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Top Financial Advice for Young People: The Savings Corner presented by Coosa Valley Credit Union

Becoming an adult is not an easy process for some of us, especially in the financial department. It takes time to learn what will work for you and making mistakes along the way is only part of the journey.

With that in mind, I wanted to share five simple tips to help you simplify and get your finances in order, as well as two obstacles to avoid:

1. Use direct deposit. You’ll never have to wait in line to cash or deposit your paycheque again. Let your credit union automatically put your paycheck into your account so it’s in your account and waiting for you on payday.

2. Set up automatic withdrawals from your savings account. You don’t even have to think about saving money anymore! The checkout can remember for you. It’s the easiest way to build a solid savings without having to remember to pay each month.

3. Keep track of your money. Whether you’re checking your online bank account or the check register on the back of your checkbook, you’ll need to know exactly what’s in your account to avoid overdraft fees. And checking your balance online fairly regularly will let you know if any fraud is happening to your account sooner rather than later.

4. Create a payment schedule. We all know that overdue bills can cause big problems, so create an easy-to-read calendar that reminds you when bills and payments are due. Using Online Bill Pay can help you because you can set up bills to be paid automatically each month if you wish. You can also rearrange the dates when certain invoices are due each month to allow for a more balanced payment schedule.

5. Make a plan. Be sure to plan all your spending and saving goals using a budget. It doesn’t have to be fancy, but make it something you’ll actually use. A simple spreadsheet works for some, while others choose to use apps or online budgeting tools. Whatever method you use, make sure it’s realistic and takes your savings goals into account.

Avoid: Overusing credit. Having access to credit cards can be handy, but make sure you don’t overuse them. Most people know that credit cards can get us in trouble, but it’s very easy to fall into the debt trap. You start carrying a little balance on your credit cards and it accumulates. You may need to dip into your savings to pay your credit card bills. Avoid this situation by using credit sparingly and only for identified and planned purchases. Set up a savings plan for major purchases and pay for most, if not all, of them upfront. When you need to use credit cards, choose cards with great rates, low fees, rewards, and great customer service. Simplicity is key when it comes to finances.

Avoid: Overspending on a car. Buying a new car often tripped us up when we were young. Although it may make financial sense to buy a new car, be careful not to buy more cars than necessary. A flashy, expensive car can be tempting, but keep your long-term goals in mind and choose a car that meets your current needs without sabotaging your savings. Remember, just because you can be approved for a certain loan amount doesn’t mean you can actually afford it. Make sure any purchase fits your overall budget and savings goals.