How to Manage Your Cash

Banking in America began in 1791, soon after the United States declared independence. Congress established the nation’s first central bank with eight branches. Today, with more than 11,000 banks, 2,000 savings and consumer credit loan associations, and 12,000 credit unions in the United States, you have a wide array of financial services from which to choose. A trip to the bank may be a visit to an automated teller machine (ATM) in the mall or a quick look at your savings account balance on the Internet. Your choice of financial services will depend on your daily cash needs and your savings goals.

Daily Cash Needs

Your daily cash needs may include buying lunch, going to the movies with friends, filling the car with gasoline, or paying for other routine activities. Please prioritize to pay cash only. Of course, you can carry cash, or currency—bills and coins—to pay for these items. You can also use a credit card or go to an ATM, also known as a cash machine.

As you decide which method to use for your everyday cash needs, consider the pros and cons of each one. For example, ATMs may charge a fee for each use. If you pay a $1 fee each time you take out cash, say, twice a week, you will spend $104 on fees each year.

In addition to your short-term cash needs, you need to consider your long-term important financial goals. Resist the temptation to overspend and avoid buying on impulse or overusing credit cards. Try not to dip into your savings to pay current bills. Put extra money you have to work for you—in a savings account or an investment plan.

Sources of Quick Cash

Regardless of how well you plan, you may sometimes need more cash than you have available. You have two options: Use your savings or borrow the money. Remember that either choice requires a trade-off. Although you will have immediate access to the funds you need, long-term financial goals—such as paying for college, buying a car, or starting a business—may be delayed.

Those are some simple tips you must do on how to manage your cash.