Managing your back accounts is an important task that many people push aside. Going over your financial records in order to budget can be a stressful task, but it's important for you to see the big picture when it comes to your money. Budgeting lets you save up for major purchases like a vehicle or a home.
Make the most of your bank accounts
Are you new to banking? People who are just starting out will need to determine which type of account suits their needs. There are three types of bank accounts:
- Transaction accounts
- Saver accounts
- Joint accounts
Transaction accounts are ideal for everyday use, withdrawals and bill paying. Saver accounts are used to store money over time ideally with minimal to no withdrawals so the maximum amount of interest can be accrued. You'll need both of these bank accounts to maintain positive financial health, but it's important to use each for its intended purpose.
Joint accounts are usually reserved for couples, but you may consider opening a joint account with a family member. It's important to understand that both owners of a joint account have the right to deposit and withdraw money, so agreements will need to be decided upon when deciding upon the limits of activity.
Bank account features
There are features of bank accounts that you should become familiar with in order to make the most of your money. Direct debiting gives you the opportunity to set up automatic bill payments so that you never miss a bill payment. But while direct debits are a great way to stay on top of your bills, just make sure you have enough money in your account for the debit transaction to process.
Become a budgeter
Budgeting isn't as hard as you may think. Online calculators and mobile phone apps let you input the expenses that you face on a monthly basis and there are interactive tools available to let you adjust budgeted amounts in order to determine how to best meet your financial obligations.
Give yourself some room
Many Australians fall into the trap of establishing a budget that's just too tight. If you're living on a tight budget, what's your plan for financial emergencies? Would you be dealing with the burden of debt if emergency expenses arise?
It's important to save for emergency situations. It's recommended that you have enough money to get through two months in case of job loss. This gives you the breathing room you need to find a new job without having to worry about paying your mortgage or rent and putting food on the table.
Managing your bank accounts and budgeting are two steps that allow you to keep your finances under control. Consult Mortgage Choice's handy online calculators to help you work out budgeting specifically for home loan repayments and savings.