By Keemonica Johnson, Bank Manager
Citizens National Bank's Bonita Lakes Banking Centre
If you're a recent graduate who has landed your first job, we'd like to say congratulations. After all, it's an exciting time. You're earning your own money, so now you have much more freedom to use your funds as you see fit.
To help you get started in the right direction, we'd like to recommend several steps that are sure to have a great impact on your financial success.
- Open a checking account with a local bank. Most banks in town offer low-cost checking accounts for students, and there are many caring bankers who will be happy to help you get started with everything you need, such as a debit card, online banking, and more.
- Set up direct deposit with your employer if at all possible. That way, your paycheck will be available instantly, and you won't have to worry about getting to the bank by closing time to make a deposit.
- Set up automatic savings transfers. It's never too early to start saving, so why not begin with your first paycheck? Your local bank can help you open a savings account so you can automatically transfer funds to your savings each time you get paid. If you put money aside a little bit at a time, it's much easier to achieve a goal such as buying a vehicle, taking a vacation, making a down payment on a house, or simply being prepared if an emergency arises.
- Be sure and create a budget for yourself. You don't have to create anything fancy. At a bare minimum, simply keep track of the income you regularly receive during each pay period and be sure to itemize your discretionary and nondiscretionary expenses. Discretionary expenses include the money you spend on entertainment, shopping, and other purchases that represent wants more than needs. Nondiscretionary expenses are essential expenditures like food, gasoline, housing, and utilities that are considered basics.
- Build your credit history. Establishing a good credit score and a strong credit history can help you with all kinds of things from buying a home one day to getting a preferred interest rate on any other loans you might need. If you have a credit card, make your payments on time each month and don't miss payments. Your credit score follows you everywhere you go, so it's really important to manage credit wisely.
- Set up recurring contributions to your employer-sponsored retirement plan (if available). It's never too early to start planning for retirement. Even if you can contribute 1% of your paycheck to your retirement savings, that's better than nothing. Plus, your contributions usually come out of your gross (before-tax) income and aren't subject to federal or state income tax during the year in which you make them, which is a clear financial benefit over and above your plan's return on investment. If your company offers a matching contribution, then contribute up to that percentage in order to take full advantage of the match. It's basically free money.
As you begin the exciting journey of your career, or simply take on a summer job to further your education, we wish you many years of success. Anytime you have questions about banking or good money management practices feel free to contact Citizens National Bank or the bank of your choice. We have terrific local bankers who are committed to your financial success!