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Financial advice for young adults entering the work force

1. Identify your short, medium and long-term goals and budget your money accordingly

Your short term goals of less than five years might encompass a wedding, honeymoon, furniture or a new car.  Medium term goals could include the purchase of a home and financing your future children’s college education, followed by long-term retirement goals.  These goals will help you determine how to spend and save your money.

 

2. Build assets through saving at least 3 months of your monthly income

It may be wise to invest in CDs or money market funds for your short term goals and the stock market for your longer term goals.  Historically, the stock market has outperformed other types of investments over comparable time periods, but it’s not for the faint of heart.  You may also want to join a 401K plan if available from your employer or open up an IRA account.

Texas Star Bank can help compound your savings with an account that’s right for you:

  • Certificate of Deposit – Did you know Certificates of Deposit (CDs) can be purchased for as little as $500.00? We offer CDs to individuals who wish to safely invest their money for a given period of time. Our interest rates are very competitive and are determined by the dollar amount you're investing and the length of time you plan to invest your money. CDs are available for different periods of time ranging from 90 days to 5 years. Penalties apply for early withdrawal of funds. Rate changes are made on Tuesdays. 
  • Money Market  – Earn a higher yield of interest with this investment account. This account offers a higher rate than our regular savings account with quick access to your funds when you need it.
  • Individual Retirement Accounts  –  Whether or not you are covered by pension plan at work; an Individual Retirement Account is a smart way to invest in your future. Compliment your checking and savings with an IRA account today. Contributions to most of our IRAs are tax-deferred. See your tax planner for your specific  benefits.   

 

3. Establish an emergency fund

A good guide is to save three to six months worth of living expenses to cover rent or house payments, utilities, car payments, food, transportation and insurance into a separate bank account that could be easily accessed in the case of job loss or uncovered medical expenses.  Don’t use the money for anything else.

Texas Star Bank recommends these accounts for the establishment of your emergency fund:

  • Savings  – Our regular savings account offers competitive quarterly interest and access to your funds with the Texas Star Bank ATM Card. You can get started on the savings road with as little as $100 as your initial deposit, but to avoid a service fee maintain $250 minimum daily balance. You will receive a statement or request e-statements every quarter to keep up with you saving progress.
  • Money Market  – Earn a higher yield of interest with this investment account. This account offers a higher rate than our regular savings account with quick access to your funds when you need it. To avoid a service charge maintain a minimum of $1500. Allowed 6 withdrawals per month and mailed monthly statement or request e-statements.

 

4. Conserve time, money and paper with Texas Star Bank’s convenient Banking Services with online banking, bill pay, e-statements, Star Xpress, and no-charge ATM withdrawals at any of our branches.

You’ll reduce the time it takes to pay your bills and save on the expense of printed paper checks and postage while helping the environment as well.

  • Star Net is our convenient Internet banking.  We understand your need for convenience, so through texasstarbank.com ,you’ll have access to your checking account 24 hours a day, 7 days a week. You will be able to view your current account balance, check your transaction history or transfer funds between accounts. To help with your accounting needs, print statements or search history. Available anywhere you have a computer. Convenience Texas Style!
  • Star Pay With Bill Pay, you can conveniently and securely pay your bills whenever you want. Don’t waste anymore of your valuable time writing checks, stuffing envelopes and searching for stamps. This offers security and control to keep your information safe. Save time and money.
  • Star Xpress  Don’t have a computer handy, access your account information with Star Xpress 24 hours a day by touchtone phone. Make transfers between accounts and make loan payments. Access your checking, savings, certificate of deposits and loans, just a phone call away.
  • E-Statements Sign up for this convenient product. We will notify you by the email you provide that your statement is ready and you can retrieve your statement by a link and  save it to your computer or print it out for your records. Simple, less clutter and best of all free.

 

5. Borrow wisely

Avoid high-interest credit cards and pay off your credit card debt monthly.
Work with Texas Star Bank for your major lending needs including personal and vehicle loans,
Real Estate investment loans, construction loans,  and consolidation loans. Speak with a loan officer to find the right solution.

  • Real Estate loans  –  We offer land and lot loans and can help you build that dream home with a construction interim loan. We also offer financing for Investment property.  
  • Consumer/Installment loans – Have your eye on a new or good used car or maybe planning a vacation, a new home computer or other worthwhile purchases. Regardless of your need, we can help.       
  • Other bank loans  – We offer personal attention and can help with debt consolidation, agricultural loans, recreational vehicles, and personal loans.

6. Understand your credit report

Your financial behavior over the past seven years, including how much credit you have, how long you've had it and whether you pay your bills on time is information included in your credit report. Three credit reporting agencies — Equifax, Trans Union and Experian — maintain these reports, and lenders buy them to help them decide whether to offer you a prequalification.  Your credit report also carries your credit score ranked between 360 and 840 that many lenders use to decide whether you are creditworthy and will repay a loan.  Your credit score can also influence the interest rate you pay.  In many cases, the higher your score, the lower your interest rate.  Your credit score is available from the three credit reporting agencies: 

Equifax –  www.equifax.com
TransUnion –  www.transunion.com
Experian – www.experian.com

TIPS FOR EFFECTIVE FINANCIAL MANAGEMENT

  • Pay off your credit card debt.  It is senseless to pay 13 – 20 percent interest on credit card payments while your savings accounts earn one or two percent.
  • If you cannot pay off your credit card debt, pay more than the minimum payment each month which in some cases will only cover the interest charges.
  • Don’t worry too much about paying off student loans early.  These normally have a much lower interest rate than credit cards.  By making low payments on student loans, you’ll have more money to reduce high-interest credit card debt.

For help determining the best accounts and products for sound and productive money management during your specific Lifestage, please contact a friendly personal banker at 903-482-5234.