Are you still using the same bank account that you had when you were a child?  If so, it’s time for you to review your bank accounts.  This is also a good idea for anyone who hasn’t done a review of his/her bank accounts for a long time.  You may be surprised to discover that you have been spending a lot of money on service fees simply because you don’t have the right banking package, or you could be forfeiting earning interest because you don’t have an interest bearing account.

The key is to be proactive.  The best way to ensure you are using the best banking package to suit your needs, is to get a hold of a copy of the statement of fees for your financial institutions holding your accounts and determine what fees you are being charged on a regular basis.  You can often find fee information online as well. Also, most accounts set up for children pay a very low interest rate, so if you are still using one, you should contact your financial institution and get it changed over to an interest-bearing account.

Take a close look at your bank statements.  If after looking at your statements, you realize that you are being charged an excessive amount of fees, ask for a bank account geared towards your purpose for the account.  For example, if you need unlimited banking transactions, choose a package that will provide this rather than paying a per transaction fee.

If you have savings accounts that aren’t paying enough interest, ask for the highest interest bearing accounts and switch your existing accounts accordingly.  Close any bank accounts that you are no longer using in order to simplify your banking and to avoid any inactivity or dormant fees.

When opening a new account, make sure you understand the ins and outs of the account, such as any fees that will be charged, how many transactions you can do each month, and whether or not the account is accessible through ATMs, etc.  It’s also important to understand how much interest, if any, the account pays, how often it’s paid, and how it’s calculated.  Some financial institutions will allow you to put your money into a monthly interest bearing account first, and then they set it up so it will automatically transfer it into an annual interest bearing account so you can earn interest in both accounts with the same deposit.  Ask your bank or credit union if they have such an option.

Always ask questions and never be afraid to probe until you find the best possible bank accounts that will suit your needs.  As time passes, your needs will change, so be sure to contact your bank when they do.

When building a financial strategy for yourself and your family, it’s a good idea to take the time to meet with a Financial Advisor, as advisors are experts in investing, taxation, estate planning, retirement planning, and insurance.  When you partner with a Financial Advisor, they will be able to help you build a strategy in order to achieve your financial goals.  Why try to do it all on your own when you can take advantage of professional guidance?

That being said, it’s important that you find a good Financial Advisor that has your best interests at heart.  Below are some things to look for when you are choosing a Financial Advisor:

*You need to feel comfortable with the advisor so you can work well together.

*The advisor must have an appropriate educational background and belong to a professional association that has a code of standards and ethics.

*The advisor should work for a solid and established financial institution.

*The advisor should be the one who helps you with all your subsequent needs.

*The advisor must inform you of how he/she is compensated for working on your account.

*The advisor must be a good listener who will help you to develop a strategy in order to achieve your short term, medium term, and long term goals based on your current and desired personal, family, and financial situation.

Make an appointment today to meet with a Financial Advisor, and then be sure to meet with your advisor on a regular basis as your life goals and investment objectives will change over time.

For the most part, setting up preauthorized payments for your bills is a good idea.  It’s convenient, and it ensures that your bills will be paid on time.  When life gets busy you don’t have to worry about remembering to pay your bills. 

However, there is another side to preauthorized payments that you need to consider.  If you are on a tight budget  – living from paycheck to paycheck, you may not find preauthorized payments helpful.  Why?  Because if you suddenly realize you cannot afford to have the payment deduct from your bank account, you will have to go through the hassle of contacting your payee and they often need at least 2 weeks notice in order to cancel a payment.  You can often place a stop payment on the item through your financial institution but it will cost you.  So, if you really don’t know from month to month if you will have enough to pay your bills, I wouldn’t recommend setting up preauthorized payments.

Preauthorized payments are good for people who know they’ll have enough to pay their bills, and who don’t want to be bothered with having to pay them manually each month.   They are also a great way to tuck away money for retirement.  Set up a preauthorized payment into your retirement savings account on pay day and you won’t miss the funds. 

If you do use preauthorized payments, be sure to use an account that always carries enough funds so that you don’t ever get caught off guard.  You don’t want to be stuck paying hefty NSF (nonsufficient fund fees) to your financial institution.

ATM use can be costly if you aren’t careful.  Before using an ATM, I would recommend first finding out how much the fees are going to be.  Check with your financial institution (FI) to determine what fees they will charge you.  Keep in mind that even if your FI doesn’t charge you, if you use another bank’s ATM the other bank will charge you!  If you discover that you are being charged for ATM withdrawals, either make one large withdrawal instead of several smaller ones, or consider using your debit card or credit card instead of using cash to make purchases.  You can also ask for cash back at local grocery stores and other retail stores.  ATMs certainly are convenient, but make sure that you are not paying excessive fees when using them.  Here are two questions to ask your FI:

1.  Am I charged any fees if I use your ATM machines?

- for cash withdrawals?

-for transferring funds?

-for balance inquiries?

2. Do you charge me fees if I use another FI’s ATM machines?  If so, how much?

It is really important to take a close look at your current banking products to see if they are working for you.  For instance, if you look at your bank statements for the past few months, are you being charged monthly fees or transaction fees?  If so, contact your financial institution to see if they have a product that meets your needs that doesn’t charge fees or that is more suited to your use of the account.  Often financial institutions improve their products and it is up to you to make the most of these improvements.  Although you will often receive mailings from your bank or credit union, if you don’t pay attention, you could miss out on something that could benefit you.  That’s why it’s important to ask!!!

If you are a student or a senior citizen, check with your financial institution to see if they have products specifically designed for you.  Often seniors and students qualify for products without any banking fees.  Don’t be passive when it comes to banking.  Always look at your statements or better yet, sign up for online banking so you can keep on top of things.  Ask for a fee schedule so you are fully aware of the limitations (if there are any) on your account.  With a little work on your part, you can minimize (if not eliminate) your banking fees.

If you have considered buying a home but you aren’t sure how much house you can afford, here is a suggestion.  Choose a financial institution that you trust and have them do a preapproval.  It prepares you for when you really are ready to make a serious offer on a home, and many real estate agents ask you to obtain one so they know you are serious about buying.   The main thing, though, is that it gives you an idea of how much you can afford given your current circumstances. Consider buying a home that costs $20000.00 to $30000.00 less than what you are preapproved for.  The result: You will be less likely to find yourself financially stressed down the road should your circumstances change, and you will save a ton of money that you would otherwise have spent on mortgage interest, not to mention higher property taxes, utilities, and maintenance.  Most people don’t regret making the decision to choose a less expensive home and with the economy the way it is right now I don’t think there are too many people saying they wished they had bought bigger homes.  If you choose to use a real estate agent to help you find the right home, and you are planning to pay less than your preapproved amount, you can ask your financial institution to mark your preapproval down to a lower amount so that your real estate agent is less likely to try to pressure you to spend more than you would like.  This seemed to work well for us.  Our real estate agent never knew the amount we really were preapproved for so we felt no pressure from him to pay more than we wanted to.  

Recently with the prime rate being so low, my husband and I decided to change our mortgage from a fixed rate to a variable rate. We still had about 3.5 years remaining on our existing mortgage so we were subject to some hefty penalties. I wouldn’t necessarily recommend doing what we did, although we do hope to recover our penalties and at least save some money in the process. However, if you are planning on buying a home in the near future, you may want to consider choosing a variable rate while the rates are low and then you can always fix the rate later when the prime rate goes up. Whatever you decide, don’t rule out the possibility of a variable rate. Statistics indicate that more than 85% of people who have variable rate mortgages save money. When you visit your mortgage lender, be sure to ask about their variable rate mortgage options. It is better to be fully informed of your options in the beginning rather than wish you had later.