Hi I’ve recently gotten a part time job and got my first paycheck from them. Before I deposit it, I wanted to know what was best to do.
- Deposit it into my Fafsa checking account I already have at Bank1
- Open a new checking account at Bank1 solely for my paycheck and future paychecks
- Open a new checking account at a new bank for my future paychecks
I asked my parents about this and my dad said to just do #2 and open a new checking at Bank1 while my mom said to do #3 and open it at a different bank
What is a “FAFSA checking account”???
I think the money should go into ONE account because then you’re less likely to overdraw your acct and you’re less likely going to be confused as to which account has the money needed to write a check.
If your bank charges fees you don’t need to be spending money on a second account. You might not even realize that you are paying fees- the bank will just deduct the amount from your account.
Deposit your checks into your existing account and learn to be a smart money manager.
Did you get a refund from financial aid? Is that what you mean by your “FAFSA account”.
I can’t imagine why you would want…or need a second account. Just make sure you keep track of any financial aid money IN that account because it doesn’t count when you file your FAFSA for next year if it’s still there.
If you have money from your earnings…that does count as an asset if in your account.
My suggestion to follow on what’s already been said: figure out some tools to help you document the flow of money. Are you comfortable with spread sheets? Would a paper register be more your style? I sent both of my children off with a copy of money management software on their lap tops. C1 didn’t really start using it until senior year, while C2 seems to have taken to it as a freshman (actually before that). Document the flow of cash in and out, and it will make filling out the FAFSA next year easier. And it’s a start on learning money management skills that will last you a lifetime.
YMMV
If you aren’t spending the financial aid money and want to keep it separate, how about a savings account? It’s easy to keep track of the deposit and if you spend any of that money down. My kids use a credit union so have (required to have) a savings account and then a checking account. Use the checking for day to day transactions and just move any money they need from savings. It’s easy to see the balance when they make a deposit like a FA check, and then to see that that balance never went below that amount so doesn’t need to be included on the FAFSA.
You can have multiple savings accounts that are linked to your checking account. Talk with your bank or credit union about this. Sometimes they are referred to as “club accounts” which refers to an older practice of “Christmas Club” and “Vacation Club” savings whereby people would designate a specific savings account as the place to accumulate money to be spent on those things. Happykid has several club accounts that she has earmarked for specific things she wants to save for.
If you have multiple sub-accounts at your bank or credit union, you can arrange to have your paycheck direct deposited to a different sub-account than where your financial aid money goes. Ask your bank or credit union to give you the correct tracking information to pass on to your employer. Your paycheck doesn’t have to go to a checking account, it can go to a savings account. One of Happykid’s other money tricks, is to have one of her part-time jobs be paid to savings, while the other is paid to checking.
^^ that’s what i’d have my kids do. put your FA loan or refund in savings, your work money in checking. You can tag transfers with a line that says “2018 fall FA refund” or so for your records. Then when you need money, transfer to your checking.
Learn how to do online banking at your bank!! Keep your accounts at the same bank. Why?? - it’s easier to transfer money, and there should be no fees attached to transferring money.
Also - if you use a debit card to pay things out of your checking - keep a low number in the checking, and transfer money over when necessary. Debit cards are magnets for thieves and scams. My kid just had $1000+ stolen from his checking account by using his debit card at Dunkin. My older son had his debit card number hacked at a gas station pump. The banks were very helpful and repaid all money, but from now on both sons keep a small amount in checking and transfer when needed; and they monitor money and activity online.
two bank accounts at two banks is hard.
Note that you can only do 6 transfers/withdrawals from a savings account per month. You can’t use your savings account as a checking account, so put money into savings and move once a week or every other week.