Archive for category Banks
Best use of an hour
So you’re sitting down reading these words that I put together. Seems like a nice relaxing thing to do, but could there be a better use of this time?
If this article prompts you to spend one of the most beneficial hours you’ve ever had, then no. There are only four things that you will do in this hour. Give it a try.
1) Organize your important papers. Things like deeds, mortgages, leases, life insurance details, warrantees and other things. Put them all in one place and anything new that comes in should be put there directly.
2) Start a tax folder. You need your W2, and you won’t get that until January or February, but there are things that should go together to help you get organized for when you do your taxes. Things like the tax preparer’s bill from last year, educational expenses, and receipts from the home depot. With all of these things together in one folder or box, it’ll be much easier to find a spot to put these types of things when you get them. Here is a more complete list if you need one.
3) Start using bill pay at your bank. For more on this check here.
4) Set up a budget. For more on this check here.
OK, so it might have taken you an hour and ten minutes, but I promise that you will be much more prepared for the future. If you haven’t started this list yet, do it. Don’t hesitate.
Multiple savings accounts
We now have 5 savings accounts. We have a rainy day fund, a house down payment fund, a vacation fund, a big purchase account, and a house account. It sure seems like a lot of accounts now that I have typed it, but they each have their own purpose. There is a constant shifting of funds between these savings accounts as things take priority, or get drained down.
It is great to have multiple accounts. There is some time spent maintaining the balances of each, but that is far outweighed by the organization that it allows. Each of these separate buckets creates a bit of formality to deal with when we want to make purchases and this makes it a conscious decision.
With online savings accounts, they are easily set up once you have one, and you can open or close them as you please on the fly. I feel that the more you have, the better, and because of all of the compartmentalization, I find myself really surprised when I take a look at the total of all of the accounts. It’s nice to know that if something were to really go wrong, I could dip into other sections if it was necessary.
If you don’t want to take it to this extreme, you should really have at least two accounts. Start out with a rainy day fund and then once this is at capacity, move some into a account to be used to save up for something. Whether it is a vacation, or a house, it is a good way to keep things apart on paper and in your mind.
Saving money the easy way
Posted by WoB in Banks, Introduction to finance, Savings on June 24, 2009
I’ve talked about this before, but it is really important. There are three ways to get money into a savings account:
> wait until the end of the month, and move any leftovers into savings
> budget in an amount to send over and hopefully stick to it
> deposit a portion of your paycheck directly into savings, or have it automatically taken out electronically
I have found that trying to save money by putting what is left after all of your other expenses never really work. Unless you really have a good budget, as really are able to stick to it, you won’t have much luck using the budgeting technique either.
The best method to really maximize your savings is to have it done for you before you have a chance to even see it hit your checking account. It is much easier to not have to manage you savings process. The more you have saved, the closer you are to financial security. It’s everyone’s goal to be secure financially. If you lose your income, you need a way to pay your bills without relying on credit cards. Your mortgage or rent needs to be paid, along with other monthly expenses. If you have liquid or relatively liquid assets that you can transfer into your checking account during any period of time that you don’t have income, this is where you want to be.
Open a savings account at an online bank (www.ingdirect.com or www.hsbc.com) and have your employer deposit a good chunk of money from each paycheck. If your employer doesn’t offer this, use you online account to set up an auto withdrawal the day after each paycheck clears. As you start to see the money pile up in this account, you will notice a weight being lifted. It has an amazing effect.
Pay your bills online
Can you come up with a reason not to use online bill pay? Maybe you enjoy sticking your return address label onto the envelope they provided to you. Or you like to hide with a stamp the little due date that you wrote in pencil. These are great reasons, but…
Here are my three reasons for using online bill pay: it’s free, simple to use, and way easier than mailing checks by hand. I’m not a fan of buying stamps in the first place, so any time I can minimize my usage of them, I’ll do it. For me now, stamps are reserved for sending Hallmark™ cards to people who I don’t see often.
If you haven’t started paying your bills online, this is the technique. Sign into your banking website, if you haven’t set this up yet, please do. Call your bank and make sure that the bill pay feature will be free. It usually is. If not, switch banks here. Once you have signed in to the site, find the bill pay area. Find out how to add a payee. As each of your bills comes in during the month, log them in with their address and your account numbers. You could do this all at once if you’re motivated. With each new bill that comes in, you should evaluate if the amount you pay changes from month to month. If it doesn’t, make it a recurring payment. Then all you have to do is check the bill when it comes in to see if the amount changed for any reason.
Your bank will do one of two things on your behalf. They will pay the bill online if the other company has this set up, or they will mail off a check to them with your name and account number on it. This is all free. Once you have all of your payees in the system, all you have to do is pile up a few bills and enter the pay date and amount due and let it run. It is much easier than hand writing a check, licking the envelope, sticking $0.44 on it and putting the flag up on your mailbox.
Even better than that is you can count on the system to pay them on time. You can go from the mailbox to your computer, open your bills, enter then with a delayed send date and you’re done. You don’t have to then remember to mail it 5 days before it’s due.
If you really get motivated, online banking, online bill pay and this budget go hand in hand. They will make you much more efficient at managing your finances. I can (almost) guarantee that you will never pay another late fee or overdraft fee again.
Best Bank
Most of you have already chosen a bank by the time you read this post. Banks, for the most part, wouldn’t inspire you to change from your current bank, but I have found one that just might. Charles Schwab decided a few years ago to offer his own checking account. The best features of this account are:
- Free bill pay
- No ATM fees – includes reimbursement of fees paid for off network ATMs
- Prepaid postage for mail in deposits
- Interest – currently around 1%
- No currency exchange fees
- Actual Checks in your hand
So all of this means that you never have to enter a bank again!
Set up your automatic deposit of your paycheck. Pay bills as you already do at your current bank (you’d better do this already, or click here), and relax. If you get a random check for answering some online surveys, or your aunt mailed you out a $10 check for your birthday, throw it into the prepaid envalope and send it in and in three days it’s in your account. If you need to grab $40 cash, go to any ATM and I mean any. Even that dial-up one in the 7-11 that charges a $3 fee. At the end of the month, Charles totals up the fees and makes a deposit. That same day, there is an additional deposit made for the interest accrued for the month. I know, 1% isn’t much, but it is way better than your local BofA and along with all of the other benefits.
Ok, so you’re not ready to get rid of your current account. I hear that. I wasn’t; I had to try it out first. There were a few things that won me over.
- You can transfer money to and from any account and it’s there the next day, even into ING
- While traveling in Mexico I used two ATMs. I was reimbursed for $5.23 in fees that it never even mentioned during the transaction.
- The reason I switched to this account as my primary checking account was that while at a batchelor party, I needed to grab some cash. The fee was $5. I did it, and at the end of the month, the $5 was back in the account. It was painless.
What are you waiting for? Go get your own account. www.schwab.com
Let me know if there is something I forgot, or if there is a better account out there.