By Marc Prasch
No matter your age, the start of a new school year is a great time to evaluate your habits and make some positive changes.
Money management skills most likely were not taught when you were in school. In fact, Kentucky just recently started requiring a financial education course for high school graduation.
The good news is that there are a lot of free tools and resources available to help you improve your overall financial wellbeing and take simple steps to manage your money more effectively.
Step 1 – Assess AND Educate: Starting with a simple assessment can help you take stock of where you are and set financial goals. If you’re just starting out, a savings account is a great first step. By depositing a portion of each paycheck automatically, you’ll build an emergency fund to handle unexpected expenses. Those with more life experience may want to focus their efforts on specific goals such as home buying, retirement planning or improving their credit score.
Technology has made it easier than ever to access free assessment tools and resources on a wide variety of these topics. Ask if your local credit union or bank offers online financial education modules or, if you’d rather talk face-to-face, stop by a branch and ask about the resources available.
Step 2 – Evaluate Your Options: You work hard for your money, but not all savings and checking accounts are created equal. Take a close look at your next monthly statement to make sure you’re avoiding fees whenever possible, including monthly maintenance fees on checking accounts.
Free checking still is an option at some institutions, especially if you set-up direct deposit. Early paydays may even be available to help you access your paycheck up to two days early. This can be a big help, especially if money gets tight toward the end of the month. Check with your institution to see if they offer immediate credit to your account as soon as your payroll file is received from the Federal Reserve.
Step 3 – Borrow Wisely: Loan payments can have a big impact on our monthly budgets. It’s easy to find yourself paying very high-interest rates on very easy-to-get credit. Whether you’re financing a big purchase, such as an auto or home loan, or simply have credit card debt that accumulated over time, it’s always a good time to evaluate or reevaluate your options.
Interest rates and terms can vary widely depending on the lender and today’s interest rates still are at historically low levels. Start with your local bank or credit union to see how your current loan rates compare to what’s available if you refinance. You may be able to lower your monthly payments or get out of debt sooner.
Financial education is the key to healthy and strong communities and I encourage you to make the most of the tools available to help you along your financial journey. Here’s to a fall filled with positive new habits for all of us.
Marc Prasch is chief member experience and operations officer at Abound Credit Union.