Personal Finance Advice

There isn’t a much easier way of getting paid than direct deposit.  On payday, your pay goes directly into your checking or savings account and it’s usually immediately accessible unless you owe your financial institution some money for being overdrawn or something similar.  Employees like direct deposit because they can get their hands on their money faster, and employers like direct deposit because it takes a lot of work out of paying employees.

If you don’t already have direct deposit, here are some reasons why it might help your personal finances:

Your money is in the bank instead of in your hands.  For some people, there is nothing worse than a wad of cash in their hands because their first inclination is to spend it.  In some cases it’s better to never actually see the money, but instead to just have it appear in your account.

It simplifies your personal finances.  Have your pay deposited directly into your account and then have your recurring bills automatically deducted from the same account.  It’s the most streamlined way to take care of your personal finances, and all you have to do is stay up to date on your check register.

Many banks give perks to direct deposit customers.  If you have direct deposit then you may not have to pay some of the fees that other customers have to pay for the same services.  Most banks have a checking account option for customers that is completely free as long as there is a monthly direct deposit into the account.

You can’t lose a direct deposit.  With paper checks, prepaid payroll debit cards and cash you always run the risk of losing them or misplacing them.  You can’t do that with direct deposit.

If you do have direct deposit, keep these things in mind:

Always make sure it’s there before you start spending.  Mistakes can happen, so before you start writing checks or making payments just do a quick check to make sure that the money is actually in your account.  You don’t want to wind up overdrawn just because the payroll office at your work made a mistake.

Keep track of your money.  With everything automatic it may be quite tempting to stop tracking your money and logging in your spending like you should.  Keep in mind, however, that a big portion of effective personal financial management is keeping track of everything.  You should still write out a budget and you should still keep a check register up to date.

If your work doesn’t offer direct deposit, have a talk with your boss and see if it can be instituted.  It’s such an easy and streamlined way to receive your pay that you should definitely take the time to get access to it.