spouse’s Pay $

Second job $

Bonuses, Commissions, Tips $

Other Income $

Total Income $

 

Monthly Expenses

Rent or Mortgage payment $

Car Payment $

Household Utilities (Phone, electric, cable, etc.) $

Auto Expenses (gas, tolls, maintenance, etc.) $

Credit Card Payments $

Insurance (home, auto, life, health, etc.) $

Child Care $

Food $

Clothing $

Health (medical, dental, eye, etc./not covered by insurance) $

Entertainment (movies, vacation, videos, etc.) $

Gifts (charities, church, holidays, birthdays, etc.) $

Other Expenses $

Total Expenses $

 

Do you have questions or comments? Can you think of ways that you could utilize a Budget more effectively?

I hope this was helpful and look forward to hearing from you!