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SYS-CON MEDIA Authors: Elizabeth White, Pat Romanski, Yeshim Deniz, Liz McMillan, Roger Strukhoff

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Financing the Future

Banking in the Millennial Age

MISSION, KS -- (Marketwired) -- 04/18/14 -- (Family Features) Though much is made about millennials and their sense of responsibility (or lack thereof), new research suggests that when it comes to managing their money, this generation takes few risks.

According to the TD Bank Financial Education Survey, 47 percent of millennials (adults ages 18 to 34) described their financial personality as being cautious when it comes to overall personal finance habits. A desire for more information to guide their money decisions was a common theme of the survey.

"Millennials want more support with their personal finances," said Nandita Bakhshi, executive vice president, Retail Distribution and Product, TD Bank. "They recognize that financial education is a key component of financial success, and they need to feel empowered so they become more confident about their financial futures."

According to the TD Bank survey, the majority (69 percent) of this generation has no formal financial education training, such as a class at school, a seminar at a local bank or online courses. When it comes to looking for advice, millennials are relying primarily on banks and their families for answers.

Not surprisingly, this group of tech-savvy individuals uses the tools of online and mobile banking to their advantage. In fact, an overwhelming 88 percent of those surveyed use online banking for executing day-to-day transactions. While technology serves as a huge resource, over half of respondents still use local branches for their banking needs.

"By arming themselves with information, this generation can take steps now to begin developing a sound financial future," Bakhshi said. "Making responsible decisions, learning about the options available to them and taking steps to safeguard their private financial data in this technology age are important aspects of financial responsibility that will pay dividends in the future."

Beyond the Basics
While the majority of millennials feel knowledgeable about basic day-to-day banking products such as checking accounts, there is room to learn about personal finance topics including savings accounts, credit cards and creating a budget. The experts at TD Bank offer the following guidelines to get you started.

Savings account options vary from simple accounts (generally with lower minimum balance requirements, but also lower rates of return) to more sophisticated accounts that reward you with higher interest rates as your balance grows.

  • Understand minimum balance requirements before opening an account.
  • Consider opening a savings account at the same bank as your main checking account. Many banks offer special benefits for having multiple accounts such as lower balance requirements or higher interest rates.
  • Look for accounts that offer low or no maintenance fees or ones that waive the fee as long as you maintain a low minimum balance.
  • Verify whether there are limitations on withdraws (which can be a good way to help ensure that what you earmark for savings stays put, but detrimental if an unexpected situation arises).
  • If you're saving for a particular event or item, inquire about special goal-oriented accounts that generally allow lower balances and can help ensure you reach your target.

Credit cards allow you to borrow money to pay for products or services. The upside is that responsible credit card management can boost your credit score, qualifying you for lower interest rates in the future. However, it is important to avoid getting overextended with debt.

  • Compare costs (the interest rate, as well as charges, such as annual and balance transfer fees) versus rewards. While free is always appealing, remember that modest fees may be worth the expense in exchange for robust mileage or cash-back programs.
  • Check into policies regarding lost cards or stolen identity to understand your accountability if unauthorized charges appear on your account.
  • Confirm payment details, including minimum payment requirements, payment deadlines and the grace period.
  • Commit to always paying on time to avoid late fees and penalties to your credit score, and avoid paying only the minimum to keep your debt low.
  • Keep track of your credit score and report issues immediately.

Budgets may feel restrictive and even overwhelming, but a monthly financial plan can help reduce stress while learning how to better manage your money.

  • First, identify all sources of income and account for all expenses for one month.
  • Avoid the mistake of only budgeting for major bills. Make sure to include monthly expenses such as a rent, groceries or gym memberships.
  • Remember to pay yourself and allocate money for savings.
  • Subtract your total monthly expenses from your monthly income. If you have a surplus, determine how you'll use it (such as devoting more to savings). If the balance is negative, make adjustments to ensure you're living within your means.
  • Once your monthly budget is set, make it a habit of tracking your spending and revisiting your budget every few months to ensure you are staying on track.

Financial Success Begins with You
You may be surprised by how the decisions you make as a young adult affect your long-term financial security. Follow these tips from the experts at TD Bank to lay the foundation for a smart financial future.

  • Live within your means and pay your bills on time.
  • Take the initiative to learn about banking basics such as balancing a checkbook, paying off debt and creating a budget.
  • Begin investing in a 401K as early as possible.
  • Visit your local bank branch and talk to an expert about what products are right for you.

Visit www.tdbank.com/financialeducation for additional tips to get you on the path toward financial success.

The Many Benefits of Mobile
It's easy to see why mobile banking has created quite a following. With the ability to manage money right from your fingertips, mobile apps are designed to serve everyday banking needs with ease. Here are a few of the convenient features these apps offer users anytime, anywhere:

Check Your Balance
View your account balance, pending transactions and history.

Transfer Money
Move money from one account to another without the need to visit a branch facility.

Remote Deposit Capture
Depositing money is a snap. Simply take a picture of a check and then directly deposit it into your account.

Person-to-Person Payments
This service allows you to electronically transfer funds from your account into someone else's account, replacing the need for paper checks.

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