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Getting a Grip on Personal Finances: Paychecks & Bank Accounts

Personal finances: paychecks and bank accounts

Growing up and moving out on your own can be daunting and scary. There are so many things to think about and take care of as an adult– from finding a job to caring for your home or living space. One of the most overwhelming parts of getting older is undoubtedly learning how to be in control of your own finances. But there’s nothing to be afraid of! Once you’re armed with just a few important pieces of information, you’ll be ready to earn a paycheck and manage your money effectively in no time. Read the tips below to help you get started.  

Open a Checking Account

When you start earning money and bringing in a weekly paycheck, you’ll want to have somewhere to put it. Therefore you should open a checking account at a bank – where you can keep your money safe and also withdraw it when you need. Opening a checking account is simple. All you need to do is walk into a bank with photo ID and tell a bank teller that you want to open an account. While opening the account is simple, choosing what kind of account to open and where can be more difficult. You’ll want to keep a number of things in mind when choosing a bank and type of checking account. First, look for a checking account that’s free. Though there are usually some strings attached, a free account allows you to keep your money at a bank without paying a hefty monthly fee. In addition, since you are just starting out as an earner and learning to manage your money, you should look for a bank account that requires no minimum balance. Accounts that require minimum balances fine account holders that let their balances dip below a certain amount. You should also try to get an account that has a check or debit card attached to it. A debit card offers you the same convenience of a credit card, but when you swipe your card, the money is deducted directly from your account. Lastly, choose a bank that has a lot of branches and ATMs in your area. Withdrawing money from your bank’s ATM is free of charge; if you withdraw money at an ATM of a bank that’s not your own, both your bank and that bank will most likely charge you a fee for the service. Thus, you will save money if you can find a bank that’s in your area. Having a bank branch nearby can also be convenient if you ever have trouble with your account and need the assistance of a bank employee, or if you need to get something like a cashier’s check directly from your bank.  

Create a Budget

As you start out earning money, it’s important that you create a budget to make sure that you don’t overspend – and also that you’ll be able to put aside money to use for later. To create a budget, take into account all your living expenses – rent, food, medical care, transportation, tuition, etc. and also extra money to have fun with. Stick as closely to these amounts as possible in order to make sure that you’re not living beyond your means. This will help you avoid any debt in the future and make sure that you build a good financial reputation for yourself.  

Open a Savings Account

If you follow your budget properly and are able to set aside a little bit of money from every paycheck to keep for later, you’ll be able to start building your savings, and ane of the smartest financial decisions a young person can make starting out is opening a savings account from the get-go. You can deposit your savings into a savings account, and keep all of your money safe in case of a financial emergency or if you want to make a bigger purchase when you’re older – like a house or a car. There are lots of different kinds of savings accounts to choose from – don’t necessarily pick one at the bank where you opened your checking account. Savings accounts often accrue interest (meaning they make money while your money just sits in them), so check around to see which has the highest interest rates. Get advice from adults in your life or financial advisors, they can direct you to a smart and productive savings account choice.  

Use Helpful Money Management Tools

 There are lots of helpful websites and tools online to help make managing your money easier. One smart way to make sure that your checks are deposited quickly and on-time is by signing up for direct deposit. A direct deposit program will allow your employer to put your paycheck directly into your bank account, speeding up the time it takes to give you access to your own money. One of the best online money management tools is Mint.com, which allows you to link to all your bank accounts, debit and credit cards to one place; it also allows you to keep track of your budget online. Mint.com tracks all your spending for you electronically, and it will let you know if you are overspending or are on track to meet all of your financial goals.