It’s payday and your direct deposit just hit your bank account.

When it comes to managing your finances and building wealth, first things first, you’ve got to know the basics. Having and knowing what's a checking and savings account is generally the first order of business.

The Breakdown

A checking account is a bank account that one can use to deposit and withdraw money, make frequent expenses, and even use to automate bills. Investopedia says the difference between a savings and checking account is “a checking account allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both.”

Now that you know the difference, below we have a few scenarios of how you’ve probably been using your checking account and how you can replace with alternative solutions to improve those financial habits of yours. 

What You’re Probably Doing: You’re Using it as a Savings Account

The point of a savings account is to save for a specific day, occasion, emergency fund or to just save for money for the future, which means that you shouldn’t have much access to withdraw money from it. Instead, you’re using your checking account as a savings and not distributing your money between accounts to save more.

As a result, all of your money is at your disposal. Before you know it, you’ll spend it all before you pay your first bill.

 What You Should Be Doing:  Open an Actual Savings Account

As an alternative, open a savings account with a high annual percentage yield (APY), which means you’ll earn interest based on how much you deposit into your savings account. According to Bankrate.com, a good APY is between 3 and 5 percent. Make sure when that your direct deposit hits, you’re automating your payments into your savings account that way you won’t forget. However, make sure it is not easily accessible to make withdrawals from your savings. If you feel you don’t have the self-control to not withdraw from your savings, here’s a few reasons why you should keep your checking and savings account at different banks, according to LearnVest. 

What You’re Probably Doing: Writing Checks You Can’t Cash

You’ve probably heard of the quote “don’t write checks you can’t cash” but never fully understood it’s meaning. Simply put: Don’t say, or make promises to do something, if you can’t back it up or come through. Same goes for your finances. You’re writing checks, spending money or making expenses that you and your bank account can’t afford. As a result, you’re putting your account in overdraft. Then your bank will add overdraft fees (depending on the type of account you have) and put your account in a deeper hole than before. You’re also not checking your account as often as you should.

What You Should Be Doing: Monitor Your Checking Account

If you’re going to make purchases, pay your utilities and buy lunch for work every day, it’s only right to keep tabs on your expenses and your checking account. Take the time to survey your account every few days or every time you’re going to make a purchase. Also, double check to see if you there are any unusual purchases.

If you need help taking into account what expenses you have, here are a few apps you can download to stay on track for your financial goals. Keep getting hit with overdraft fees? Sign up for your bank’s overdraft protection. Although on August 17, the Federal Reserve will prohibit banks from charging overdraft protection fees per Bankrate, you keeping and balancing your checking account not only leaves surprise fees out the picture, but it makes you aware of your spending habits. Keep your eyes open for those sneaky service charges, too.

What You’re Probably Doing: You’re Only Using Your Card

Every moment you get you’re swiping. We get it. It’s convenient and easy. But also consider that you may be spending what you might not have.

What You Should Be Doing:  Get Accustomed to Using Cash

Yes, it might be a little old school, but having the cash in hand helps you monitor and take into account how much you’re spending over a period of time. Yes, although you might be dragging your feet to go to the bank to withdraw, make sure you take money out that you’ll need for the week. From your church’s tithes and offerings, gas and lunch to even a few miscellaneous purchases, withdraw $50 to $60 bucks for the week so you won’t overspend and become so dependent on your debit card.