By Althea Chang | MainStreet.com

You know you should, but it’s difficult to feed the piggy bank every time you get paid. Luckily, new bank accounts and the power of automatic savings plans may make it easier. And every little bit counts, after all.

Simple Savings
“Saving is a whole lot simpler when you don’t have to think about it,” says a Bank of America marketing campaign (Stock Quote: BAC) for its Keep the Change program. With every purchase you make with your Bank of America check card, your purchase amount is rounded up to the nearest dollar, and the difference is deposited into a savings account. Bank of America also says it will match your savings for the first three months after you enroll in the program and match 5% per year after that, up to $250.

If you have a Wachovia checking account (Stock Quote: WB), you can open a Way2Save account. Each time you make a purchase with your check card, pay a bill online or set up an automatic debit from your checking account, $1 will be transferred from your checking account to your Way2Save account, which gets a guaranteed APY of 5% for the first year, plus they’ll add on 5% of the amount you’ve saved. You can also set up automatic transfers of up to $100 a month, from your checking account to your Way2Save account.

Of course, many banks let you set up automatic transfers from checking to savings accounts online, and APYs may be higher at other banks (Bank of America’s Keep the Change program paid a variable APY of just 0.20% as of Monday). But these accounts could be perfect for those without the discipline to make regular transfers on their own.

Save When You Pay
An online bill pay feature gives you the option to paying bills electronically through automatic withdrawals initiated by your utility, credit card or other company. This is a must if you tend to forget when bills are due. (Those late fees are a killer.)

Just remember, you’ll have to make sure your bank account balance has enough funds to pay the bills when they’re due, or you could be subject to insufficient fund or overdraft fees.

Retirement Savings Under Your Radar
Anyone contributing to a 401(k) knows that contributions taken right out of your paycheck really add up over time, even if the market downturn has taken a chunk out of their balances in the past year. But even if you’re self-employed and contribute to an IRA, you can make automatic contributions as well if you have an account with Fidelity, Schwab (Stock Quote: SCHW) or other financial services companies that offer the feature.

Automatic for the Children
If you have kids and you’ve been making adequate contributions to your retirement savings plans, a 529 plan is a great investment vehicle to help you save for college. And you can schedule periodic automatic payments online. Minimum contributions can be as low as $25, and you may be able to set up automatic deductions from your bank account once every week, month or quarter.

Sometimes the smallest mistakes can make the biggest impact either in your bank account or in your life. However, there are always ways to avoid mistakes. Sometimes you have to makes them once or twice to learn, but afterwords you should find ways to avoid mistakes in order to save you money. The cost of financial mistakes can definitely add up quickly for anyone involved (as we have recently seen with the current economy).

Here are some ways to avoid simple financial mistakes…

#1. Check Your Accounts Regularly – This is one of the best ways to avoid making mistakes with your bank accounts. If you are on top of your spending and savings then you will never have a problem with your bank accounts. If you overspend or overdraw from one of your accounts, there are always consequences. The fees add up extremely quickly so avoiding the mistake of an overdraft will benefit you greatly.

#2. Keep Your Receipts – You should keep all of your receipts at least for a few months. You never know what type of fee or charge that may show up on your credit card later on down the line and you want to ensure that you have your receipts if something does happen. Also, it is such a waste of money to keep an item of clothing even if you don’t want it just because you lost or threw away the receipt. It does not matter how much it cost you, money is money! If you can get it back instead of wasting it, you should!

#3. Keep Track of Monthly Spending – Know how much your bills, loans, payments, etc. are each month in order to keep the right amount of money in your account. Nowadays everyone has direct deposit and withdrawals scheduled from their accounts. Getting rid of the paper trail also means that it is more likely for you to forget what date payments get taken out of your account and not realize that you do not have enough money in your account. This goes along with #1 in that you should always be on top of what is going on. Keep a calendar that tells you when your payments get taken out and how much each one is.

#4. Remember the Checks You Wrote – Since writing checks has almost become a thing of the past, it is easy to forget what checks you have written until they show up in your bank account (especially when people do not cash them right away and wait months instead!). Keep a mental note to yourself or a post-it note next to your computer that reminds you what checks you have written that have not yet gone through. This way you won’t forget every time you check your account and you should ensure that you always have at least the amount of the check left in your checking account.

#5. Don’t be Foolish – Easier said than done right? But honestly, if you do not have the money to spend then resist the urge. Sometimes you need a pick me up, but spending constantly when you really don’t have the funds for it will just run you into the ground and leave you with never ending debt. It is much, much easier to spend the money than to save it, but when things are tough and the financial future of the economy is uncertain, saving might just be your best bet. Spending some of your saved up cash now and then also doesn’t hurt, just spend wisely!

These five tips may help you avoid some financial mistakes that will be costly later on down the road. Just be sure to remember: it is easy to get yourself into debt and financial trouble but much harder to get yourself out of it when times get tough! An ounce of prevention is worth a pound of cure…

Photo by: Ronnie B.

Credit card debt is really hard for many people to get a handle on, so instead they use their debit card where it automatically draws money out of their account and no bill is required. Another reason many people use debit cards is because they automatically assume that the safety and security of their identity is safer on a credit card. However, this may not always be the case. Debit card use continues to grow and soon may even surpass the use of credit cards.

According to The Nilson Report, an industry publication, debit purchases are expected to rise 13% for 2008, bringing the total to around $1.2 trillion. However, credit cards are only expected to rise about 3% to around $1.9 trillion.

Like your credit cards, debit cards need to be treated extremely carefully.

Portable Skimmer
This device allows thieves to clone your debit card taking all of your account information and security codes and passwords. The thing is, that if someone uses a skimmer on your debit card, you may not even realize until several charges have already been made. Whenever your card is out of your sight (i.e. paying for dinner at a restaurant), someone else has the ability to steal your card information. Granted, this does not happen to everyone, but anyone is susceptible.

Reimbursement
Many people assume that a debit card works just like a credit card and if their money and identity is stolen they have a grace period where they are often able to get the money back. However, this is not the case. With debit cards your money is drawn directly from your account and is gone. Banks often deal with debit cards and credit cards completely separately and do not reimburse people for identity theft. Obviously reimbursements depend on your bank and the situation, but just make sure you are clear on the guidelines and how things work with your card before you assume you are going to get your money back if something happens.

Hidden Fees
Every card is different, but some banks charge you for every time you make a debit purchase on your card (meaning that you use your card by entering a pin instead of signing it like a credit card). If you have a choice you should always choose credit (even if you are using a debit card). The reason for this is that some banks charge service fees every time you enter your pin at a store or gas station. The fee may only be $1.50, but think how quickly this can add up. Overdraft fees are another thing you need to look out for as well as ATM fees. If you withdraw money from an ATM that is not your bank, you will get charged by both the bank that owns the ATM and your bank on top of that. As much as you can, use your own banks ATMs to be safe.

Holds
Holds are often done in the travel and hospitality industry. These types of companies want to make sure that they are going to get paid by you so they put a hold on your debit card. This can also be done with rental car companies because they want to ensure the safe return of the car. Companies can hold hundreds of dollars on your account without you realizing. When you do make a purchase, because all of your money is being held you might overdraw from your account and then end up paying fees for this as well. Make sure you keep track of your card, especially if you are spending a lot on a trip, etc. It might be best to put these types of purchases on your credit card and just pay it off right away with the money that is in your debit account. If you were going to put it on your debit card anyway, then using a credit card and paying it off right away shouldn’t make a difference.

Avoid the Internet
If you do not know the retailer, it is best not to use your debit card for online purchases. Again, you won’t be reimbursed for money that you might lose if your purchase never arrives. It is always better to be safe than sorry. Online purchases are typically more risky than purchasing in a store. You don’t want to increase the risk by using your debit card.

The best thing to do is to be aware of your debit card account and transactions that are on it as much as you possibly can. You don’t want your paper bill to arrive in the mail and realize that you have overdrawn your account by a significant amount of money. Also, only use your card at locations where you feel your information is safe. You may not always be able to tell and things do happen, you just want to be prepared.

Photo: Belén