Spending
Debit Cards
What is a debit card? It is basically electronic cash you’ve deposited into your account. Debit cards deduct money directly from your checking account. They offer the convenience of a credit card (not having to carry a ton of cash), but instead of borrowed money you are accessing your own funds. Debit cards don’t usually offer rewards programs. You can generally receive a debit card when setting up a personal checking account.
Credit Cards
Credit cards are free money, right? NO! Credit cards allow you to borrow money from the card issuer up to a certain limit. You are making purchases on credit, with the promise you’ll pay it back – and if you don’t, there are penalties. Credit cards can be great when used correctly. Never charge more than you can afford to pay off when the bill comes. Check out a few of the Visa Credit Cards offered here at ICCU.
Tracking
Do you ever look at your bank account and wonder where your money went? Like, you’re not spending THAT much on eating out, right? Tracking your spending habits helps you discover how much money you are actually spending – which can be wildly different than the amount you think you’re spending.
Track your spending for about a month before creating a budget so your goals stay realistic. Even after you’ve started budgeting, keep tracking your spending habits to see how they align with your new budget. If you take the time to mark down every transaction (in a notebook or app), you’ll think harder about the impact of each purchase. This can be daunting, so it is important to set attainable goals for your money to keep you accountable to your budget and tracking.
Budgets
While at times it may seem tedious and boring, creating a solid plan for your spending will ensure that you have enough money for your needs. This will give you complete control over your finances while creating excellent new spending habits. Once these skills are polished a new avenue will open for you to achieve your personal financial goals, purchasing those things which are important to you. Now is the perfect time to start practicing. Check out our 5 awesome tips below to find out where to begin.
Tips for Budgeting
1. Find out how much money you’re making
To create a budget, you have to know how much money you’re bringing in each month (you knew that already though, didn’t you). Calculate your monthly income by adding up regular sources of income. If you do get a paycheck, only add up the net pay (amount received after taxes).
2. Track your spending
Tracking your spending habits helps you discover how much money you are actually spending – which can be wildly different than the amount you think you’re spending. If you take the time to mark down every transaction (in a notebook or app), you’ll think harder about each purchase. This will help you visualize your spending and determine where you can make cuts.
3. Set financial goals
Make sure this is an attainable goal. You shouldn’t come out the gate saying you’re going to save $1,000,000. You will definitely get discouraged. Make your goal to save for an emergency fund, or a vacation, or a new car. Working towards a goal makes saving feel more rewarding.
4. Decrease your spending
After you’ve been tracking your spending, you can determine wants versus needs. You have to spend on needs (fixed expenses), those should come first (duh). Figure out what wants you can live without for now and cut them out. You can always save up for certain wants later.
5. Stick to your plan
STICK TO YOUR BUDGET. Following your plan will help you reach your end goal. The internet has a plethora of ideas for beginner budgeters. Look them up and go with the one that feels the best for you.
Credit
Let’s be real. Building credit is lame, especially when you are starting out. It can’t be as simple as just making money and only using that to spend on things. You HAVE to have credit to succeed as an adult. Once you start building credit, it is a bit like a financial “report card.” If you keep an eye on it, pay your bills and play by the rules, you’ll have great credit and lenders will feel more comfortable loaning you money. Landlords, car dealerships, and more will look at your “report card” to determine how much of a risk you are. Credit scores range from 300-850 and you definitely want to try to stay above that 700 mark.
Tips for Building Credit
1. Get a job
Employment status doesn’t directly impact your credit, but having a steady income is pretty important when it comes to the major component in building credit – borrowing money.
2. Borrow money
This can be as simple as opening a credit card and paying it off every month. Idaho Central Credit Union has a full credit builder program available to get you started.
3. Pay and wait
Your credit begins to build as your creditor reports your account history to the major credit bureaus. Stay out of debt by never charging more than you can afford to repay by the time the bill comes. Be patient since you are just starting out and your credit score is being built.
How Does Your Money Grow?
Now that we have your spending habits in check let’s continue the journey to financial success! Get on the right financial path by saving for the future now. ICCU offers savings account options that grow as you grow.
