There’s no such thing as starting too early when it comes to creating a solid financial foundation. No matter what your income, there are a few, must-have steps and habits that will help you gain the skills for whatever comes next.
Checking and Saving: Essentials for a Solid Financial Foundation.
Your checking account may be the most important financial tool you use. It’s a hub for your everyday transactions—a place to deposit paychecks, pay bills, budget and take a closer look at your spending habits. And in an increasingly cashless society, it’s nearly impossible to function financially without one. Yes, there are apps that function like checking accounts, but only a checking account at a reputable bank is insured for up to $250,000 by the FDIC (Federal Deposit Insurance Corporation). That additional security is important considering how hard you worked to earn every dollar.
Next up, a savings account. Your savings account will help you establish a financial safety net for emergencies. By setting aside dollars every month, you can create a cushion to weather a financial setback, pay for an emergency expense or handle a temporary loss of income. A separate account just for savings also creates a “temptation barrier” between long-term funds and what’s been set aside for daily expenses.
If you want to go further and accelerate your savings, interest-earning deposit accounts like CDs (certificate of deposit) and money markets can help your existing dollars earn more. Both are FDIC insured and have guaranteed returns. CDs require a smaller deposit, and we recommend learning more about the differences between each.
