So many things can be confusing as you set out on your own. You try to get established as an adult but you still have so many questions. I was a young college student once venturing out on my own alone and in a similar place to where you are right now. Through time, experience, and many valuable lessons along the way I have learned to be successful on my own. Here at Saving Joyfully my goal is to offer tips and insight to help you make the best decisions along each step of your financial journey.
Starting your first checking account
Are you looking to start your first checking account? Get established on your own? Make sure that you are financially sound as you begin on your own? I can help you to get started with a lot of this. As I do I will try to also point you to many great resources along the way. Many of the articles that I share surrounding my own financial journey can provide insight on some financial pitfalls to avoid and some good money moves to consider. Adulting is hard and no one really prepares you for your first time handling many financial situations alone. Some of the toughest can be starting your first checking account, managing your first credit cards, obtaining and managing student loans, buying your first car, and even renting your own place. Our situations are all unique as we each make different decisions based on various factors in our lives. Be patient with yourself, you will make mistakes along this journey but always try your best to make the most informed decisions when possible because your future self will thank you.
So many questions on starting a checking account
As you are starting your first checking account you probably have a lot of questions. This can apply to both first-time checking account owners and even those of us just switching to a different bank or credit union. This is not a simple choice to make it can be a very important decision to make as you select a company to help you protect and manage your financial life. Some banks can honestly be a bad choice when they assign fees to everything and when it is just obvious that they are only in it to make money. You have to be able to trust a bank or credit union that takes care of your money or you are better off without them.
Below I try to answer many different questions on starting your first checking account.
Not all of these questions have simple answers because so much varies from each bank or credit union you could choose to use. I will give the best ab
Can I start a checking account under the age of 18?
A parent or guardian can help you set up your first savings account. A checking account however is different and cannot be started until you are 18 years of age unless it is a joint checking account with an adult over 18 which requires you to be at least 14 years old. Starting a checking account early is an important step in getting yourself established to manage your finances on your own.
At what age should I start my first checking account?
A checking account can be created at 18 years of age. There are many things that a checking account is required for as an adult. Having a checking account is a crucial part of the process of getting your financial life established. You may need a checking account for everything from your first debit card, cell phone plan to your first car insurance plan.
Does it cost to start my first checking account?
Starting a bank account can have fees attached. Do your research before setting up an account so that you know in advance what fees are attached to your new checking account. Look for an account with no monthly fees and low minimum balance fees to get you started. Pay attention to extra fees assigned such as limitations to how many checks you can write or withdrawals you can take.
Do I need a checking account?
Yes, you do need a checking account for many things as an adult. I want to caution you however that with checking accounts just like credit cards you may tend to overspend. Make sure that if you start a checking account you realize that you must have money in your account to cover any charges incurred at all times. Withdrawing money or charging with your debit card without the money in your account to cover it you will end up with high fees assigned called overdraft fees for each purchase made resulting in a negative balance. Being overdrawn even unintentionally can have serious consequences with banks and credit unions resulting in fees that add up before you are even aware.
Familiarize yourself with any account rules or fees assigned to prevent additional charges. Being overdrawn can have serious consequences with some banks and credit unions resulting in fees that just seem to add up continuously before you are even aware.
Do people still use a checkbook register?
Some people continue to use paper tracking methods like a checkbook register. I use this method myself currently and find it easier to keep track of since it is how I have always managed my checking account. If you are younger and more technical I am guessing you may prefer apps such as the apps listed in this post.
Do I need to pay for checks and checkbook registers?
Some banks and credit unions offer replacement checks and checkbook registers free of charge. This is no longer common though and most likely they will provide you with a website where you can order these yourself in the future. You are typically given a set of starter checks when you first sign up and these checks can only be used in specific situations until your normal checks are issued. Over the years I have moved to using automatic withdrawal of a lot of my bills so that I no longer need as many checks anymore.
Do checking accounts have fees?
Some banks have monthly fees, minimum balance fees, and most checking accounts have overdraft fees. It is very rare to find an account that will waive overdraft fees because overdraft fees help keep people from taking advantage of their bank through charges they cannot cover.
Can I have multiple checking accounts?
Yes, you can start multiple checking accounts. You could create a business checking account separate from your personal account if you run a small business.
Are banks or credit unions better?
Both banks and credit unions vary greatly by company and products provided. A smaller local credit union can be a great option for many yet can offer far fewer services than the larger well-known bank.
Credit unions do offer lower fees or better rates in comparison to some banks, but this is not always the case. It truly depends on the company and services offered by each one. Do your research it really pays to know what is offered and what your personal needs require. What works well for you may not work well for others based on their lifestyle
Differences between a bank and a credit union?
A credit union claims to be owned by the members and therefore more member-friendly than a bank. Many banks however excel in great customer service as well. The trick is to find the ones that do and not the ones that are just in it for your money.
Best new checking account for a first timer?
A young person or someone getting their first checking account needs a simple easy to understand account. Something that can offer lower fees, less complicated management of our money, and no limit to accessing their money.
Do I need a checking account at a physical banking location?
Today many banks offer online-only accounts. Many of these banks do not even have an available bank in your area. Although this can be the right choice for some people, I would always choose a bank with a physical location within my city. If I have questions or issues with my account, I want to have the option of going into a facility to discuss and correct it.
Best reasons to choose a local bank /credit union?
A local presence can make you comfortable knowing that you can access your money, speak to a person quickly and in-person. I have found that I am much more comfortable discussing loans or other financial situations with someone knowledgeable at the branch in person before making any decisions.
Do banks and credit unions offer financial services
to help me save more money?
Many banks or credit unions offer vacation and holiday savings accounts and even money market accounts. These can earn you a higher percentage back when you save money every day. Keep in mind however that there can be ways to earn more of a return on your money with investments not offered by banks and credit unions. Depending on your specific situation and the growth that you are looking for going with a financial services company that specializes in investments might be a better fit for you. Also, remember that a lot of the options yielding a higher percentage in return cannot be withdrawn just anytime and have some limitations. Do your research before making any decisions to move your money to any of these types of accounts and ask lots of questions.
Can I share a checking account with someone else?
Many married couples have a joint account under both of their names. My husband and I have separate accounts and have since we got married. We choose to do this in case one account is affected by fraud activity so we are not left with no access to money at all. For details on who an account can be shared with I recommend checking with the bank or credit union that you choose to use for more details on who they allow sharing an account. I also caution against sharing an account with just anyone. If you are not married and even sometimes if you are married this can end up very messy if you split up or lose contact for another reason.
Can my parents add me to their checking account?
This can be done but should not be done by parents to help their children or to allow adult children access to parent's funds. This article from Forbes explains some of the reasons why you do not want to do this. Financially it can result in many complications for both parties that should be avoided.
Why Is Managing Your Checking Account So Important
failing to keep track can lead to overspending
preventing bounced checks
overdraft fees are extremely expensive
keeping an accurate picture of what comes in and goes out can help you cut unnecessary spending
What Is A Bounced Check?
A bounced check is a term for writing a check that cannot be processed by the bank due to a lack of funds.
What Is An Overdraft Fee?
Overdraft fees are fees charged by your bank due to overdraft protection. This happens when you do not have enough money available in your checking account and you either write a check or pay using your debit card for something. A fee is then charged and applied to your account in a set amount by your financial institution.
How Often Should You Balance Your Checkbook?
I recommend balancing your checkbook daily. This has become so much easier with the checking account apps that allow you to manage your account with your phone everywhere you go. I am personally hesitant to link things to my bank account so I would not recommend that personally. I do recommend using apps and resources that allow you to manually track. These keep you more involved in the process and therefore more aware of your financial situation. These actions also decrease the chances of fraud and identity theft that can come with linking your accounts to other websites.
Fraud Monitoring And Early Reporting Of Stolen Identity
A very important reason to keep track of your finances today is to monitor for suspicious activity. If you ever suspect that your bank account has been compromised immediately report this activity to your bank or financial institution. Another important aspect of monitoring for fraud and stolen Identity is checking your credit report.
Read more about obtaining a free credit report here from the Federal trade commission. On their website, you can learn more about how to obtain a report and why it is so important to monitor your credit report occasionally.
Where Can I Get A Free Credit Report?
How Ignoring My Checking Account Hurt My Finances
When I was in college I struggled in this area a lot and never really realized the importance of balancing my account. That is until it was too late. I learned the hard way over and over, as I had to pay expensive overdraft fees for using more than I had.
Financial Implications Of Ignoring Your Account Balance
Just imagine swiping your card for something small at the grocery store and having a $30 overdraft fee charged to your account. Now imagine having this happen one on top of the other as you run your errands in a day. You can easily waste ridiculous amounts of money just by buying a few necessities at the store, filling up your gas tank, and picking up dinner. Oh and don’t forget that automatic withdrawal is set to come out the next day. Your dinner, groceries, gasoline, and that bill has now just cost you $120 extra in fees.
