A How-to to Beginning Financial Security

Managing your money is quite the feat, especially when you've got other hectic and stressful things going on in your life. A prime example is that college students are notorious for running up huge credit card bills because they are under the impression that credit cards equal "free money". These mistakes are easily preventable with a little bit of know how. With the help of this guide, you should (hopefully) be able to manage your money more efficiently.

Figure out a simple budget and follow it religiously.
If you want to be successful when it comes to your finances, you'll need a budget. The biggest problem people make is trying to make a fixed budget. Unless you are a salaried worker, your paycheck won't be the same amount every time. Therefore your budget shouldn't be based on fixed amounts. The first step is to subtract your monthly fixed expenses that do not change. This would include anything that comes to the same amount each month such as car payments, house payments, internet, cellular phone bills, etc. Then, do your groceries. Shop wisely. From there, take a percentage out of whatever you feel is comfortable and allot that for personal expenses and "fun money". The remaining balance goes immediately into savings. You want to build your savings up to three times your monthly fixed expenses plus 20% of that amount. This should be your budgeting goal. At first, it will be very hard to following. It should become easier as time goes along, and you find yourself with more money to play with because you are saving more.

Get a checking and savings account and make deposits each paycheck.
Getting a checking or savings account is very simple these days. You don't even have to go to the branch anymore to apply. Most banks offer online application. You'll only have to go to the branch to make your initial deposit. Be sure to shop around. Some banks are giving monetary incentives to those that sign up and hold a positive balance for a set period of time. If you are a college student, be sure to take the student benefits that banks offer. These benefits commonly include free overdraft forgiveness for your first overdraft, no monthly fees or minimums, and discounts at stores and hotels. Remember that some banks have monthly fees. Learn the fee schedule. One mistake especially common with savings accounts is that account holders do not realize that they must deposit a minimum amount of money into the account each month. If they do not deposit that minimum, a fee is charged from the balance until eventually the account's funds are depleted. Some banks such as ING Direct will even pay interest on your deposit for free if you deposit a certain amount. Do your shopping around and choose the account that fits your needs the most.

Pay your bills on time, every time.
Paying your bills on time keeps your creditors/billers happy and it prevents procrastination on your part. Paying your bills on time also keeps your budget completely balanced. Late fees can quickly eat into your savings if you're not careful. Also, some companies may waive the late fee if you always pay your bill on time.

These tips should put you on the fast track to financial security. Change the tips as you please, but try not to stray too far from the original idea. I have used these tips for years and have enjoyed having stable finances. With a little bit of effort, you can too. Good luck!