5 Everyday Ways to Manage Your Money

Being “good with money” isn’t an innate trait – it’s about choosing and practicing habits that make the money you have work harder. No matter where you are on your financial journey, here are five solid money management tips to help you take control of how you save, spend and pay off debt. 

1. Maximize money that’s readily available
   If you have idle funds — even a small amount — make sure your money is earning interest. Generally, savings accounts pay a higher interest rate than checking and high-yield savings accounts generally offer the highest. Build momentum by scheduling automatic, recurring transfers from checking to savings with every paycheck to “set it and forget it” – a proven tactic that can help you grow your nest egg or emergency fund quickly. Explore our Supercharge Your Savings blog for nine ways to maximize your savings.
   
   
2. Take your employer’s 401(k) matching contribution
   If your employer offers a 401(k) retirement savings plan and they also match your contributions, you’re leaving free money on the table if you don’t partake. There’s a minimum contribution level you’ll need to meet to be eligible for your employer match, typically 3-4% of your pre-tax pay. Consider stretching to contribute as much as you can – you’ll be amazed by how quickly what you put aside adds up. Check out Seven Ways to Save for Retirement on our blog.
   
   
3. Pay off credit card debt strategically
   Life happens, and sometimes we need to use credit cards — there’s nothing wrong with debt for short-term uses. However, credit cards tend to have the highest interest rates among credit products, which means interest accrues quickly. It’s essential to have a strategy to pay them off as soon as possible. A couple of ideas: If your credit score is stronger than when you opened your card, you may qualify for a lower interest rate. If you’ve had the card for a while, ask if you’re eligible for a lower rate. If you’re declined, don’t shy away from shopping for a new card. Read our blog Paying Off Debt: What’s the Best Strategy. 
   
   You can also consider using your card’s balance transfer option to move the balance from a higher-rate card to one with a lower rate – this will help you pay off the debt more quickly. The key is to steer clear of using the freed-up space on the high-interest card for new charges. Experts advise if you have a little extra money each month it’s better to pay extra on a card with a highest interest rate rather than let the extra money sit in your checking account. As an example, if you have a card with a 25% interest rate, think of paying extra as saving 25% of the balance due.
   
   
4. Be proactive about certificates of deposit
   Certificates of deposit (CDs) are a great way to maximize idle funds. Typically, they earn higher interest rates than other savings products.  When you have available money that you can leave untouched for a fixed period (from months to years), a CD can help you grow your money. The key is to stay alert for the maturity date. Your financial institution will send you a notice when your CD is about to renew and that’s your reminder to actively engage. Your options include:
   
   • Letting it automatically renew at the rate on the maturity notice (likely different from the opening rate)
   • Reinvesting the funds into a new CD, ideally one with a longer term to take advantage of compounding interest
   • Withdrawing the funds and putting them to work in another way
   
   PRO TIP: As the funds mature, ask yourself if you need them now. If not, how long can you leave the money and let it continue to earn you interest? Your answer will guide you toward your best options. For example, if you are carrying $5,000 in credit card debt with a 20% interest rate and you have a $5,000 maturing CD, earning 5% — you’ll “pay yourself” 15%* by using the funds to pay off the credit card. 
   
   Our experts are always ready to make sure you’re aware of your options and can help you run the numbers to make an informed decision. Read our Understanding Certificates of Deposit and CD Ladders blog to learn more.
   
   
5. Consider the power of an IRA (Individual Retirement Account) 
   There are many types of IRAs, but two of the most well-known are the Traditional IRA and the Roth IRA. These retirement savings accounts are taxed differently. Roth contributions funded with after-tax income and Traditional contributions from pre-tax income. For a Roth IRA, that means the taxes are already paid, so whatever you take out in retirement is all yours. With a Traditional IRA, you are taxed when you begin taking distributions in retirement. Make sure you understand the different features and benefits of each IRA type – and how they align you’re your goals -- before you open one. Learn more from our blog, Your Guide to IRAs: Savings for Every Life Stage, or talk to us about your IRA options.

*This example is for demonstration purposes and may not be an accurate representation of actual savings depending on the terms and conditions of your credit and debit products.