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Sharpen your financial IQ

Personal finance can be a daunting subject for some, but managing your money is important to help ensure your well-being. A good money management plan helps you pay for the necessities and save for the unexpected. Here are some tips that can help. 
 

Simple Personal Finance Tips

Make a Spending Plan

Most people dislike the word budget because it sounds limiting or negative. Instead of a budget, why not develop a spending plan? How are you going to spend your money so you can pay for your needs, put some money aside for emergencies, and still be able to purchase some of your wants?


Here is a helpful spending plan form you can use.
 

Pay Yourself First

Many people find it hard to save money each month. One trick is to “pay yourself first.” This means putting aside money in a Savings Account before you pay any other bills. Develop your Spending Plan based on your monthly income AFTER you subtract the money you set aside for savings.


Direct deposit into a savings account is a great way to accomplish this goal. Have your employer send part of your pay right to a Savings Account before you even see it or miss it. If your employer doesn’t offer direct deposit, set up an automatic transfer to take place every payday from your checking to your savings account. Then make a promise to yourself: You will not touch the money unless a REAL emergency comes along. A sale on big screen TVs is not an emergency, but a car repair might be. By having a Savings Account you will have access to emergency funds when you need them.


Be Careful to Avoid Overdraft Fees

The best way to avoid overdrafts and fees is to keep track of your account balance by entering all checks, debit card purchases, automatic transactions, and ATM withdrawals in your check register, reconcile your checkbook regularly, and manage your finances responsibly. However, if a mistake occurs, Northfield Savings Bank offers several ways to cover overdrafts, all of which include a fee.

Here are some additional tips to avoid overdrawing your account:

  • Sign up for direct deposit
    
Sometimes you just cannot get to the bank. Having direct deposit means your money is automatically sent to the bank, even when you can’t get there yourself.
  • Know when your funds are available
    
Many large checks and some electronic transfers may take a few days to process and become available. Make sure you have enough money available in your account before you spend it.
  • Pay special attention to your electronic transactions

    It’s convenient to have your electric or cable bill automatically paid each month but you need to plan ahead. A good rule of thumb is to make sure you have the funds to cover the transaction in your account a few days before the scheduled payment date.
  • Keep track of your transactions online
    
NSB Online is available 24 hours a day, 7 days a week and can be accessed from a computer, tablet, or mobile device. You can even text a request for your balance or a list of transactions. Accessing this system will help you keep track of your balance and those automatic payments that customers often forget to write down in their register.
  • Keep a cushion in your account
    
Make a promise to yourself to never let your balance fall below $100. This cushion will help protect against small math errors or other unexpected items.
  • Use only NSB, Falcon, or Allpoint ATMs

    You can avoid ATM fees that can add up quickly and could cause you to overdraft. NSB, Falcon and Allpoint ATMs don’t charge NSB customers a transaction fee. ATM locations:
  • Never write post-dated checks
    
Writing a check that you don’t have funds to cover is a bad idea. Most businesses will not hold on to a check. They deposit it and you become liable for the fees if it overdraws your account.
  • Keep an accurate check register and reconcile your account monthly
    
Write down every transaction and check them off when they post to your account. Online banking is great, but sometimes people don’t cash your checks for weeks or even months. Having a register helps you keep track of those missing items.
  • Sometimes the bank makes a mistake

    If, for example, you wrote a check for $10 but the bank takes $100 out of your account, you have a limited amount of time, depending on the type of mistake, to report the error and get a refund. You are entitled to get overdraft fees refunded too, but that takes time. Promptly reconciling your account and notifying the bank of any errors helps protect your rights.

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Get to Know Your Credit Score

A credit report is essentially a “report card” of your credit history, and maintaining a high score is very important. Employers, insurance and utility companies, banks, landlords, cell phone carriers—they all use the report to determine their relationship with you. A bad credit report can cost you money: your insurance rates might be higher; you might be required to provide a large security deposit; you could be disqualified for a dream job or apartment.

Your credit score is made up of:

1. The record of timely payment on loans (35%)
2. The types of debts and the total outstanding balance (30%)
3. The length of credit history (15%) 
4.  New credit (10%)
5. Types of credit used (10%)

Creditors want to determine how much of a risk you are—in other words, how likely you are to repay the money or pay for the service they provided to you. Credit scores help them do that: the higher your score, the less risk they feel you'll be.

Credit scores (usually) range from 340 to 850.  People with a credit score over 700 are typically offered more financing options and better interest rates. Don't be discouraged if your scores are lower, because with a little hard work, a good spending plan and some time, you can improve you credit score. And for those who qualify, Northfield Savings Bank offers a Credit Building Loan that can help you get back on track.

Federal law entitles you to a free copy of your credit report every year. Visit annualcreditreport.com or call 1-877-322-8228 to request a copy of your credit report. For more information about credit reports and credit scores, visit the Federal Trade Commission.