Most financial advice is going to tell you to save versus spend…makes sense, right? But what if you were spending money to pay off debt? The real question then becomes, “Should I save those extra dollars, or should I put them toward my outstanding debt?”
Depending on your devices
Fortunately, in this decade of cell phones, iPads and/or laptops being utilized by most of us, the actual data that will help you answer this question is actually easier to get than ever. Additionally, electronic banking and online access adds a layer of certainty – balances can be viewed in nearly real time!
The availability of apps and online tools is also a game changer. Do you know what a checkbook register is? Do you know how to balance your checkbook? Probably not. Because account balances are updating overnight, and online applications are available for analyzing your data, you can control your deposits and withdrawals without the manual methods of the past.
Use technology
Let technology be your friend and your banking assistant. Take some time to really dive into the tools available on your Heartland bank app or in your online banking via the Heartland website portal. The financial tools are front and center on the home page of both of these access methods, so be sure to investigate the many layers that can offer detailed analysis.
Electronic methods are a good option for researching your current accounts and their specific features. Review your interest rates on loans and accounts, then make note of the current balances and the frequency of your payments. If you have auto-payments set up, remind yourself of the amount you pay each month.
Review Your Research
Once you have your facts and figures, take some time to digest what you have compiled. Initially, the task of what is basically budgeting might seem daunting, but try to approach it from a positive, proactive side. Numbers are hard to dispute, so putting your figures in one organized space could just give you the boost you need to make a plan for your financial future.
If your numbers show that you have more going out to expenses each month than you’re taking in, this is the perfect time to make a few changes. Review those discretionary line items that could be eliminated, like a streaming service or two, then adjust your numbers.
Now, you’ll need to decide whether to put your extra dollars monthly into a savings account or pay down additional debt. This decision can be as easy as reviewing your expenses versus your income (budget!), comparing your APR on your debts with your APY on your savings account, and deciding if you need an emergency fund along with reducing discretionary spending.
“Having an emergency fund on hand is invaluable for financial independence and peace of mind. An emergency fund equates to one month’s expenses, i.e., rent/mortgage, car payment, utilities and food items versus relying on credit. Build your savings up to one (two is ideal) month in reserve and anything over this amount, apply to higher interest debt which in the long term will return more to your pocket. Reducing higher balances, as a percentage of your availability, can also improve your credit score,” said Jeff Ciochetto, SVP, Chief Credit Officer at Heartland.
If your financial picture is still a bit blurry, Heartland bankers are always available to offer advice and provide guidance. Stop in at any one of Heartland’s twenty branches to start building a relationship with a local banker that can last a lifetime!