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3 Banking Tips That Can Save You Thousands Over the Rest of Your Life
Banks keep your hard-earned money safe, secure and accessible — and they even pay modest yields on your deposits. Most people won't get rich off their savings accounts, but everyday bank customers can save thousands over the course of their lives by working the system to their advantage and getting the most out of their bank's tools, features and services.
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Here are three key banking tips that will save you thousands over the rest of your life.
In the long run, automatic bill pay has the potential to save you more money than nearly any other banking feature because bills on autopilot are bills that never go unpaid.
According to Chase, a single missed payment can tank your score by more than 100 points and haunt your credit report for up to seven years — and payment history accounts for 35% of your credit score, the largest percentage of any factor. When you need to borrow, a hit like that could limit you to only the most expensive loans with difficult terms — if you're even approved at all. That could cost you thousands on an auto loan and tens or even hundreds of thousands on a mortgage while potentially precluding you from rental leases and employment opportunities.
Nacha, formerly the National Automated Clearinghouse Association, operates the Automated Clearing House (ACH) Network, which is responsible for electronically transferring much of America's financial data and funds.
It suggests taking advantage of direct deposit splits, a valuable tool used by fewer than one in four of the 88% of employees who get paid through electronic transfers. By sending portions of each paycheck to different accounts directly from their company's payroll department, workers can divert a set percentage or dollar amount straight to savings every pay period.
Nacha reports that employees who split their direct deposits save $90 more per month than those who do not. That's $1,080 extra every year.
Writing for Ramsey Solutions, personal finance coach and author Jade Warshaw stated that the average person finds $395 during the first month of budgeting and cuts their long-term spending by 9%. Naturally, she recommends Ramsey's EveryDollar budgeting platform, but your bank's free app might be the most powerful arrow in your financial quiver.
Nearly all major banks and many smaller ones offer valuable budgeting tools that could help you save thousands of extra dollars over the years, including:
Spending trackers
Expense categorization
Cash flow trackers
Real-time updates and alerts
Goal setting and progress tracking
Visualized insights
Spending limit setting controls
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This article originally appeared on 3 Banking Tips That Can Save You Thousands Over the Rest of Your Life
