Becoming an adult isn't an easy process for some of us, especially in the financial department. It takes time to learn what is going to work for you and making mistakes along the way is just part of the journey.
With that in mind, here are five easy tips to help you simplify your finances and get things in order, plus two roadblocks to avoid:
1. Use direct deposit. You'll never have to stand in to line to cash or deposit your paycheck again. Let your credit union automatically put your paycheck in your account so that it'll be in your account waiting for you on payday.
2. Set up automatic withdrawals to your savings account. You don't even have to remember to save money anymore! The credit union can remember for you. It's the easiest way to build up a solid savings without having to remember to pay yourself each month.
3. Keep track of your money. Whether you check your Online Banking account or the check register in the back of your checkbook, you'll need to know what's exactly in your account to avoid overdraft fees. And checking your balance online pretty regularly will allow you know if fraud ever occurs on your account sooner rather than later.
4. Create a payment calendar. We all know that late bills can cause big problems, so create an easy-to-read calendar that reminds you when bills and payments are due. Using Online Bill Pay can help since you can set up bills to be paid automatically each month if you'd like. You can also rearrange dates that certain bills are due each month to allow for a more balanced payment schedule.
5. Make a plan. Be sure to plan for all your expenses and savings goals using a budget. It doesn't have to be fancy, but do make it something you will actually use. A simple spreadsheet works for some, while others choose to use apps or online budgeting tools. Whatever method you use, make sure it's realistic and accounts for your savings goals.
Avoid: Overusing credit. Having access to credit cards can be handy, but make sure not to overuse them. Most people know that credit cards can get us into trouble, but it is very easy to fall into the debt trap. You start carrying a little balance on your credit cards and it builds up. You may then have to dip into savings to pay your credit card bills. Avoid this situation by using credit sparingly and only for identified and planned purchases. Implement a plan to save for major purchases and pay for most, if not all, of them in advance. When you do need to use credit cards, choose cards with a great rate, few fees, rewards, and excellent customer service. Simple is key when you're dealing with finances.
Avoid: Spending too much on a car. Buying a new car often trips us up when we are young. While it may make financial sense to buy a new car, be careful not to buy more car than you need. A flashy and expensive car may be tempting, but keep your long-term goals in mind and choose a car that serves your current needs without sabotaging your savings. Remember, just because you can be approved for a certain loan amount doesn't mean you can actually afford it. Make sure any purchase fits into your overall budget and savings goals.