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8 Banking Tips Millennials Need to Know

As millennials juggle a multitude of responsibilities -- from school, to work, to planning for major life events -- the American Bankers Association is highlighting eight banking tips to help them secure a financially sound future.

With a recent report finding that more than 4 in 10 U.S. millennials say they are “chronically stressed” about money, ABA recommends these eight tips to help them secure a strong financial footing:

  • Go cyber shopping for a bank that fits your style. There are lots of options out there with different advantages. Be selective and get the best prices, services, convenient locations and lowest fees for credit cards, bank accounts and loans.
  • Use bank tech to save without thinking about it. Consider automatic payroll deductions or automatic transfer from checking to savings. Arrange to have a specific amount transferred to your savings account every pay period.
  • Download your bank's mobile app and make some smooth moves. Manage your finances from the palm of your hand. With the click of a button, you can easily make a deposit or access a record of all your recent transactions. Be sure to download the latest updates when they are available.
  • Sign up for e-mail or text alerts. Get up-to-date info, on the go, the way you want it. Ask for an automatic alert when your balance falls below a certain level, or to confirm when certain types of transactions occur, such as online purchases or transactions of more than $500.
  • Use the personal finance tools your bank may offer. Banks offer an array of budgeting tools and resources to help you keep your finances in check. Access these via your bank’s mobile app and website.
  • Expect the unexpected – set up a rainy day fund. The last thing you want to be is stressed when life’s unexpected expenditures come knocking on your door. Set up a secondary checking or savings account for emergencies or link an existing account to your main account as an added layer of protection.
  • Get a head start. Banks play a major role in helping customers prepare for major life events such as buying a house and planning for retirement. Ask your banker how you can get a head start on your first major purchase by establishing credit or about starting a retirement account with a 401(k) from a previous employer.
  • Stay connected with social media. Interact with your bank via social media to get the latest news on products and services, ask bank-related questions, join in on conversations and find links to exclusive bank content. 
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5 Smart Uses for Your Tax Refund

Nearly eight out of 10 U.S. tax filers will receive a federal tax refund in 2015. Smart use of your tax refund can start you on the path to long-term financial security. Instead of going on a spending spree, take a moment to evaluate your financial situation and decide on where those dollars will make the most difference. The American Bankers Association (ABA) recommends the following tips for consumers looking to put their tax refund to good use:

Save for emergencies. Open or add to a high-yield savings account that serves as an “emergency fund.” Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.

Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.

Save for retirement. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Where can you get one? Your bank can help set up an IRA, while a 401(k) is employer-sponsored.

Put it toward a down payment. The biggest challenge that most first-time home buyers face is coming up with enough money for a down payment. If you intend to buy a new home in the near future, putting your tax refund toward the down payment is a smart move.

Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term. If you have more substantial renovations in mind, your bank can help with a home equity line of credit.

 

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Six Tips for Saving Success

America Saves Week is celebrated each year in February, but these tips from the American Bankers Association, America Saves and the American Savings Education Council serve as good year-round reminders about savings strategy. A few small changes can have a big impact on your financial future.

         

  • Set a goal. The first step is to establish a realistic savings goal. Consider your expenses, make a budget and determine how much you can put away each month.
  • Track your spending. Hold yourself to the budget you’ve set by tracking your expenses. Consider using websites that segment your spending so you can easily see what areas, if any, you are going over budget then adjust accordingly.
  • Pay yourself first. Arrange to have a specific amount transferred to your savings account every pay period. If you wait till the end of the month to see what's left over, you are less likely to save.
  • Consult a banker. Stop in and speak with a banker about which package of products and services would best suit your saving needs.
  • Consider investments. For long-term goals, such as saving for a home or retirement, look into bonds, mutual funds, real estate and stocks. 
  • Set up automatic bill pay. Although 97 percent of Americans pay their bills on time, some consumers find themselves paying late fees. Set up automatic bill pay so you’re never paying more than you have to.
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