Most Americans never received formal financial education in high school, and enter college or the workforce without knowing even basic money managing skills. And unlike in high school, even small mistakes with you bank account can cost you serious cash in the real world.
So smarten up! Consider these four tricks employed by savvy money savers at the best banks.
Step 1. Be Willing To Make Sacrifices
You might have scrimped and saved to buy that first car, and no one ever forgets the first time they got behind the wheel. But getting your driver’s license isn’t all it’s cracked up to be. Driving and maintaining a car might give you a sense of independence, but it comes at a high price. Gas, mechanical costs, car insurance, new tires, and even those pine-tree air fresheners add up to big expenses almost over night.
If you decide to forego the car and take public transportation instead, you could save up to $10,000 a year. Come retirement, you could have an extra $250,000 in your bank account, all because you let someone else drive you to work.
Step 2. Speaking Of Retirement…
Whether your employer has a 401K option available or not, putting aside money for the future is absolutely essential. In these uncertain economic times, you can’t count on living on Easy Street when you retire. The best banks will help you invest your savings for future returns.
Members of the extreme early retirement movement advise people to try and save up to 75% of their annual income. While that kind of extreme foresight might be out of reach for the average worker, the more you tuck away for a rainy day, the sooner you can kick back and enjoy your retirement.
Step 3. Know Your Credit Score
There’s no excuse for not knowing your credit score, especially since federal law mandates that every American consumer is entitled to a free credit report annually. A number of online services can provide you with a credit history report; just make sure they don’t stick you with hidden recurring fees (and they will try, we promise).
Step 4. Now, Improve Your Credit Score
Many young people just assume they have a great credit score simply because they have no outstanding debts. In fact, the best way to build up your credit score is to take on new credit and loans (and then pay them back, on time). The frequency with which you apply for new credit counts for 10% of your score. Don’t sign up for sketchy credit cards, but instead try and secure new cards from the best banks in your town.
Once you build up your credit score, you can score yourself the best mortgage rates, banking rates, home equity loans, and everything else you need to finally move into that house on Easy Street. More like this article.