Start your banking with good habits rather than try to fix bad banking habits later – I’ll show you how.
I work in a bank. I see a lot of customers everyday, some who make their money work for them; some who are always in financial trouble.
By studying these people and taking note of their banking habits I have worked out ways to stop it ever happening to me.
Not only that but because I care about the people I serve I now spend a lot longer with the young ones who come in to open their first bank account. Why? Because this is where all the bad habits start.
By just doing a couple of things differently a young person can maintain good banking habits and not have to endure the financial troubles a lot of us started with.
On this page you will find straight forward tips on how to open the correct accounts the first time. This is important whether you are a young person starting your first part-time job, a parent taking your teenager into the bank to open their first account or even if you have such bad banking habits now you need to start from scratch.
I’ll show you how to do it the right way the first time.
Always Start With Two Accounts
Because one is the lonliest number….
Everyone should have two accounts. One to use, the other to save. I get a lot of parents who come in with their kids who have just gotten their first part-time job.
They need a bank account of their own so their employer can pay them their wages. I start explaining why it is so important to have two bank accounts. Half the time the parents interrupt and say “No thanks, he/she just needs one account to start with, then we’ll see if they can handle two”. The smart ones just nod and smile. Why is this?
This is because people have a slightly biased view of bank workers these days. And I must admit generally I tend to agree – but more on that later. They see me as someone trying to ‘flog’ their kid more products then they require just so I can get a bigger pay packet. Well, in this instance they are wrong.
I can honestly say I am the first to look at customer’s bank accounts and if I see dozens of tiny accounts doing nothing will do my best to convince them to close them. You never need accounts that do nothing.
We all need at least two bank accounts, end of story. We need a transaction account (to be used) and a savings account (to put money away in). So let’s look at them.
A Dollar A Day – in your pocket, no one elses
No matter what your first job is, how much you are going to earn do this. Put one dollar a day into a savings account. Label it ‘Future’ and leave it alone. Don’t literaly put a dollar in a day though, you’ll either forget or put it off. Simply put money into it as soon asyou get paid. So if you get paid weekly, put seven dollars in. If you get paid fortnightly put in fourteen dollars. Simple.
When choosing your savings account pick on that’s:
* High in interest
* Is easy to access in an emergency
Preferrably shop around all your banks to find which one has the best savings account and open the transaction account at the same place. By sticking with one bank it makes banking a tonne easier. Giv them a year and if you are unsatisfied with anything leave and repeat this process elsewhere. You don’t have to be loyal to a bank – they are a business. Put your money where you are treated well.
Basic Tips to Save Your Moola
They sound too easy right?
The biggest thing people seem to do nowadays is spend their money and overdraw their account. A lot. Here is some basic advice that if you stick to it from day one will never have to worry.
$100 is $0 – When you open your account, start with $100. Save it in a piggy bank til you get it. Then whenever you check your balance treat the first $100 as $0. If you overdraw your account, your bank will charge you a fee. If you overdraw into your $100 (and make sure you replace it straight away) you will never overdraw your account.
BUDGET! – Ask your boss how much you will earn, deduct taxes and the money you are going to put into your savings account. This is what you are going to live on.
Then work out your direct debits and what day they will come out – always have them in a week early. So after pay you should have $100 + your direct debit amount in your account. What is left over is what you can spend. Never compromise or say you’ll fix it later.
Check your balance at least every two days to ensure you are staying on track. You don’t want a nasty surprise of no money with still a week left to pay day.
The savings account you set up was for ‘Future’ – I will go into that a bit more in the next page on banking level two. If you want to save for something in particular, like a car or holiday open a new account. Just remember to budget in that you will be putting at least a dollar a day into each. DO NOT STOP PAYING INTO YOUR FUTURE ACCOUNT.