Checking Accounts, Banks and Budgets

Managing personal finances often becomes a more difficult task during economic slow downs.  Belt tightening now becomes a necessity as uncertainty over future income streams and the future value of assets become questionable.  There are effective ways to capitalize on this need for increased thrift and asset management.

One key tool at the consumer disposal is the ubiquitous bank checking account.  Use the bank checking account to your advantage.  First select the bank and the bank account that charges the least amount of fees for the services you need.  Manage the checking account in coordination with your other bank accounts.  A non interest bearing checking with a sizeable balance in it is free money for the bank and a lost opportunity for the account holder.  When it is time to be thrifty, it is time to maximize the costs and rewards of all activities and investments.  Large cash positions should not be held in checking accounts choose the higher yielding CD account or money market account instead.  Avoiding checking accounts that charge high fees is an obvious money saver, but consumers should also monitor their checking account use to make sure they use a checking that offers the most value for the services they use.  By practicing good checking account administration you can cut down on unnecessary fees and allocate more funds to higher yielding accounts.

A checking is a simple and easy tool that most of us already use that inherently keeps track of bills, when things are due, and how much money we consume.  Maintaining an organized checking account is not difficult and it often holds the data to increased saving.  Economizing with a budget is as simple as managing your bank accounts to watch for the unnecessary expenses.  Review the ancillary expenses and cash consumption that can easily be handled, consumption on items such as fast food restaurant expenses and frivolous purchases.  Fast food is frequently an unhealthy expense for the wallet and the waist line.  A typical dinner at a fast food restaurant can cost $27.00 to $35.00 for an average family.  If a consumer had $1,000.00 in a bank CD and cut out two fast food purchase per month they could add $840.00 to that account annually.  $840.00 added per year at 5.00% interest will accumulate to over $31,000.00 at the end of 20 years.  And that is by just cutting out fast food.  Think of the savings if more consumers cut out the junk food and sweets from the grocery store as well. 

Use the checking account to monitor and schedule the large expenses that have little room for change.  The checking account can help someone stay organized and keep track of their bills. The better organized a consumer is the easier it will be to make sure the bills are paid on time as well.  No one needs a refresher course on the importance of good credit in this period of credit constriction or the lesson on the increased costs of late payments on credit cards and ca loans.

Use the checking account as the first line of defense for increased savings.  For most consumers it holds all the data they need to maximize their savings.

This entry was posted on Sunday, November 16th, 2008 at 11:17 am and is filed under Money Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.