Personal Finance Advice

Your checking account might merely be the place your money temporarily sits until it pays the bills, or you might instead keep a hefty balance in it all the time.  Whatever the situation, you should know that different financial institutions offer different products when it comes to checking accounts.  There is no reason why you should maintain a checking account at a bank or credit union if they are charging you an unreasonable amount of fees and not offering you the type of features you deserve.

Keep in mind that checking accounts are products, just like any other product by a merchant.  You wouldn’t buy an inferior product from a merchant, so why settle for an inferior product when it comes to your checking account?

What kind of features should you look for in a checking account? Ideally, you should have a checking account that has some or all of these features:

• No recurring fees
• Visa or MasterCard debit check card
• Easy ATM accessibility
• Accessible customer service representatives
• Interest on the balance
• Internet access for the account
• Free bill pay services

Plenty of other features are offered by financial institutions.  While some banks and credit unions might offer free access to brokerage services for checking account holders, other financial institutions might offer rewards programs for debit card purchases similar to a credit card program.  You might get access to special features by having a checking account with certain banks or credit unions.  For example, checking account holders with USAA have free access to limited financial advisor services.

You can pick and choose what features you would like to accompany your checking account.  You may not need all the features offered by the various banks and credit unions, so be sure to find the account that is right for you.  For example, don’t worry too much about whether a checking account offers interest on the balance if you don’t keep money in the account very much.  If you never use an ATM then you should not worry about whether there are fees charged for using foreign ATMs.  Do keep in mind the things you do need.  If you always keep a large balance in your checking account then you should get an account with generous interest rates.  If you write a lot of checks you should get a checking account that offers free checks.  Figure out what you need, and then find an account that suits your needs.  

Don’t settle for a checking account full of fees and with no extra features. 

Owning a home is the American Dream, and many people don’t feel as though their personal finances are well-rounded enough unless they have a mortgage in their names.  Some people simply assume that they can’t be in a good financial position unless they are homeowners.

This isn’t necessarily true, at least not with all people.  If you have never owned a home then you may not realize that a lot of people who own homes are in worse financial positions than people who don’t.  Although this isn’t true for the majority of homeowners, there are plenty of people who max out the equity in their homes and wind up in a situation where they actually owe more money than the home is worth.  Some people happen to buy a house in an area that encounters widespread real estate depreciation, and the next thing they know their dream home becomes a real financial problem.  For other people, damage to the house from an incident not adequately covered by insurance can be a financial blow that the homeowners just can’t recover from.

This isn’t what happens to the majority of homeowners, but it does happen to some people. 

Renting isn’t a sign of an unhealthy personal financial status.  In fact, renting is the better decision is many instances:

1.  You have a job which requires you to move frequently.

2.  You live paycheck to paycheck and have little or no savings.

3.  You aren’t really sure of your plans for the next few years.

4.  You are preparing to start a family and will need a bigger house than you can afford to buy.

There are also people who prefer to rent because of the flexibility associated with renting as opposed to owning a home.  If you want to move on impulse you might be able to wiggle your way out of a lease, or in the worst case scenario you may have to pay the rent until another tenant takes over in addition to penalties and fees.  On the other hand, if you own a home you’ll have to go through the process of getting the home placed on the market or renting it out to other people.  You can’t just walk away from a home that you have a mortgage on.

This isn’t to say that renters only rent because they want to be able to up and leave at a moment’s notice.  Instead, it points out the fact that renting is not something that is only done because there is no other choice.

If you choose to rent, you should not feel as though your personal finances suffer for it.  While it is true that owning a home can potentially raise a person’s net worth, it isn’t the only way to do so.  You can rent instead of owning and still have personal finances that are in great shape.

If you want to own a home, own a home.  If you want to rent, do so without feeling guilty about having made that choice.

Almost everyone can remember an instance when they spent too much money.  Maybe you bought a car without doing very much research or perhaps you maxed out a department store credit card during a whirlwind shopping spree.  As long as you were able to financially recover from your mistake - and learned something from the whole experience - then it’s not really something that you need to be too terribly concerned about or ashamed of.

On the other hand, if you are one of the many people who actually have a spending problem then you might not be able to narrow your financial missteps into a few isolated incidents.  You might instead have a consistent pattern of spending too much money, feeling guilty for a short amount of time, and then going out and spending too much money all over again.  If your overspending is more of the norm than the exception then you may have more of a problem on your hands than simply spending too much money; you might actually have a spending problem.

What is the difference between just being bad with money and having an actual problem? It’s one thing to be bad with money and to once in a while indulge in some purchases that you shouldn’t make.  It’s another thing entirely to feel as though you couldn’t stop shopping, even if you wanted to.  Shopping can be a compulsion, and just like any other compulsion like gambling or over-eating it’s something that can cause a person to feel shame as well as feel completely out of control.

Why do people develop spending problems? Some people feel empowered by shopping, especially when they feel as though they have really found a great deal.  This can lead some people to actually buy things they don’t need or will ever use, simply because the deal was entirely too enticing to refuse.  At the time of the purchase they may feel as though they are actually saving money because the item they purchase is on sale, but if it’s a childless person buying baby clothes or a person without a car buying car accessories then there is obviously a problem.

Another reason some people fall into a spending problem is because it manifests as a symptom of something bigger.  People who have a spending problem may actually suffer from depression that is not apparent in any other actions except for the overspending.  There are some people who have problems with Obsessive Compulsive Disorder and spend to relieve anxiety.  Other people are literally considered addicted to shopping as a characteristic of their addictive personalities.

How do you know if you have a spending problem? Here are a few signs:

1.  You empowered and excited while shopping, but then feel guilty about the purchases later.

2.  You spend more than you can afford to spend.

3.  You are consistently in deep debt.

4.  You buy things you don’t need.

5.  You hoard items or hide your purchases from other people.

6.  You keep telling yourself that you need to get your spending under control, but you never make an attempt to do so.

The first step is to try to quell your spending problem on your own, but if that doesn’t work then you may need to seek outside assistance.  Debtors Anonymous is a good place to start, and speaking with a therapist or counselor may reveal underlying issues that need to be addressed before you can start to work on your spending problem.