Are you putting off the idea of getting started with a "grown-up" bank account? Many young people and the underbanked — those who have gotten by for a while without using traditional banking services — are leery of opening an account for many legitimate and personal reasons.
If you are in this position, you can overcome your concerns and have success with banking. Here are five simple steps to get there.
1. Recognize Your Fears
Being anxious over something often has legitimate roots. If you worry that you will overdraw the account, is this because your parents often did so? Do you just have a very limited budget and don't feel you can take the chance? Whatever the cause, the first step to beating it is to recognize that you have a normal concern. The second step is finding a way to work with — not against — your own limitations.
2. Practice With an Account
Getting a bank account doesn't mean you have to use it for everything. Get some practice by opening a free checking account for a specific purpose. You might only want to pay the rent by check each month, for example. Use a bank account to write that check, then balance it and put it away until next month. After a while, you will start to feel more confident and can increase your use.
3. Use Bank Technology
Today's banks offer technology to help you manage your account. You might use the app to check your balance. Or, if you are afraid of overdrafting the account, set an alert that you know will signal you if you get low. Whatever the method, find a part of the online banking process that works for you and take advantage of it.
4. Do Transactions Right Away
The longer a bill sits unpaid or that money sits in your account unused, the more likely you are to get into financial trouble. Solve this problem by doing transactions — like paying bills or transferring money to savings — as soon as possible. The money will be used, bills will be prioritized, and you will know where all your money is.
5. Ramp Up Your Banking
Once you have handled an account on a limited basis, start branching out. Start a savings account to save for a particular goal. Learn about the bank's CD (Certificate of Deposit) savings options, its IRA retirement offerings, or automatic transactions. Don't rush, but make a decision to try them out on a set schedule — perhaps at the start of each new year.
You can beat your worries about participating in the banking system. By understanding your concerns, starting slow, and gradually increasing your usage, you'll soon be a confident, knowledgeable banking client on the way to success.
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