09/13/2016: Maintaining Good Finances is a Lifelong Endeavor – Get It Started Right
Youth is a time for discovering yourself and maybe even living life a bit recklessly. Everyone makes mistakes, some of which are easily rectified later and others that can have more long-term consequences. Financial missteps can unfortunately be one of the latter mistakes that could potentially follow a young person around for decades.
There are ways to avoid these pitfalls, and all it really takes is a bit of education and the knowledge to understand the benefits and ramifications for certain actions.
It’s Never Too Early to Start Saving
Many companies offer 401(k) plans to their employees. In fact you may even have the option during a high school or college job before you begin your actual career. Most employers will provide some level of matching funds for employees who invest in their 401(k)s, often up to three or six percent. That means if you’re getting paid $24,000 a year and you put three percent, or $720, into your 401(k), your employer will put an extra $720 in for you, free of charge.
There are two ways to think of this. You’ll have slightly less to spend every paycheck – although chances are the amount will be so small as to be virtually imperceptible. The other way – arguably the much smarter way – is to view this as free money you’re just leaving on the table by not taking advantage of matching funds.
Beware of Credit Card Debt
Credit cards can be hugely beneficial to young people who use them responsibly. It’s one of the first ways you can really begin building your credit score without having to take out a large loan on something like a vehicle. But there’s a right way and a wrong way to go about using a credit card, and the habits and perceptions established now could affect your approach to debt in the future.
The best rule of thumb is to not spend money you don’t or won’t have. You should be able to pay off your credit card every month, and if you’re spending more than you take in and are going into each new month with a balance from previous months, you’re likely entering a downward spiral.
College students can easily get into a situation where they have expenses that aren’t covered by or exceed what their student loans afford them. If you can’t cover your payments every month, it’s in your best interests to start looking for a better, more sustainable solution that won’t affect your future ability to obtain a loan.
Choosing the Right Bank Can Make a Big Difference
Saving is never a bad idea, especially if you are planning on making a big purchase or you know you’re going to need extra funds soon – like college students who are about to graduate and begin looking for long-term employment in their career of choice.
Before you choose an institution, first compare their account features and fees with other competing institutions. Does the bank offer free checking accounts? Is the debit card free or is there a monthly charge just to use the debit card? Are there fees for features like bill pay or mobile banking? Is there a minimum monthly balance?
Consider a Community Bank Like Western States Bank
There are a lot of benefits to banking locally. You’ll work with local professionals who understand the unique challenges people in the area face. You’re also putting money into the local economy by helping employ area workers who also spend their money locally. Community banks are also invested in the community, providing local businesses with loans to expand and employ more area workers and community members with personal loans to buy houses and cars.
If you’re looking for a checking account in Northeastern Colorado, Western Nebraska or Southeastern Wyoming, consider the great features of a Western States Bank checking account.
- You can open an account with as little as $50
- Debit cards are free on all accounts/
- Internet and mobile banking, as well as mobile capture, is all free
- Bill pay is included free of charge
- E-statements, as well as check images, are all free
- Complimentary identity theft resolution services are included
- Inclusion in the MoneyPass® ATM network makes it easy to find a participating ATM wherever you are
- Overdraft protection is available for those with approved credit
If you’re looking for a checking account or any other banking services, contact the local financial professionals at Western States Bank today!