Banking is about living your life by using your money to support your needs and goals.
Whether you bank with Extraco or another financial institution, understanding banking basics will help you make good financial choices and do more with your money. A checking account should allow you to manage your money efficiently while growing your money faster. Ask the right questions:
What are the monthly account fees and how can I have them waived?
How much interest will my money earn?
How many transactions am I allowed each month?
What other fees might I need to pay?
Is there a minimum balance that I must maintain?
What special advantages can I expect?
Creating a Budget
A budget will help you understand your spending patterns and gain better control over your money.
Creating one helps you to understand where you spend your money and discover areas where you can save money. It also allows you to prepare for life’s challenges such as loss of employment or illness, or save for a big purchase such as a car, vacation or school.
Many people find the idea of creating a budget intimidating, but we’ve created a handy list to get your started:
Identify monthly bills such as cell phone, cable, utilities, insurance, gym membership, etc.
Use your bank statement to list every day banking purchases you make using your debit card or checks
Understand and list your outstanding debt such as a credit card, auto loan, student loan, mortgage and/or rent
Understanding how interest works can help you avoid paying more than you want to for things you buy and it can also help you grow your wealth faster.
When you borrow money by carrying a balance on your credit card or taking out a loan or mortgage, you pay interest. When you deposit money in a checking/savings account, or certificate of deposit you earn interest. Knowing how this adds or takes away from your total wealth is important. Especially if you are locked into a high interest loan or credit card rate.
Determine if you have the right insurance
Assessing your insurance once a year is critical to reaching your financial goals. Having appropriate protection to protect you and your belongings can help you plan for your future. If you are unable to work due to an injury or illness, you may need disability insurance. If you have dependents, you may want to consider life insurance.
The assets you own and the debts or liabilities you have determine your net worth. Calculate your net worth annually by adding the value of your assets and subtracting your liabilities to help keep tabs on your overall financial future. Note: If you’re just out of college and have a lot of student loan debt to repay, you may have a negative net worth. This is not necessarily a bad thing. It just means you have some work to do.
Having short term and long term goals are important and relevant to everyone. Are you on track to meet them? A Short term goal may include paying off a credit card, a car or even a house. Long term goal may include retirement planning or owning a business. Let us help you plan your goals.
Your credit rating and report contains information about the status of your credit accounts and your bill-paying history. A good credit score is critical to qualifying for loans at the best possible rates. The Consumer Financial Protection Bureau (CFPB) recommends checking your report at least once a year to make sure it is up to date and correct. There are three major credit reporting agencies: Experian, Equifax, and TransUnion. You can ask for a free credit report from each of them every 12 months.
When you take out an insurance policy or start a retirement account, you’ll be asked to name a beneficiary. This is the person who would collect from the account in the event of your death. Consumers should review elections yearly to ensure they’re still appropriate.
Managing your taxes
It’s important to make sure you have enough set aside to pay your tax bill before April 15. The amount of federal income tax you owe each year depends in part on your tax bracket.
It is likely that your retirement plans or taxable brokerage accounts consist of mutual funds that hold various kinds of investments. Consider checking every January, April, July and October to make sure your selections are appropriate for your age and financial goals.