Good money management ensures every dollar you earn is going to benefit you and your family. Most people try to spend wisely and manage their savings, but there may be simple steps and strategies you can implement today to help your money go further. Managing your bank account is at the heart of this process.
Managing your bank account with smart decision-making and a few simple measures can help you save more money, build better credit, and even give you the flexibility to use your funds the way that’s right for you. Working with the right personal banking company makes a big difference, too. Here are a few simple strategies that can make a significant impact in the long term.
#1: Tackle Your Budget
Before you can create a strong financial future or manage your funds properly, you need to have a budget in place. How is a budget important to banking? One of the biggest downfalls for many consumers is that they overdraft funds from their account or don’t plan for expenses. That leads to fees and problems down the road with overextending credit use, limiting your financial future. However, there are strategies available to you today that can change this.
A budget allows you to know how much money is coming into and out of your account and can help you plan for those transactions. Here are some strategies for creating a budget that works:
- Tally all of the income you have coming in over the course of a month. Recognize that all of your spending should be based on this figure – you should not be spending more than this.
- Document all of your utilities. Make sure to consider changes in your utilities from one season to the next.
- Put aside some funds for entertainment, gifts, and groceries. Be realistic about what you are spending in each area.
- Create categories for every item you spend money on each month. Place a total next to that category for how much you’ll allocate for those needs.
- Work to stay within these goals. It’s hard to do, but with tracking apps and a bit of time, you can get in the habit of using your money wisely.
- Aim to put away at least 10 percent of your income each month in savings. If you cannot do that just yet, work towards it at a pace that’s right for you.
With a budget completed, you can now have more insight into how to manage your banking needs.
#2: Limit the Number of Withdrawals You Make
Some checking accounts charge a fee if you exceed a pre-set number of withdrawals each month. Not all banks do this. However, you could be charged several dollars a month just for taking money out of your account.
Even if there is no fee, there are benefits to limiting the number of withdrawals you make. For example, if you have numerous companies pulling funds from your account each month, you have less control over those funds. Take a look at your bank statement from the last two to three months. Do you see charges on it? How many can you have removed? Look for:
- Subscription services that mail you items each month
- Television or internet packages you’re paying for – are you using them?
- Apps and charges from in-app purchases
- Unfamiliar withdrawals for cash
- Purchases you make online for items that you don’t need
Limit how much money is coming out of your account. Before you agree to any type of recurrent fee, make sure it is for something that will save you money another way.
#3: Set Up Alerts on Your Accounts
Overdrafts often occur because people do not notice what’s happening (coming in or going out) of their accounts. Your bank has the ability to provide you with some warning about the changes happening. There are a few specific types of alerts to use that can significantly improve your overall financial savings:
- Set up an alert to let you know when your balance falls below a specific dollar value. This allows you to react and put funds into it to avoid any type of overdraft fee you could have to pay.
- Make sure you receive an alert when funds are deposited into your account, such as your paycheck. This helps you to know it’s made it there.
- Set alerts to send you a daily balance. It is always important to know how much change has occurred in your account.
Use your account features to help provide more insight into what’s happening with your bank. The more info you have, the better.
#4: Set Up Automatic Savings Deposits
Let’s say you receive a check for $500 every week. If you utilize your account properly, it can automatically move some of those funds into your savings account every week, so you don’t have to remember to do so. You choose how much, when, how frequently, and other details based on your needs.
#5: Use Bill Pay to Cover Costs
Your bank should provide you with the opportunity to set up bill pay. This feature allows you to fund key costs each month with ease. For example, use it to pay all of your utility costs, rent, mortgage payments, and other common purchases. When you do this, you are managing all of your bills in one place.
This provides a few benefits. First, most bill pay services are free to use. They also allow you to monitor the charges and to track your expenses better. You may find that bill pay services are one of the easiest ways for you to keep up-to-date on your bills, too. You are less likely to make late payments (which come with added fees), and you can see how much you are spending each month across the board.
#6: Make Sure You Have Direct Deposit Set Up
Direct deposit is an easy feature your bank allows you to set up with your employer. With a few steps, they can transfer your paycheck into the account for you on payday. By doing so, you cut out any need for a paper check. Most of the time, this means that you do not have to wait as long to get paid either. You will also find it is super easy for you to transfer funds as you need to do so, and you can set up automated savings, as noted previously.
Direct deposit also helps with minimizing lost checks or having to wait until after the weekend to access your funds if you’re paid on a Friday. There’s no cost to you to set up and use this type of deposit either.
#7: Pay Close Attention to Interest Rates
Let’s say you are new to personal banking. Perhaps you have not set up a bank account just yet, and you’re working on finding the best account for you. The main thing to remember here is that interest matters.
When comparing interest rates on accounts for both your checking and savings, be sure to look at the details. First, not all checking accounts offer interest. Some do, but only if you keep enough money deposited into the account to qualify for it. Learn if the checking account offers interest and, if so, how much is paid to you.
Compare more than just the interest rate on your savings account. While a higher interest rate is important, you also need to be careful with fees – you don’t want to pay more in fees than you are making in interest. All you have to do is consider what the financial institution is paying in interest, ask about fees, and then compare accounts available to you.
#8: Think Wisely About Mobile Apps
A mobile app is an excellent tool for accessing your banking information. Staying up-to-date is critical for you to make wise financial decisions. For that reason, you should find out if your financial institution offers one, and if they do, look into setting one up.
Use your mobile app to help and know what services are available to you. For example, are you able to link your savings and checking accounts? If so, you can quickly transfer funds from one to the other if you need to. A mobile app can also allow you to track your statements to know where money is going and what it is being spent on.
Some banks don’t offer banking apps. If yours does not, make sure they allow you to log into the website from your smartphone so you can access all of these benefits. Please note: You should log in on a secure server – it’s critical to protecting yourself and your personal information.
#9: Consider All of the Costs and How to Avoid Them
Let’s take a closer look at some of the most common costs you are likely to pay when using a bank and how to avoid some of them. Remember, this will change significantly from one financial institution to the next.
- ATM Fees: Most banks charge an ATM fee if you take funds out of an ATM that is not associated with your bank since there are fees for transferring funds between banks. However, you should be able to withdraw funds from your own bank without a fee a few times per month. Make sure to check if there are fees and limit how many of these withdrawals you make to minimize expensive costs.
- Check Fees: Many banks make it easy for you to write checks and use your account for electronic transfers. You may not have to pay for checks either. Ask your bank if they provide you with any free checks for opening an account with them.
- Account Fees: Compare bank account styles carefully to determine which ones charge fees. For example, if you keep a minimum balance, many accounts drop any fees for you. That’s an easy way to save money.
- Overdraft Fees: If you take too much out of your account, there is often a fee for overdrafts, though this will differ from one company to the next. The smart decision here is to simply make sure you check your account balances and pay close attention to what’s coming in and going out daily.
#10: Utilize The Services the Bank Offers
There are professionals at the bank that can give you insight, steer you into more affordable banking solutions, and even help you to find a loan that’s right for you. Whether you are thinking about buying a car, refinancing a mortgage loan, or even starting a business, utilize your relationship with your bank to ensure you get the very best outcome possible.
The right personal banking company can help provide you with the insights and the support you need to make wise financial decisions. This is the route to take to ensure that you have the best access to your funds and make sure that every investment you make is a wise one. Take a few minutes to reach out to your lender to find out how.