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Managing Your Cash 101

By Gradspot Dot Com

Q: How should I begin to manage my bank account and finances? – Chris Shore, NYC

A: Now that you have a steady paycheck and financial obligations, it’s time to figure out a way to keep all that money organized. Beyond just making sure you have funds in your account, it’s important to realize that honoring your bills now goes a long way towards building credit in the future. Here are the three steps to stay on top of your finances.


Before you even consider tracking your finances, create a budget. Make sure your cash can support your bling buying sprees.


For your finances, what are the two things you always want to be sure of? One: that you don’t run out of money. And two: that you don’t bounce a check. There are three methods to pull this off.

The first is the old fashion way – keep a simple ledger (eg. checkbook, Excel spreadsheet). Maintain weekly records of cash inflows and outflows (or scheduled ones, such as un-cashed checks and unpaid credit cards), and make sure you have sufficient funds before you pay any bills. You should check with your bank as their online banking tools may contain ledger functionality. At the very least, they should provide daily balances that you can update with pending transactions.

Another method is to purchase a financial management computer program such as Quicken.

And finally, you can use one of the new financial management and planning websites. Check out Mint, Wesabe, and Geezo. They not only track your finances, but they also suggest ways to maximize your funds.

However, keep in mind that these methods won’t pay your bills for you – they’ll only alert you to their presence. Use your bank’s automatic bill-pay for rent and other recurring expenses. If you do, consider overdraft protection to ensure that you’ll never pay a bill when you don’t have the funds. Read about it and other banking features in our banking guide.


Never forget to save – that can mean cutting out an unnecessary monthly charge or depositing $50 a month in a savings account. Try to set a realistic goal and adjust as necessary. After all, this might eventually go towards your first home, or get you out of a jam when budgeting and managing don't work. To learn more, read our guide about the benefits of saving (also known as investing).

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