Get your financial affairs more professional by setting up the right bank accounts. In this article, we provide tips that will save you time, protect your credit, make sure your bills are paid, and help you save money to secure your future.
Be sure to set up both a checking and a savings account. (In some cases, a money market account can serve as a substitute for a savings accounts.)
Types of Accounts
A checking account is where most of your transactions will take place. This is the hub of your bank account and will handle most of your day-to-day transactions. This is the account where you cash checks, pay your bills and transfer money to savings.
A savings account is a great place for your emergency fund, short-term and long-term savings. Avoid pulling money from your savings account unless you encounter a serious emergency situation, for an investment opportunity, or to purchase an item for which you have budgeted.
Savings accounts pay interest for each day you leave your money on deposit. The interest rates vary based on your account options. With many financial institutions, interest is based on how much money you have in your account. As your balances increase, your institution may give you a higher interest rate.
Watch the Money
This is important. Stay on top of your account balances so you know how much money you have available to spend at any time. Check your bank statement at least monthly and make sure to review all charges. One single mistake – by the bank, by you, or by a third party – might cost you hundreds of dollars. In the case of identity theft, you could lose all the money you have.
Keeping accurate banking records will also help you avoid overdraft fees. When you spend more money than you have, your account becomes overdrawn. Banks charge hefty fees for overdrafts, so maintain enough money to cover your bills.
To manage your account, develop the habit of doing all your banking transactions online versus writing checks. Online banking helps track everything and actually experiences identity theft than using paper checks. When banking online, checks are not lost, and you have an up-to-the-minute report of your balances. Use secure online banking features to write checks, pay bills, and transfer money.
Automate the Bills
Set up automatic online bill pay to make banking a breeze. Schedule your bill payments automatically, for a given amount on the date you set. This step protects your credit, reduces the time you would spend writing checks and ensures your bills are paid on time. Online banking also can help you automate your savings and put money toward future investments. Think of it as a way to force yourself toward your own goals.
There’s no time like the present to manage your bank accounts more professionally. Follow the steps in this lesson now to build a solid foundation for managing your financial transactions.
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