By Kevin Cullum - 11/17/10 12:03 AM EST
By taking a few easy steps and with the proper mindset, budget management can be way less scary than some think.
First things first: sure, your new job is paying you, but it is very important to pay yourself and get your fiscal house in order, such as paying off debts and setting up a rainy-day fund for emergencies. Mike Hart, from Speck Caudron Investment Group (of Wells-Fargo Advisors) is a firm believer in this.
Hart said it is important to look at the big picture, and decide out what needs to be taken care of first. “Find out what kind of reserve you want to bolster as soon as possible,” he said. He suggested putting aside money after every pay check, no matter how much or little it is, so there is an extra reserve set aside for those tight times.
Bank of America offers similar insight for better preparing for those tough times.
“Build an emergency fund,” Bank of America says on their website. “While you often can’t control your job security, you can control how well you are prepared if you are hit with a layoff.” No matter how much it is, emergency money is important to have. Bank of America suggests setting up a system that automatically transfers a portion of your checking account to a separate emergency savings account.
Another easy step is becoming mindful about the small, extra fees you’re paying. For example, how much is your bank charging you for miscellaneous things, such as using an ATM? The vast majority of banks do not cover ATM fees when a person uses a different bank’s ATM. Although these fees are generally in the range of two to four dollars, they can and will add up.
Burke & Herbert Bank, which first opened in the 1850s in Virginia’s Old Town Alexandria, for example, covers ATM fees across the country.
“We feel it is important to make banking convenient and affordable for our customers,” said Toni Andrews, vice president of public relations and corporate communications at Burke & Herbert. “Why should a customer pay two dollars, three dollars or more to access their money at their bank’s ATM?” So be prudent about when and where you use your ATM card.
Bank of America also says you can save your money by avoiding late payments. “Reduce the fees you pay,” they say on their website. “A way to help make more money is to eliminate late fees (and higher interest rates) that are charged when you miss a payment due date.” Bank of America says paying bills online can reduce these fees and help to better manage your money.
Budgeting can be intimidating and sometimes overwhelming, but by taking a few simple steps you’ll be on track to a healthy fiscal future in no time.