Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

Finance 101: Banking Basics


Finance 101: Investing in your financial future is one of the smartest things you can do. But there is more to building healthy finances than simply stashing away extra cash in your piggy bank. In this article, we cover a wide range of topics to help you learn the basics of finance and help you make educated decisions regarding your financial future.

Checking Accounts

For those new to finance, opening a checking account is a great first step. A checking account enables you to deposit money into an account that can be accessed by writing a check, using your debit card, or withdrawing money from your bank’s automated teller machine (ATM).

The biggest advantage to having a checking account is that it keeps your money safe while allowing you to access it when needed. Unlike cash, if your debit card becomes lost or stolen your bank can put a stop on your account, prohibiting unauthorized users to access your money.

Tips for using a checking account:

  • Keep a running balance of your account to avoid overdrawing your account. Most banks charge an overdraft fee for purchases that are made with insufficient funds.
  • Consider overdraft protection if your bank offers it to you.
  • Familiarize yourself with your account’s minimum balance requirements.

Savings Accounts

A savings account is less accessible than a checking account, as the Federal Reserve limits the number of free transfers or withdrawals you can make from a savings account.

According to Investopedia, “A regular savings account is easy to set up and maintain. You can usually link this type of savings account directly to your checking account at the same bank and quickly and easily move money between the two accounts. Having these two accounts linked can sometimes help you avoid overdraft charges and/or under-the-minimum-balance fees from your checking account.”

Having a savings account can help you set aside money for emergencies and help you save for large purchases, all while earning interest.

Credit

Building and maintaining good credit will provide several advantages to you, including:

  • Lower financing rates
  • More negotiating power
  • Attractive mortgage and refinancing rates
  • Higher credit card limits and rewards

While getting a credit card is a great first step to building your credit, maxing out your credit card, failing to pay your credit card bill on time and only paying your card’s minimum balance each month will end up hurting your credit.

Debt

Many people consider debt to be the dirty word of finance. But most people have at least a little debt, whether it is in the form of a mortgage, car note, credit card balance or student loan. When thinking about debt, is important to remember that not all debt is bad debt.

Good debt helps you generate income and increase your net worth,” according to Investopedia. Some examples of good debt include:

  • Small business ownership
  • Technical or college education
  • Real estate
  • Short-term investing

Bad debt, on the other hand, does nothing to generate extra income or increase your net worth. Examples of bad debt include car loans, credit card balances that are not regularly paid off, and any debt with a high interest rate.

Sometimes you need bad debt temporarily to help bridge a tough financial period, but you should try hard to move away from this type of debt as often as possible.

Get Financial Guidance at First Bank

If you have additional banking questions, First Bank is available in North Carolina and South Carolina to answer questions and help ensure you make educated decisions regarding your finances. Whether you are interested in opening a checking account, savings account or credit card, we will help get you set up on the right foot.

Contact us or find your local First Bank today!


Sources:

Investopedia: http://www.investopedia.com/university/banking/banking7.asp

Investopedia: http://www.investopedia.com/articles/pf/12/good-debt-bad-debt.asp

Trending Topics

Financial Institution: Definition and What to Look For

The definition of a financial institution typically describes an establishment that completes and facilitates monetary transactions, such as loans, mortgages, and deposits. Financial institutions are a place where consumers can…

How to Get a Home Equity Line of Credit

If you are thinking about taking out a loan to finance a major expense, such as home repairs or college tuition, a home equity line of credit (HELOC) or loan…

Small Business Payroll Services

If you’re like many small business owners, it’s likely that you wear many hats and are always on the go. From managing to accounting, there are multiple tasks you have…

Workers’ Compensation Insurance 101

If you’re starting a business and are unsure of the purpose of workers’ compensation insurance or how to acquire it, then you’ve come to the right place. This kind of…

Your Top 5 Tips for Effective Online Money Management

Information on the Internet moves quickly. That’s why First Bank* offers streamlined online money management for individuals and small businesses throughout North Carolina and South Carolina. Accounts can easily be…

Essential Homeowner’s Insurance

Life has the ability to catch us off-guard with unanticipated and costly expenses, such as house damage from a fallen tree or basement pipes bursting during the winter season. That’s…

Enjoy Hassle-Free Online Payment Processing

Businesses need a fast and dependable way to manage client payments, whether online, at the point-of-sale, with an integrated solution, or on wireless or mobile devices. First Bank provides online…

Ways to Influence a Personal Loan Interest Rate

It’s not uncommon for a person to need a personal loan. This money is often acquired to apply it to a home improvement project or to have cash for an immediate…

Find Remodeling Loans in Asheville, NC

First Bank offers remodeling loans in Asheville, NC, for homes or businesses to get you started on turning your vision into a reality. Our Asheville loan officers will work with…

Student Checking Account Asheville NC

First Bank in Asheville, NC, makes it easy for students to manage their funds with Campus Checking, our student checking account. Campus Checking is open to all qualified and currently…