At Encore Bank, we encourage you to ask the right questions and receive the right answers about your money. Our bankers are highly intelligent, highly personable, and ready to help you reach your financial goals. For this reason, we asked a few of them what their thoughts were on commonly asked questions regarding managing money.
Fallon Meyer is the Market President at our Charleston, SC location since September 2021! She has been in banking for 11 years.
Miguel Lopez is the Chief Community Outreach Officer. His two-year anniversary at Encore Bank is in March of this year.
Our bankers agree that the best piece of advice they can offer to someone wanting to manage their money is to have a goal or plan. Having a plan helps you work towards something, and looking at your income vs. expenses can be beneficial.
When you look at your income vs expenses, are you running a deficit, or do you have money left over after your bills are paid? If you are running a deficit, you’ll either need to find a way to increase your income or lower your expenses. If you have money left over, you have to decide what to do with what is left; invest it, save it, or spend it. What you do depends on the goals you set for yourself.
For example, Mrs. Meyer and her husband love to travel and they use that as a motivator to work hard and save money. In this case, they spend their leftover income in order to do something they enjoy.
It’s important to remember to not sweat the small stuff. One $5 coffee this week isn’t going to ruin your savings goals, but you have to enjoy it in moderation. Sometimes small motivators, like your weekly coffee, can actually help you stay on track.
Most professional bankers will tell you about the importance of credit and understanding how it works. Whether it’s a credit card, real estate, or another form of credit building, wisely using these tools can help you manage your money.
By maximizing your credit card usage, responsibly, of course, you can take advantage of all the available perks and rewards. Mrs. Meyer makes purchases exclusively on her credit card and has her account set to pay the monthly balance in full when the bill posts. Not only does she get to reap the benefits that come with a rewards credit card, but it is much safer to shop electronically with a credit card versus a debit card.
Professional bankers are regular people, with income, expenses, properties, and investments, so they have to have a way to budget their money, right?
Many of our bankers default to the usage of credit cards and being able to see all of their purchases in one place. Using an idea they apply to commercial clients called working capital cushion, there's a timing gap in credit card usage that is beneficial for building savings and planning out a paycheck. Since you can see all of your purchases on your credit card and have it set to pay the bill in full monthly, you know exactly how much is coming out of your checking account when the bill is posted.
If you’re looking for a more traditional way to track purchases, Mr. Lopez suggests the use of excel spreadsheets to track your income, expenses, and investment. You also use mobile apps like Truebill to track your subscriptions.
If you look this up online it will tell you that about three months of expenses should be in your emergency fund, and our bankers concur. Truthfully though, you should put as much into your savings account as possible. You never know when you need it, and if you do happen to need those three months' worth in an emergency, you won’t have to start completely from scratch. On the other hand, we understand that saving that much isn’t plausible for everyone, so our biggest advice is to save whatever you can. Anything is better than nothing when it comes to an emergency fund.
Sometimes we get too involved in managing our money and feel the need to check our finances every day, especially when mobile apps are so easy to log into. Truthfully, if you’re managing your finances properly, you only need to check your finances once or twice a month depending on how you’re paid and when your bills come out.
Mrs. Meyer checks on her finances just once a month when her larger bills are pending to ensure things like her mortgage, car payments, and utility bills are being paid. Since she knows how much she has going in and out of her bank account, there’s no need to continuously check up on it.
Mr. Lopez has a different approach, checking his finances twice a month when his paycheck comes through. During these checks he makes sure his bills are paid on time and then allocates his disposable income to three separate funds; savings, needs, and wants.
This one’s easy, as soon as you can!
The second you have the income to save from, you should be putting something into a retirement account. If you’re lucky, your employer will be a percent match of everything you put in, but if not, you can still save on your own. If you start taking out 6-12% at that first paycheck before you even see it, you’ll never miss it.
Our bankers are experts in their field, which is why we wanted to get their opinion on some frequently asked questions about money management. Overall, the best advice we can give you is to make sure your income outnumbers your expenses, utilize credit wisely and responsibly, and save as much as you can as soon as you can.