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Top Tips from Your Banker - Tips on Personal Financial Management and Key Financial Stressors

Top Tips from Your Banker - Tips on Personal Financial Management and Key Financial Stressors

To get some timely tips regarding personal financial management, we spoke with Leah Colvin (NMLS# 1118099) , Senior Vice President and Retail Executive for Cadence Bank.

Q: What do you see as the biggest financial stressors facing individuals and families today?

A: Not having adequate savings is by far the biggest stress that many families face today. Research has shown that most American families have less than $1,000 in savings, which is not enough money to pay for many types of unexpected expenses that come up, like home or car repairs. So people in this situation often charge expenses like these on a credit card.

However, this further compounds the problem if they can’t pay the credit card balance in full as interest charges start accumulating on unpaid balances. It can become a vicious cycle because trying to pay off large credit card balances makes it even harder to put any savings aside.

Q: So what is your number one piece of advice when it comes to saving more money?

A: The best way to increase savings is to pay yourself first by making saving automatic. Cadence Bank’s Propel Savings account is designed to do just this by automatically transferring a certain amount of money every month from a checking to a savings account. The minimum transfer amount is just $25, which makes it easy for many people to get started saving.

Q: Talk about the difference between saving for short-term purposes like making unexpected home or car repairs versus saving for long-term purposes like retirement.

A: We generally advise clients to establish a short-term liquid savings account to cover these kinds of unexpected expenses — sometimes this is called a “rainy day” savings account. Many financial experts recommend accumulating up to three months worth of living expenses in this account to cover expenses in case of a job loss or other interruption in income. However, don’t let this number intimidate you: Start out saving as much as you can and let your savings grow over time.

In addition, we also advise clients to save for long-term purposes like retirement by contributing to a retirement plan at their workplace, such as a 401(k) plan, or setting up an Individual Retirement Account (IRA) if they don’t have access to a workplace retirement plan. The same principle of paying yourself first applies here: Have a certain amount of money automatically transferred from a checking account into your retirement account each month.

If your employer matches your 401(k) contributions, it’s even more important to participate in the plan. Not doing so is like leaving free money on the table.

Q: What are your top three tips for achieving financial success?

A: My first tip is to save more money, as we’ve discussed. The corollary to this is to spend your money wisely. One tip here is to carry cash to pay for everyday purchases instead of using a debit or credit card. People sometimes tend to be more careful with spending when they hand over cash instead of a piece of plastic.

Another success tip is to create a household budget and then stick to it. This is also a good way to save more money because you can include short- and long-term savings in your monthly budget. Start with your fixed monthly expenses — things like your mortgage or rent, utilities, groceries, and insurance. Then you can add discretionary items, such as eating out and other entertainment, if there’s enough money left over. If there isn’t, you should resist the urge to pay for these using a credit card.

The Cadence TotalMoney tool within the Fluent by Cadence mobile and online banking application is a helpful budgeting tool. It enables you to view spending by category, like groceries, gas and restaurants, while categorizing and organizing spending from various financial accounts. Cadence TotalMoney offers a comprehensive overview that provides a clear financial picture on a yearly, monthly, weekly or even daily basis.

More Top Tips From Your Banker

Read more helpful tips and advice for managing your money at Cadence Bank’s Fresh Insights Portal.

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

 


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