Financial Education & Counseling

Tips for Establishing Good Financial Habits

• What do you spend in a month? Create a monthly budget and track expenditures versus income each month to see if you are on track. Set a budget for meals and fun. Take the amount out at the ATM once per week. When this cash is gone, you have no more to spend that week for “treats.” Try not to withdraw more cash unless it is a true emergency. This will help prevent impulse buys and reduce any ATM fees you may be incurring. If you have cash left over at the end of the week, add it to your emergency fund or long term savings account.
• Be protected while establishing credit. Get a credit card with a limit you can afford to pay off monthly since your debit card does not help establish your credit history. The limit should be no more than roughly 50% of your monthly income. Credit is also a safer option when making online purchases, and you will need a credit card if you ever need to rent a car, make a plane reservation, or rent a hotel room. Look for a card with no annual fee and a reasonable rate of interest.
• Keep it old school. It might be “old school,” but use a check register to accurately track your spending. This is the best way to know exactly where your money is going.
• Another option for establishing credit. Open a small line of credit tied to your checking account and pay it off monthly. This will help your credit score, and prevent fees for overdrafts or insufficient funds. Don’t use the line of credit intentionally; it should only be an emergency backup.
• Set long-term financial goals. Write down your goals and set aside a percentage of your income each month toward them. Vacation? New car? These objectives will be more attainable if you save little by little.
• Get the right terms on a car purchase. When considering an auto loan, try to keep your loan term to no more than 48 months for a used car and 60 months for a new car.
• Save for emergencies. Establish a savings account that doesn’t allow ATM withdrawals. You’ll be less inclined to take the funds out if you have to visit a branch and they will be there when you need them.
• Don’t let student loans get you down. Keep up with student loan payments, as late loan payments hurt your credit score. If you can’t make payments, contact your student loan lender to see if you qualify for any deferral programs.
• Start saving for retirement now. Participate in your employer-sponsored retirement plans or 401k to the greatest extent you can. Start with at least enough to get the full benefit of any employer match.