Navigating finances can be intimidating for plenty of folks, and understandably so.
From terms you may not be familiar with to making an informed decision about which route is best to take with your investments, it's a lot to handle. Thankfully, many financial institutions such as banks and credit unions make available resources to their customers and members aimed at informing and educating. Let's explore some common options.
Leanne Rahn, Financial Advisor with Fiduciary Financial Advisors, explains that many financial institutions offer their customers savings, budgeting and goal-planning tools, many of which can auto-generate budget categories and spending targets due to your institution already having your financial information.
"If you avoid all the budgeting apps because of the initial setup intimidation, utilizing your existing bank budgeting tool may be the jumpstart you need!" Rahn said, noting your financial institution's "Trends" tool as useful for your financial health. "Trends are powerful. You can see your spending habits (wise and poor), over a span of time to realistically answer, 'What do I spend my money on?' Trends give you honest feedback and can motivate you to work on any unwanted spending habits."
Rahn says that utilizing your financial institution's automatic transfers between accounts can be a game changer for your savings.
"So much of our world is automatic and hands-off (Amazon subscription services, anyone?), so why not treat your savings the same way?" Rahn said. "Set an amount you feel comfortable automatically transferring from your checking account to your savings account (or IRA, brokerage account, etc.) and watch your savings grow without having to lift a finger."
Financial institution's high-yield checking accounts have grown in popularity and can also be a great tool for short-term savings.
"However, keep in mind, oftentimes, these high-yield checking accounts have certain hoops you must jump through to receive the benefit. (i.e., direct deposit, a certain number of transactions per month, signing up for e-delivery of statements, etc.)," Rahn said. "Plus, keep in mind the maximum amount you can earn interest on."
A way you can maximize the benefit of these accounts, Rahn explains, is to forget the "checking account" label.
"Let's say the max you can earn a high-yield rate on is $20,000. Don't just think you have to have your checking account money in there. Maximize your short-term savings by transferring partial or all of it over to the high-yield checking account," Rahn said. "As long as you're following your financial institution's guidelines to qualify for the benefit, you can easily maximize your liquid savings. Just be sure to keep track of your savings balance vs. your checking account balance to ensure you don't accidentally dip into your savings unwantedly."
When it comes to financial literacy, financial institutions often offer chat services directly on their website, in addition to their customer service being able to be reached via phone.
"Don't forget about the FAQ section often listed on their website—chances are if you have this specific question, other customers do, too," Rahn explained, making note of other helpful resources such as financial webinars, blogs and podcasts.
Specific groups such as students can also often take advantage of opportunities at their financial institutions.
"Some financial institutions even have partnerships with colleges and universities giving you easy access to ATMs on campus," Rahn shared. "Besides the convenience and the ability to display your school pride on your card, students may find programs with lower (or no) monthly fees, fee grace or reimbursements for overdrafts, no-charge wire transfers, no account minimums, $0 ATM transaction fees and more. High schoolers and other students can also take advantage of the above benefits, which can be a great starting place on their wealth-building journey."
Remember: Utilizing mobile banking with your financial institution can also give you quick access to transactions, account balance status and transfers; the ability to quickly lock your cards in the event of card loss and/or suspected fraudulent activity; and a way to enter upcoming travel details to avoid potential card issues while away from home.
Fiduciary Financial Advisors is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
Written by Sarah Suydam, Managing Editor for West Michigan Woman.
This article originally appeared in the Oct/Nov '24 issue of West Michigan Woman.
