Many people live in fear of their personal finances and this could come back to haunt them in a number of ways. Here’s how to start taking back control.
PORTLAND, Maine – Whether it’s a growing pile of unpaid bills or a low bank account balance, many people in our state are struggling to keep their heads above water.
Evergreen Credit Union financial advisor Brenda Pollock says it can cause fear of finances and can make you want to hide your head in the sand and ignore those balances.
She offers several ways to face these fears and tackle these issues one by one:
Don’t ignore your finances
Whatever the reason you are afraid to face your finances, the rule of thumb is that you should spend less than what you earn. If you are worried about your personal finances, you may be getting bogged down in debt. Worse, ignoring your finances certainly won’t allow you to capitalize on opportunities to make your money work for you.
1. Open your mail and keep an accurate tally of your total debt.
2. Set a rudimentary budget.
3. Know where you stand financially and regularly monitor all of your accounts.
These three steps will empower you and help you overcome your fear of finances.
Keeping track of your checking accounts and credit cards is essential. With online and mobile banking, it’s easier than ever. Here are a few things to remember:
1. If you live in fear of your finances, you are probably living paycheck to paycheck. And you’re not alone, 70% of Millennials do. So, checking your accounts will help you control your spending and stay on track.
2. Choose one day per week to view your accounts. This will give you a better picture of your account activity, help you spot any fraud so you can report it early, as well as keep your money mindful and boost your confidence.
3. In addition to keeping your finances organized, if you lose your debit card, electronic funds transfer law will protect you against loss. However, the law only protects funds from the moment you report the card as missing or stolen to your bank.
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Beware of your Wi-Fi connection when verifying accounts
Whenever you go to check your bank account, you should always do it over a private and secure Wi-Fi network. If you’re outdoors or traveling, it’s best to use your phone’s cellular data connection if you need to verify an account.
The best part about bank alerts or account notifications is that you can customize the alerts to your preference and turn them on or off at any time. The alerts that we consider useful are …
1. Low Balance Alert – This will help you avoid potential overdraft charges, especially for those with a joint account.
2. High Balance Alert – Make your money work for you. You set this number so that when you’re alerted, it reminds you to spend a bit more on paying down debt or to transfer it to a savings, retirement, or other investment account.
3. Transaction Alert – These alerts report daily purchases. Keep in mind that scammers like to use multiple low-cost transactions to siphon off bank accounts or rack up charges on your credit card.
4. ATM withdrawals
5. Profile change alerts
6. And Direct Deposit Alerts – Payday is always a big day. Knowing that your paycheck has arrived in your account can help you plan bill payments and give you peace of mind.
Ultimately, if you’re worried about managing your finances, or if it keeps you awake at night, there are steps you can take today to overcome your fear of finances.
Start by banishing financial fear first. Focus on the positive aspects of your finances, reorganize your budget, ask for help, contribute to your emergency fund, don’t compare yourself to others and educate yourself.
Staying awake at night worrying about money won’t change your fears. Instead, calm your fears and be confident in your financial choices by taking control, monitoring weekly or daily, and be determined to actively respect the money you earn.