Banking

How To Manage Bank Accounts

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 9 minute read

As a kid, I recall helping my mom with the monthly bill-paying ritual. She would sit at the kitchen table with a stack of papers, envelopes, postage stamps, and her checkbook in front of her as she calculated the sums, balanced the budget, and filed away the various receipts and bills.

That much paperwork today would make me cringe. Every month, I set aside time to sit down and pay my monthly bills, whether they be for gas, medical care, the Internet, or anything else. The dissimilarity?

To accomplish this, I just use the internet. Financial management has been completely transformed by technological advancements. Unfortunately, you may still be using inefficient methods if you are unaware of the tools, software, and services at your disposal. 

But if you want to get your personal budget, payments, and savings under control, you’ll need to work to streamline them. It’s possible to simplify your finances and improve your money management with only a few taps of your finger or clicks of your mouse.

Making Your Finances More Efficient

You can simplify your finances without necessarily having to reduce your spending, though doing so would not be a terrible idea. Instead, it means simplifying your financial life by eliminating cumbersome tasks like balancing a checkbook or switching to a more flexible manner of making payments. 

The notion is that when finances are more convenient and simplified, it’s easier to manage your money overall. You’re more likely to check your bank balance on your phone rather than going to a bank machine to do the same, and making financial management easier gives a new element of awareness and control over what you spend and save.

1. Limit using paper

When the monthly bills start piling up, it’s easy for me to feel overwhelmed. No matter if it’s the cable bill or a medical bill, I often set aside the envelopes without opening them until a later time. Of course, this can drive me to adopt an out-of-sight, out-of-mind mentality, and as a result, I’ve paid several late penalties.

When it is practical, I now prefer electronic methods. When a bill arrives in my inbox, I simply click a few buttons on my phone or computer, and the money is transferred. In this way, I can avoid forgetting about it or pushing it off till later.

It is possible to go paperless with a variety of services and invoices. If you pay your bills online, you may be able to switch to receiving them via email instead of snail mail by selecting this option. 

Then, simply comply with the on-screen instructions provided in the email to make a payment. Also, rather than sifting through a pile of bills to see where your money went, you can just log in to your accounts and print off a statement around tax time.

2. Open an online banking account

74% of bank cardholders, according to a 2011 research by comScore, made all of their banking transactions online. Of course not! The convenience of banking online; Online banking has made it possible to perform a variety of banking-related tasks that used to necessitate a visit to a physical branch. 

Avoiding unnecessary travel is a huge time and cost saver when you need to do things like make a money transfer, check your account balance, or pay bills. Online banking eliminates the need for paper statements and in-person transactions, much as going paperless with your utility bills.

When you join up for online banking services, you gain fast access to your funds, which is a huge perk. While you won’t be able to make a deposit or withdrawal, you can verify that a payment has been processed or double-check your spending against your budget in a flash. 

In and of itself, this convenience can help you better manage your money and have accurate financial data on hand whenever you need it.

To use the online banking features of most banks, you’ll first need to create an account. To do this online, you will need your bank account number, verification that you are the account owner (my bank uses a PIN number system), and the creation of a login and password for future use.

3. Utilize Apps

I’m not alone in thinking that my smartphone is the best tool for organizing my finances; according to comScore, 59% of bank cardholders use their mobile devices for the majority of their banking activities. 

Why not, then? When you have access to capabilities that are often only available online, such as mobile check deposit, account transfers, and bill pay, all in one convenient app, you can quickly do things like:

  • Checking your balance
  • Account transfers
  • Mobile check deposit
  • Bill pay
  • A list of transactions
  • Budgeting tools
  • Fund transfers to other account holders who bank with the same institution

See whether your financial institution has a mobile app. Features may vary by institution, but most banks and credit unions now have mobile apps.

As a member of a local credit union, I have access to a fantastic, feature-rich app that allows me to perform virtually all of the tasks that a teller would. You may simplify your financial life and save time and effort by using a number of useful apps. 

Some of my personal favorites are as follows:

  1. Mint is a free all-purpose program that works on iOS, Android, and Windows. Connect your numerous bank accounts to Mint so you can view your balances and purchases in a consolidated view. A budgeting feature is also available in Mint, allowing you to track your spending against your goals at any moment.
  2. Verify (Unlimited, Apple, Android, Microsoft). Try to Check if you have trouble keeping track of when payments are due. When you enter your accounts, bills, and other relevant data into Check, the app will notify you in advance of their due dates. In addition, the app facilitates bill payments. Rather than juggling six or seven separate accounts and their corresponding bills, the procedure is streamlined.
  3. Priced at $1.99 on both iOS and Android, DebtTracker Pro helps you keep track of your debts. For some, the sheer quantity of loans and the total amount owed can be intimidating. DebtTracker Pro is a helpful tool for managing your debts by allowing you to input your outstanding amounts and interest rates and then create a repayment plan based on your preferences, such as prioritizing the repayment of debts with the highest interest rates. Having a clear picture of what has to be done and how long a particular loan will take to pay off makes it much simpler to get a handle on your debt.

4. Have Your Payments Automated

When it comes to accounts that don’t change from month to month, I like to have them paid for me automatically. Since I always owe the same amount on my city bill, I have it set up so that the money is automatically deducted from my account on the due date each month. 

Moreover, many banks allow you to set up your own auto-pay rules within your account so that the payment is delivered electronically or via check to your selected service provider; you don’t have to wait for a utility or creditor to give the option.

Accounts that fluctuate from month to month can be set up for automatic payment, but I prefer to pay them by hand so I can better manage my finances. I prefer to be aware of and pay any unexpectedly large electric bills so that I can make adjustments to my spending habits as necessary.

Using automatic payments does not give you permission to forget about your bills. Verify that all of your payments and purchases are being paid in a timely manner and for the correct amounts.

5. Combine or Delete Accounts

You could feel overwhelmed by the sheer volume of accounts you have open, payments you need to make, and account management tasks you need to do.

Streamlining your finances is like giving your finances a spring cleaning, clearing out all the clutter so that making payments, managing accounts, and arranging utilities are easier.

Evaluate the costs of your usual monthly outlays. It’s possible that you’ll realize some aren’t as crucial as others. While you must pay for heat and electricity, are you adding unnecessary stress to your life by additionally paying for a DVD service, expensive satellite package, or internet video service? 

When it’s feasible, it’s preferable to merge or close accounts. For instance, I used to subscribe to both Netflix and Amazon Prime, but when Amazon added video streaming as part of Prime, I only needed to keep up with and pay for one service.

In addition, if you have several credit cards but only a modest balance on one, you should make it a priority to clear it off as soon as possible. That will take care of one less payment on your plate.

6. Plan A Recurring Budget Review

According to Gallup research from 2013 about a third of Americans really make and stick to a budget. The survey found that some people may not feel they need to stick to a budget because of the convenience of internet banking, but it stressed the importance of sticking to a budget regardless.

In a perfect world, you’d already have a budget set up. However, a single accounting exercise will not suffice to provide fiscal stability. Budgets require regular reviews to ensure accuracy and provide room for unanticipated costs like travel and vacation. 

If you don’t check your spending against your income every month, your finances may become chaotic. Make a point to review your finances every month. 

It won’t take more than 20 minutes to do the following:

  1. Collect the bills for the month.
  2. Proceed to your online bank account.
  3. Look over your transactions to verify sure the bills have been paid in full and to spot any erroneous or questionable charges.
  4. Talk to your significant other about your plans and budget for the following month.
  5. Are we putting money away for a trip? Are we able to pay off that medical bill?
  6. If any calculations need revising, like the cost of electricity during the scorching summer months, do it now.
  7. Verifying that you are on pace to achieve your financial objectives.
  8. Stop using the account.

Spending 20 minutes per month bringing a budget back into line is much more manageable than spending a day or more sifting through a year’s worth of bills and costs because the budget ran off the rails. It’s a fast and easy approach to check sure you’re on the right track.

7. Split Payments Up

You might be like the majority of American households in that you are paid every two weeks. However, it’s likely that most of your payments are due on the first of the month, which can be stressful and throw off your budget. 

Depending on your financial situation, you may have to scrimp the first two weeks of the month and then feast like a king the rest of the time. You can better manage your finances and keep your spending under control by balancing your payments.

Numerous monthly obligations fall on the first of the month and cannot be postponed. But if you can choose when other payments, like retirement and charity donations, are sent, it’s best to do it during the second pay period so that your finances are more evenly distributed.

You can use grace periods on loans to your advantage by spreading out your payments. Some loans, like those for automobiles, allow the borrower a grace period of 10–15 days before late payments result in penalties. If you get paid weekly or on an irregular timetable, this can assist alleviate the bottle-necking that occurs when you have to pay all of your payments at once.

It’s important to keep different grace periods for different payments straight. Keep in mind that different loans have different grace periods; your mortgage might offer you 15 days, but your vehicle loan might only give you 10 days.

Bottom Line

The difficulty with becoming bogged down in the details of payments, schedules, balances, and transfers is that it can make it difficult to maintain the motivation to manage one’s finances. You find that your money is controlling you instead. 

The benefits of automating and pre-scheduling your work are clear: save time and effort wherever possible! Lessening the burden of worrying about money and personal finances can be accomplished by making use of the various resources accessible to you.

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