I am really enjoying this month's topic of money-saving. I have found the posts so far to be really interesting and really helpful. Brian, thank you in particular for going out of your way to provide your expertise! Obviously we all do things differently, and in various extremes. But it's great to take bits and pieces from everyone and maybe find a better way to do things. I have been thinking a lot lately about where to keep the money that we use each month, not counting savings. I thought the money market idea was a good one. We actually already do the credit card thing and pay the balance each month, because I love racking up free airline miles. That's how we went on a vacation last month! However, I have found a danger of it to be that you don't have to worry if there's "enough" in the account when you buy something. Therefore, I'm maybe not as careful at the grocery store or other places, because you just swipe the card without thinking about it. I found Claire's method of taking out cash to be smart, but probably not right for me. I'm just a debit/credit card kind of girl. Anyway, I'm playing around with ideas like treating the credit card like a checkbook and pretending there's a certain amount in it, etc, then just keeping a log of what I spend. I'm not sure. Does anyone do something similar to this?
Another question, we have a savings account that draws decent interest, but not nearly as good as the previous one mentioned. I have to admit, I've just been too lazy to switch everything over. Right now, all of our loans, accounts, etc. are through the same bank and it's so easy to do my online banking. How do you switch to one of these high interest accounts, and how hard is it???
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I would check with your bank on a high interest savings account. You might not need to change banks-often they offer a higher rate when you accumulate a certain level and then you just have to follow rules like not falling below a minumum balance. the other thing is you could set up transfers between banks. We do everything online too and we had a bank account at a different bank and once we had it set up that they could talk to each other it wasn't that big of a deal.
In my "family finance" class at Utah State, writing your credit card expenses in a check register is EXACTLY how they taught us to use a credit card! So go for it! I'm not that disciplined and we just try and follow the budget but we're still lazy enough that we're estimating and then often recovering from our over expenditures when needed. But that's what they taught us to do is to write all of your credit expenses down and then you won't spend more than you have coming into the account that pays the credit card. We use our credit card for EVEYRTHING so that we get miles too and love it but it's easy to lose track.
I can't help too much with your questions but just wanted to mention that I log every single dollar I spend. I just write it down in a category, but I'd like to create something in Excel.
There is a website that we LOVE called www.yodlee.com and its basically like the program Quicken online for free. We use it to manage all of our finances and its GREAT because with one click of a button you can see all of your credit card purchases and any transactions in your bank account and it categorizes spending for you and you can see charts of how you've been spending your money and do budget stuff with it--we LOVE it! We check it every day to see how much we've been spending and where our money is going to keep ourselves in line. It's also helped us spot a fraudulent charge on our credit card that we might not have otherwise noticed. AND it gives you reminders to pay bills and basically...we love it.
I don't know that that necessarily answered your question, but its a great money tracking tool and helps us keep our finances organized. It's one of Brian's favorite things in the world.
One note about it...a lot of people are hesitant to use yodlee because it has all of your financial information on one spot on the internet and they're worried about hackers and stuff...but it is VERY secure. In fact, lots of banks and other financial websites use yodlee to help them track their finances and so we feel safe using it.
If you are looking for a high-interest savings account (not a money market), check out HSBC.com. They are the largest bank in the world, and you can transfer money back and forth from your local bank to this online bank with no fees. There is no limit of transactions per month like WAMU or other money markets, and the rates are guaranteed unlike money markets. A Money Market Account is similar to a savings account, but instead of having a fixed rate of interest, its interest rate varies with the current level of market interest rates.
HSBC also has one of the highest interest rates in the nation, I think 3.05% right now, but when we put our money into HSBC a few years ago, it was at 5.5%. We are hoping the rates will go up again soon, but who knows with the economy. Anyway, it is still much better for us to have our savings in HSBC than in our regular bank account that yields .1% APR or whatever. It is pretty simple to set up, so I would definitely recommend it! We just had to fill out an online form, wait a few days for the confirmation in the mail, and it was done! So easy! It is also smart to have your paychecks go directly into your high-interest savings account so that they can collect interest until you need the money to pay off credit cards, bills, etc. We still need toset this up. We have had a great experience with HSBC, and there are other places such as ING.com that you can put your savings in (we transferred out of ING because HSBC's interest rates were better). Good luck and I hope this helps!
Sephanie,
This is Brian again. Here is a list of current money market rates: http://www.bankaholic.com/money-market/ or http://www.mymoneyblog.com/online-savings-accounts-and-comparisons. The second link will provide more detailed info on the banks. As you can see, there is a wide range of account minimums between banks. WAMU's is $1. I used to be with Wells Fargo, but when I had my awakening in college of how terrible they were, I dropped them.
When you decide on a bank, it's really easy to change. You'll electronically link your old account to your new account in order to do the funding. Your new bank will make two random deposits (i.e. a few cents) into your old bank, and you simply have to verify the amounts with the new bank. Once you do that, you're good to go. It's so incredibly simple. WAMU has free bill pay too, but everyone and there dog offers that, so I guess it's no big deal. I really like having a good checking account and a good savings account at the same bank.
As Tiff mentioned above, we love Yodlee.com to track personal finances. It is AWESOME. 6 out of the 10 biggest banks in the country use Yodlee within their own websites. If the big banks can trust the site, I can. I track EVERYTHING on Yodlee. I have about 20 accounts that I track: roth iras, 401ks, comcast account, geico account, checking, savings, etc. It's AWESOME. It takes such little effort to manage your finances. I can't tell you how much I love the site. I've sold pretty much all of my friends and family on the site. If you care to budget, it has budgeting tools. If you care to categorize your expenses, it will do that for you. One word of advice...there is a portion of the site called "dashboard", and that's what I use rather than the traditional home page. I like the display better.
I hope all goes well with your new money market account. I just signed into Yodlee today to see $22 deposited into my account from WAMU. I love free money!!! As Lindsey said, rates were much higher 6 months ago before the Fed started messing with interest rates. Luckily, rates will go back up eventually.
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