Ways to make finances simpler
Now that you’re responsible for your own finances, it pays to maintain a good overview. We recommend following developments closely to prevent any surprises. Landsbankinn’s app is always available and you can monitor your finances and tend to all main banking business anytime and anywhere. If you don’t have electronic ID, we encourage you to make an appointment to come see us as soon as you can to set it up.
To begin with, you’ll probably want to at least have a wage account, a payment card and maybe a dedicated savings account, if you’re saving up for something. You can open accounts and apply for payment cards in a matter of minutes in Landsbankinn's app.
Where do you keep your cash?
It’s a good rule to deposit savings to accounts with higher interest rates. It’s easy to open accounts in the app and online banking. You can choose between several savings accounts and different ways to make saving simple by setting savings goals.
It’s important to know the best ways to achieve returns on your savings and to look at all the options, such as deposit accounts, funds or other securities. You don’t have to put all your money in the same place either; in fact, we advise against putting all your eggs in the same basket! Consider investing part of your savings each month in a fund by taking out a subscription in the app or online banking.
What type of payment card best suits your needs?
We have a good selection of cards with different features.
Debit cards are linked to your payment account and amounts are debited directly from the account when you use the card. Debit cards generally carry lower annual fees but transaction fees are charged.
With credit cards, transactions accumulate as a debt which is paid on a monthly basis. Credit cards have higher annual fees than debit cards but no transaction fees. Most credit cards also come with travel insurance and are attached to benefit systems, such as Aukakrónur.
A prepaid card combines the advantages of debit and credit cards. Deposit the amount you'd like to have at your disposal to the card. For these cards, you pay an annual fee instead of transaction fees. The card comes with travel insurance and you can also collect Aukakrónur if you use a pre-paid credit card.
Note that young people ages 18 to 24 years are offered special terms on payment cards with the Bank.
You can add all Landsbankinn cards, debit, credit, pre-paid, Aukakrónur and gift cards to your mobile wallet and use your phone or watch to pay. It’s easy to register a card to Apple Pay or Google Pay through either Landsbankinn’s app or a mobile wallet. Learn more!
Do you want a wage bump?
All wage earners are obligated to pay a part of their wages to mandatory pension. You also have the option of making additional payments to supplementary pension savings. If you pay 2-4% of wages toward supplementary pension, your employer contributes another 2% of wages. This additional pension contribution from the employer is a de facto wage increase you wouldn’t otherwise get. Supplementary pension savings can be used as a down-payment on your first apartment - tax free!
When do you think you’ll buy your first apartment?
It takes most of us quite a while to save up for a down-payment on housing and starting at 18 is absolutely not too early. Starting to set funds aside can be crucial to success and the sooner the better. In most cases, our own savings will have to cover 15% of the purchase price of our first home, and that can be a substantial amount.
As an example, to buy an apartment for ISK 45 million, you’d have to own ISK 6.75 million in own funds. If you have accumulated supplementary pension savings, you can use them towards a down-payment, tax free. When we buy our first home, most of us need to go through a credit assessment and take out a mortgage. It pays to read up on various loan types and debt service (repayment).
What does it mean to borrow money?
It’s always better to save up for purchases, if at all possible. Borrowing money costs money. When you take out a loan, you need to repay it with interest. Borrowing should not be a spurious decision.
We can all end up having difficulties repaying our loans. By maintaining a solid overview of our finances, we reduce the risk of repayment difficulty and delinquencies.
Defaulting on loans can be expensive and delinquencies affect our credit rating and business history, both prerequisites of being able to borrow when we really need to, such as to finance a housing purchase. Take care to maintain a good credit and business history. Honouring financial obligations in a timely fashion and refraining from spending more than we have pays off. Once we stop making timely payment on time, debt can snowball and accumulate quickly.
Budget for fun too
When we’re planning our finances, it’s important to remember to spend some money on fun as well. Even the little things aren’t free. If you keep an eye on what you spend on movies, candy or fuel you’ll see how these small expenses may prevent larger purchases. It’s a good rule to monitor expenses closely and to start saving up for the future now.
Get good advice
You can always make an appointment to come see us, either in a local branch, remote meeting or over the phone. We can review your finances together and answer any questions. Our Customer Service Centre is open all weekdays and you can either call +354 410 4000 or chat with us on landsbankinn.is.
