You want to be on top of your finances. You want to be the one who manages money responsibly and has a positive outlook when it comes to your budget and future. That's why you understand the importance of knowing what banking mistakes are out there and how to best avoid them.
But try hard as you may, banking mistakes are hard to avoid. They happen to everyone. Some are minor and without much penalty while others are costly. Take, for example, a mistake that leaves you susceptible to fraud.
It is always important to protect yourself and your money. That is why you should know who you are dealing with in all of your finances. Do not trust just anybody with your money. Fraud is out there, and it is rampant. Always verifying before submitting or pursuing a financial transaction decreases your chance of falling victim.
By having a firm grasp on how to avoid banking mistakes, you will position yourself to not only save money but also to financially succeed for many years to come.
Not Knowing Your Account Type
Knowing what type of bank account you have is imperative to avoiding financial mistakes. If you're not careful you could sign-up for an account that has fees and charges associated with it should you fail to meet particular requirements. These requirements can include minimum balances, number of deposits, and number of transactions.
Pay close attention to the accounts you open and all of their ins-and-outs. This encompasses credit, checking, savings, and other loan accounts. Keep records of any promotions you sign up for, and make sure you meet all the requirements in order to avoid any interest charges and fees.
Not Understanding Fees and How They are Charged
Not knowing what fees you may be charged is a common mistake many make. These unanticipated fees are often laid out in the original bank agreement you sign, and they can prove costly.
Make sure to know what fees can be charged and why they would be charged. Make sure you can meet minimum balance requirements or any other stipulations. Other restrictions that may lead to unanticipated fees or charges include overdrafting your account, too many transactions, or going over your spending limit.
By understanding what fees are associated with your account and how they are charged helps you avoid any unexpected financial troubles. It also saves you money. If you know how to avoid fees you won't waste money on them. That means having more to set aside or to put towards other, more important life expenses.
Not Applying for Loans with Your Bank First
There are many reasons to take out a loan. Mortgage, student and auto loans are among the most popular. They are often the ones mismanaged. Why, you ask? Because far too many consumers apply with third party institutions rather than their bank. This can be a costly mistake that ends up with you missing out on a lot of savings.
When you indirectly finance a purchase you are making yourself more prone to higher rates, fees, charges, and penalties. To avoid this mistake, simply make sure to talk with your local bank or credit union and compare rates. More often than not, you will discover your financial institution has competitive and better financing options for your needs. This should provide you sound peace of mind that your representatives are there for you and that you will save money in the long run.
Not Visiting Your Branch
Your local financial institution, whether a branch of a big bank or credit union, is there for your financial needs. The representatives who staff the operation are concerned with your finances because your money has a significant impact on the outcome of their business. That is why you should make it a point to visit your local bank or credit union in person.
Establishing a personal relationship with your local banker lets them see you as much more than numbers and provides you with confidence in your banking decisions. By going beyond the numbers and personalizing your banking experience you open the door for more flexible consideration and options when it comes to your finances. Local representatives and bankers who you deal with will get to know you and be able to tailor financial solutions best-suited for your needs.
Avoiding your local branch can prove costly. Not only will you often have to wait a long time for responses to your inquiries but when decisions are made they are generally based solely off the numbers or reports generated by the financial institution. Visiting your local branch gives you a competitive advantage and keeps you in the know when it comes to the latest deals, best rates, and banking solutions.
Not Using the Same Bank for All Types of Accounts
In today's digital age there are many different accounts. From streaming services to online subscriptions, payment portals, social media accounts and more, there is a host of information we must track and pay attention to. This often causes confusion, security risks, and disorientation. Just think of all the login information you have to remember!
This applies to finances as well. If you're in the same boat as many Americans then you have multiple financial accounts that span across a number of organizations. You can simplify things by hosting everything at one institution (or at least using a service to help manage everything in the same place).
From general checking and savings accounts to personal loans, investment services, and more, local banks and credit unions are well-stocked with financial solutions, though the price for convenience could be not getting the highest interest rates available on your accounts. Rather than open a number of credit card accounts with a number of third-party providers, inquire about credit accounts through your bank.