Opening a Bank Account

What is the difference between checking, savings accounts and a credit card? 

Scoops wants to introduce you to the first action in organizing your money: opening a bank account.

While it’s called a bank account, you can use a local bank, a credit union, or an investment bank to open your account. The account is where you will deposit money (e.g.: paychecks, gift checks, cash), as well as make withdrawals when you need cash. Nowadays, you can also open bank accounts online, and complete most of your banking transactions online as well. Yet know you always have the option of walking into the bank and working with real people!

When you open an account at the bank (either checking or savings), you may be offered an ATM card that you can use to withdraw money or use for purchases. It is important to understand that when using a debit ATM card to make purchases, the money is immediately withdrawn from your account. This is different than a credit card; with a credit card you make a purchase and then receive a bill that must be paid about one month later.

Create Your Budget

Having a budget is the most important aspect for balancing saving and spending. The items you purchase and consume such as apps for your phone, quick meals, munchies at drive-thru’s, clothing, gas for your car, and movie tickets all have a cost; having a budget will guide you on how much money you have available to spend on the fun things so you don’t wind up in debt. Take the time to consider all the expenses you incur each month and use this information to create your budget.

Going into the bank to open your first account can feel intimidating. Employees at financial institutions may introduce you to many of the same services and functions as you receive in Silver Spoon. It can be overwhelming to see many different products, rates, and service fees. It’s important to know beforehand what services you need; the employees at the bank can help guide you.

If you are old enough to be opening a bank account, there is a good chance you may be preparing to head off to college soon. By starting to save at an early age, you will be better prepared for the expenses of college, and the annual increase in those costs. Many banks also offer student loans to help pay for college, in addition to loans you might receive from the government. When the time comes to apply for college loans, you will want to compare loan programs and educate yourself on the costs to borrow money and the details of repayment plans. Within a few months of leaving college, you will start paying back those loans so it’s essential to know upfront how much you’ll need to pay back each month once you graduate. Having a solid budget will help you plan and be prepared to make the payments when they come due. Paying your loans on time is a major factor in developing and maintaining your credit score!

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