Set Up Your Finances Guide 101; What Accounts Should You Have?

When graduating or getting your financial success started it can be overwhelming as to what accounts you should have. It’s not something your friends are talking about, it’s not something we’re taught in school and it’s definitely not something you’re usually well equipped and ready to take on. After so many people reaching out to me in regards to what accounts they need to have, what to do when you get your first entry-level job or salary and how to set yourself up so your future self thanks you - I decided it was time to put what I personally have done to paper in hopes it helps others.

These are the personal things I have done and I always suggest you do your own research and what works best for you. As I always say, everyone’s finances are different and you need to do your own research before making financial decisions.

Account Breakdowns:

Short Term Success:

1. Checking Account + Immediate savings account

2. Tracking Your Expenses Monthly!!

3. Emergency savings (3-6 months of living expenses put aside)

Long Term Success:

1. Larger savings for future purchases (house, car, emergencies, tuition, etc)

2. Trusty credit card that you can redeem rewards with

3. Start budgeting + saving (your future self will thank you)

Future Success:

1. Retirement - 401k, Roth IRA, etc

2. Investing - Brokerage account, investing in stocks, etc.

3. Building Credit for future big purchases, loans, etc.

The Breakdown (that we all need)

1. Establish your checking account

   1. Have your “home” checking account created and likely with a larger bank versus credit union if that works best for you. For example, I use Chase.

2. Start tracking your expenses

   1. Start tracking your expenses. This will be the best way to decide how much you spend, your income and where you’re overspending. When getting a larger pay increase or salary this is important to do so you don’t start spending your increase income right and left.

      1. Read “How to limit fun spending” when practicing a budget for yourself

3. Emergency Savings

   1. Before you start your larger savings, big purchases or signing up for loans. You should have your emergency savings which consist of 3-6 months of living costs so if anything happened you would be covered!

4. Long Term Savings - APY Savings

   1. Get rewarded better APY interest on your savings than you would in your home bank. For that larger savings pot I would suggest putting it in an APY account versus your banking savings options.

      1. Read more about APY Savings accounts here.

      2. Read “Why you need to set up an auto savings account here”

5. Find your trusty credit card

   1. I always suggest researching a credit card that works for you and can be your main spending payment. Find a card that rewards you for spending such as travel, cash back, grocery benefits, gas benefits or a specific retailer you always shop at. I always view a credit card as something VERY similar to your debit card but you get rewarded and extra time to pay it off.

   2. Read about “The Best Credit Cards For You” here.

6. Build Your Credit

   1. Establishing long and credible credit is something you may not think about until you need it. But when you need it.. trust me you need it. Having established credit is good for getting approved for a loan, new credit cards, buying a house, bigger purchases, apartments, etc.

   2. Read “Understanding Credit 101” here.

7. Retirement

   1. You’re never too young to start thinking about retirement. It’s proven the first 5 years of investing in your retirement could be the difference of hundreds of thousands of dollars you will have by the time you’re 65. Start now no matter what your age is!

   2. Read more about “How You Should Be Saving For Your Future Self” here. Discussing savings, investing and retirement.

8. Investing

   1. Do your own research when investing and what works best for you. Such as long term investing, short term investing, high or low risk, etc.