What financial planners know: making banks work for you

Even if you only have a small amount of spare cash, here are some simple steps you can take to help you save money and make the most of almost any amount.

Bank accounts typically don't offer great interest, but learning how to manage your accounts can help you save and grow what you have.

• It's vital to create a savings fund to cover necessities and protect yourself and your family. Always keep some cash on hand so you can pay regular bills and cope with unexpected expenses.
• Keep an eye on your cash. If your current account starts showing a healthy surplus, shift some of the money into a high-interest savings account to make it work for you. Check out accounts with 30 or 60 days' notice of withdrawal as these often give a higher interest rate.
• Don't go into overdraft. Banks may charge 15 percent interest on an authorized overdraft, but a hefty 30 percent if you don't tell them first. They also charge fees of between $15 to $30 for any cancelled payments.
• Private operators of cash machines may charge up to $3 every time you withdraw your money. Make sure your local ATM isn't stinging you.
• More than 3 out of 4 people who cancel their gym membership or a magazine subscription pay for an extra two months by forgetting to tell their bank. Remember to cancel your direct debits or standing orders the moment you want to stop paying.

When you have a windfall — like bonuses, gifts or cash for extra work — use the rule of thirds.

• One third for the past: use one third to pay off a debt.
• One third for the present: take the second third to make a home or personal improvement you want.
• One third for the future: put the final third into some sort of savings or investment.

Credit cards have plenty of benefits, but there's also some drawbacks. Here's ways to get the most out of credit.

• Don't draw cash on your credit card. Credit card companies begin charging interest immediately, rather than waiting for the standard 20 to 30 days, as with store purchases.
• There are some good no-fee credit cards that reward you with cash rebates on purchases.
• Pay off your mortgage instead of putting spare cash in a savings account. It makes even more sense to pay off credit card and store card debt.

Being smart with your money is a great way to pay off debts, save for the future and have money for the here and now.