Setting Up Your Financial Future

 The future should not be seen as a source of fear and anxiety, but an opportunity for preparation. As soon as you start earning, establishing a firm financial foundation should already be one of your top priorities.

 

The truth is, people cannot work forever. Unless they have their own business, the retirement age as mandated by law will pull them out of the workforce. Hence, regardless of age, setting a sound financial future is a must. Others start as young as 18, while others reach middle age before taking steps towards having a secure financial future. As a rule, starting early is always best.

 

No amount of planning, however, will make the process easier. Executing this process requires a conscious effort to actually save up and store it in a bank. Before everything else, decide for yourself that you really want to create a secure financial future, and your actions will be more directed towards this goal.

 

Finding the Right Bank for You

Everyone needs to choose a bank that will cater to their specific needs. If you are simply storing your money in a hiding place somewhere in your house, chances are it will be easier for you to use it on a whim. The point of saving up is to use it for future use. Hopefully, storing it in a bank would be enough deterrent for you to not use your savings upon impulse.

 

Here is a step-by-step guide on choosing the right bank:

 

1. Decide your purpose for the money that you’ll save. It may be for a) accumulating interest; or b) depositing and withdrawing on a regular basis.
2. Match the banking hours with your schedule. If you work on a tight schedule, you may opt for a bank that allows online transactions.
3. Check out the banks’ value added features. Most banks already provide free services on top of their regular banking services. However, there are other features, such as access to exclusive privileges, which you may be willing to pay for. Before choosing any additional features, ask yourself if you really need it or not.
4. Do your research. Friends and relatives are often the most reliable sources of recommendations on which bank to choose, especially if you are doing this for the first time. Various blogs and Internet sources provide very informative data as well.
5. Find your bank. Once your banking behaviors and preferences are settled, it’s time to choose a bank. You can go directly to their website or simply walk in any of their branches. Ask for a list of their services, fee schedules, business hours, interest rates, and the like. Compare and contrast different banks before you pick one.

 

Open a Bank Account

With all the previous guidelines considered, once you have chosen your bank, you are now ready to open your account. For newbies, walking in a bank without the basic banking know-how may cause them more confusion than clarity. Follow these steps to find out how to open a bank account:

 

1. Decide whether you want a checking or savings account.

The difference between the two is actually very simple. Checking accounts allow a client to write checks, but it does not acquire interest. This kind of account provides a convenient way to automatically pay bills. It is also free and requires a lower maintaining balance.

 

Savings accounts, on the other hand, allow clients to deposit money that will generate interest over time. It would be wise to choose banks with high-yield interest rates, in order to augment your savings.

 

1. Consider your personal needs.

This includes the proximity of the bank to your home or office, the available number of ATM’s, banking hours, additional fee charges, Internet banking, and all other features that may affect your convenience.

 

1. Open your account.

Before going through the application process, take note of the requirements beforehand, such as the number of ID’s needed, minimum deposit, and photos. Then go to the branch nearest you and open your account. Depending on the product you chose, you will get an account number, an ATM card, a passbook, or all three.

 

Importance of Savings

People save for a rainy day. Considering the fluctuating economy and the rise in prices of basic commodities, knowing that there is a certain amount of funds ready in case of emergency is enough to let a person sleep better at night. Here are three reasons why people save:

1. Saving money for something. This is usually done for short-term purchases that come in the form of buying material things and paying for vacations.
2. Saving money for investing. A lot of people want to create streams of passive income, in case they cannot rely on their jobs anymore. Businesses and other forms of investments require a certain amount of capital, and people turn to their savings for these ventures.
3. Saving money for your future. We cannot predict the future. In the event of unexpected costs, people can pull money out of their savings pool. Health emergencies, special occasions, servicing, insurance, and car repairs are only a few examples of unforeseen costs.

 

Bonus Tip: How to Achieve Your Saving Goals

Scouring through Internet sources will give anyone different views on exactly how much a person should save up. Others say you should save 20 percent of monthly earnings, while other say everyone should aim to save up to three months’ worth of one’s salary. Whatever your goal is, achieving it requires:

 

1. Patience. At the onset, people may feel frustrated looking at the small amount of money in their bank accounts. Do not be discouraged. It takes patience and hard work to reach your goals.
2. Consistency. Commit to saving up a certain amount of money every month. Try your best not to go below that amount. In fact, add up more if circumstances permit.
3. Attainability. Who wouldn’t want a million dollars in their bank? However, stick to a realistic and attainable savings plan. Consider your income stream. Your savings should not hamper your way of living or get in the way of other top-priority payments.

 

Talking about the future either induces fear or acceptance. Most of the time, however, people fall under the second group. No matter how young or old you are, securing your financial future is a definite need. Keep that goal in mind. How much a person can set aside every pay check varies on a case-to-case basis. The important thing is that you save for your future.