Building wealth isn’t just about getting a high-paying job or multiple side hustles to earn as much as possible. It’s also about being smart with the money you do make. Even if you only earn slightly more than what you need to cover your everyday expenses, you can make your money go further than you thought possible. Whether you’re trying to build wealth or simply live comfortably, lay a foundation for success with these four helpful banking tips.
Automate Your Savings
Whether you bank with Farmers Bank or another bank, set up an automatic payment to a savings or investment account when you want to start building wealth. When money automatically leaves your everyday account and isn’t within easy reach, the temptation to spend it is removed. Best of all, most banks make it easy to set up automatic payments to yourself and other people.
Open a High-Yield Savings Account
When you’re not quite ready to invest in stocks, crypto, property, and similar investment opportunities, opening a high-yield savings account can be an excellent first step toward making your money work for you.
A high-yield savings account is a bank account that earns significantly more interest than traditional bank accounts. This means that your balance can grow higher through the power of compound interest. Such bank accounts are beneficial for first-time savers and individuals seeking to establish a short-term savings account or emergency fund.
Be Aware of Fees
You won’t find a bank that doesn’t charge fees. It’s the nature of banking institutions. However, awareness of the fees that banks charge can put you in a strong position to plan for them or even avoid them.
For example, if your bank charges an overdraft fee, adjust your spending habits or ensure you always have an emergency buffer in your everyday account to avoid it. You can also compare bank account types and opt for the ones with fewer or no fees.
Separate Your Funds
You’ll always find a use for money left in your bank account at the end of a pay cycle. You might treat yourself to lunch at a cafe or maybe even dabble in online shopping. However, if you made sure there was no ‘excess’ funds left in your bank account just before your payday, you could avoid unnecessary spending.
That’s where multiple bank accounts come into play. Create bank accounts that serve different purposes as you work toward your financial goals. For example, you might have an everyday account for bills and everyday spending, a short-term savings account, an emergency fund for unexpected expenses such as car repairs and broken appliances, and a long-term savings account for major purchases, like a property or vehicle. When payday arrives and your money is separated into various bank accounts, you’re more likely to have complete control over unnecessary spending.
Building wealth doesn’t have to mean having multiple jobs to earn more money. It can also mean being more prudent with the money you do earn. These banking tips are just some of the many actions you can take to give your earnings more value and enjoy more financial control.
