Decisions about money often feel overwhelming. Most people want to make choices that will strengthen their financial futures, but how to do so isn’t always obvious—especially when you come up against an expensive emergency, for example. Juggling everyday expenses, bills, and savings may feel nearly impossible. Fortunately, the right financial tools could help you prioritize which money moves to make when payday rolls around. Financial products like personal loans and smart bank accounts could make it easier to manage significant expenses without hurting your credit when you make on-time, full payments. Savings accounts like 401(k)s and budgeting apps encourage you to prepare for the future. Read on to learn how to use the tools available to you to make the best possible financial decisions.
1. Personal Loans
When you need money quickly for an emergency, like a critical home or car repair, it may be difficult to determine your best financial option. A personal loan could make sudden or major expenses significantly more manageable. Typically, personal loans allow you to borrow the exact amount you need to bridge a gap in your budget. Some personal loans come with fixed interest rates to make monthly payments easier to plan for. Oftentimes, you can even choose repayment terms, like the period of time to repay, that best suit your financial situation. By breaking down expensive purchases into affordable, predictable installments, you can make necessary purchases without adding any extra stress to your financial situation. Personal loans also offer a way to consolidate debts or pay off high-interest credit cards, providing you financial relief from staggering interest rates. When considering personal loans, be sure to compare APRs and repayment time, and take note of any fees associated with the loan (which should be included in the APR). Finally, making complete, on-time payments throughout your repayment term is critical for setting you up for financial success in the future: it will help you stay on top of your debt rather than turning into a debt spiral, and if your lender reports your payments (and non-payments!) to the credit bureaus, you may grow and maintain a healthy credit score.
2. Automated savings
Setting yourself up for financial success by automating savings is one of the easiest ways to build a rainy day fund or achieve a savings goal for a large purchase. Since most financial advisors recommend saving funds from each paycheck, automating deposits will bolster your savings and promote responsible spending habits. Automated saving tools have become so advanced that many save money for you as you spend it, rounding up to the nearest dollar and putting the difference directly into your savings account. And even more advanced than that, some of these tools utilize AI modeling to analyze your spending patterns and automatically save larger sums of money from each deposit you make and automatically adjust the amount saved based on your account balances. Others can even help you meet a specific goal with a pre-set target date!
3. Smart bank accounts
Speaking of better money management, smart bank accounts are extremely proficient tools for helping people understand their saving and spending habits. Not only do smart bank accounts give you a holistic view and accessibility of your funds through mobile apps, but some give you personalized advice for managing your money. They can even help you avoid late fees and missed payments by automatically paying your bills with money it has set aside in your budget. Further, smart bank accounts often provide you easier access to fraud protection and customer service solutions and even help you budget by assigning categories to money spent toward utilities, entertainment, rent, and other options. When you can securely access your funds from anywhere and move money seamlessly between accounts, making smarter financial decisions becomes second nature.