Developing a Personal Banking Strategy
If you've become accustomed to having your finances in disarray,
it's likely time to take control of your financial life and get
things in order. This may seem like a tall order of business,
especially if you've had your financial records scattered for
quite some time... but it can actually be a much simpler process
than you might think.
The first step that you need to take in order to make some
headway toward organization is to realize that there is
definitely a better way to take care of your finances and
banking than what you're currently doing.
>From that point, it's simply a matter of creating and enforcing
your own personalized banking strategy in order to get the most
out of your money.
What Is a Personalized Banking Strategy?
If you're not exactly sure what a personalized banking strategy
is, you're not alone. At its most basic, a personalized banking
strategy is simply a method of looking at the way that you deal
with your finances and building your financial planning around
it.
Savings accounts, chequeing accounts, investments... they all
fit into your banking strategy. It's time to take the time to
look at them individually so as to determine how to best get
them to work together for your benefit.
Savings
The purpose of savings is obviously to assist you in saving
money, but many people use savings in much the same way that
they do chequeing. Not only does this cause you to miss out on
some of the benefits of the interest rates that savings accounts
carry, but you can actually lose money in fees if you make too
many withdrawals in a month.
If you don't have a savings account, you might want to consider
getting one... but if you find that you're using the ATM a bit
too much, it's time to hide your ATM card. The money in your
savings account needs to stay there until it's really needed.
Chequeing
The key to successfully managing your chequeing account is to
balance your chequebook monthly and build up a bit of a buffer
to prevent overdrawn cheques. Round up to the next whole number
the amount of each purchase when you record it in your
chequebook.
While this may only be a little bit of change, with each
purchase it will grow; at the end of each month you'll find that
you've got more money in your account than your ledger was
showing.
You can either leave it there to build the buffer more, or
transfer the difference to your savings which you should do
every few months, at the very least.
Long-Term Deposits
Long-term deposits can also figure prominently into your banking
plans, especially if you have problems with maintaining a
savings balance. Instead of placing all of your savings into
your savings account, place some if it into certificates of
deposit or other long-term deposits... the interest rate will be
better than most accounts, and it will help keep you from
spending the money that you're trying to save.
Investment
You shouldn't ignore the usefulness of investments when
determining how best to divide up your money. As a general rule,
it can be best to choose a relatively stable investment that
will be used as a long-term investment... this way there's less
danger of the value suddenly dropping and you won't be as
tempted to simply sell the stock when you need quick cash.
Investing a little each month (perhaps on an investment plan)
can help you to keep your investments growing, as well.
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