NT: Official Personal Finances Thread

[capital sb]

I use Barclay. 1.0% APY. I just transfer funds from my checkings over to it. No physical locations -- you may consider that a downside since you can't just walk into a location to handle issues.

I use Barclay also very straight forward easy signup process , great user interface, and very secure. Take a look at their dream account it has very high APY, and it is great for a focused savings account ( saving for vacation, car, trip,house, etc).

I don't think it is a downside to not having a physical bank because, online banking is what gives you a higher APY than physical banks, and it gives you less direct access to the funds which is what you should want for a savings account.

 

[Xennial]

 
With an online savings account, the interest rate will be a lot higher than traditional banks but you're still earning close to nothing. Capital One 360 offers .75% & Ally offers 1%. Just found a bank called Northpointe in Michigan that is offering 5% up to $5000 as long as you swipe your card 15 times during the month and have direct deposit/direct debit. It's not the best interface, but the rate is unbeatable.

I have a credit union for those times when I need to walk into a branch, but have it connected to my online banks so I can easily transfer money back and forth.

wow 5%?  good looking I need to get on that

 

[keel252]

@ creballer

What's a good % to put into a Roth IRA account biweekly. I have a meeting Monday. Wanted to have a idea.

 

[dathbgboy]

I use Barclay. 1.0% APY. I just transfer funds from my checkings over to it. No physical locations -- you may consider that a downside since you can't just walk into a location to handle issues.

I use Barclay also very straight forward easy signup process , great user interface, and very secure. Take a look at their dream account it has very high APY, and it is great for a focused savings account ( saving for vacation, car, trip,house, etc).

I don't think it is a downside to not having a physical bank because, online banking is what gives you a higher APY than physical banks, and it gives you less direct access to the funds which is what you should want for a savings account.

Yea, just checked it out and the Dream account looks right up my alley for my daughter. that potential 5% bonus on top of the 1% is love. She got money sitting in Citizens Bank doing nothing for her.

 

[capital sb]

Yea, just checked it out and the Dream account looks right up my alley for my daughter. that potential 5% bonus on top of the 1% is love. She got money sitting in Citizens Bank doing nothing for her.

Yeah that's exactly what that type of account excels at. Monthly deposit capped at 1K, I would open a regular account to put any extra money in.

I will be opening my dream account soon I already have a regular online savings account with Barclay. Plan to save up my emergency fund in the Dream account. The 5% bonus will force me to contribute and to not make any withdraws. The $1000 cap sucks, but maybe they will raise it one day like they keep raising the APY. 5% APY is still good none the less.

 

[jthagreat]

@ creballer

What's a good % to put into a Roth IRA account biweekly. I have a meeting Monday. Wanted to have a idea.

assuming you are under 55, the max you can give $5500 a year.

 

[unkn0wn]

Just paid off my student loans in June. Now just need to finish paying off my Subie, then Im debt free... until I buy a house 

 

[keel252]

assuming you are under 55, the max you can give $5500 a year.

appreciate it playa.

 

[crcballer55]

@ creballer

What's a good % to put into a Roth IRA account biweekly. I have a meeting Monday. Wanted to have a idea.

Ideally, max it out at $5500/yr. That's about $211 every other week. If your employer matches a 401k, look into doing that first since that's free money.

The more you put in early on, the more it will compound and you'll have once you retire.

 

[keel252]

yea im thinking max with my 401k they do up to 6%

then the 211 to the Roth

250 a to emergency

and 150 to travel.


all bi weekly.


handle my bills and they rest spending cash.

 

[water runs dry]

Thanks for the suggestion. I was looking into Ally, but I'll look into Barclay.

 

[crcballer55]

Can we talk about life insurance for a second? Just had a friend of a friend die from brain cancer yesterday and they're having to set up a Go Fund Me for the burial and other costs. I'm seeing this SO much now and it's pretty sad. Not only do families have to deal with the grief of a loved one, but now there's expenses associated with putting them in the ground and a single parent that has to take care of the kids on one income too.

Life insurance is cheap and something that doesn't get enough press. For a couple hundred per year, you can get several hundred thousand in term coverage that can replace your income and take care of your family while you're gone.

 

[Brownstone]

Not trying to knock anyone who is saving, because doing so alone puts you in rare company. But I really don't see the point of putting money in a standard savings if you are younger than say 40. The risk vs reward of putting that money elsewhere almost always outweighs the .5-1% interest your are getting with your standard savings. I can't tell you the amount of people I see daily who complain to me how they have 200k in a savings not earning interest. Put it into accounts listed on here, nobody should need more than 1-5k in a reserve imo.

 

[crcballer55]

 
Not trying to knock anyone who is saving, because doing so alone puts you in rare company. But I really don't see the point of putting money in a standard savings if you are younger than say 40. The risk vs reward of putting that money elsewhere almost always outweighs the .5-1% interest your are getting with your standard savings. I can't tell you the amount of people I see daily who complain to me how they have 200k in a savings not earning interest. Put it into accounts listed on here, nobody should need more than 1-5k in a reserve imo.

70% of people will experience some type of financial emergency within a 10 year period (job loss, health issues, natural disaster, etc. $200k is probably too rich for most people, but 3-6 months of expenses in a liquid account is wise. Drawing from a retirement account will trigger a 10% penalty plus your tax rate. The stock market is too volatile to keep an emergency fund there. In 2008, when most people would have needed it their accounts were down 50%. Drawing money out then would make it even worse since you're unplugging money that is already down significantly.

An emergency fund is not to make money. It's an insurance policy for when life happens.

 

[Xennial]

70% of people will experience some type of financial emergency within a 10 year period (job loss, health issues, natural disaster, etc. $200k is probably too rich for most people, but 3-6 months of expenses in a liquid account is wise. Drawing from a retirement account will trigger a 10% penalty plus your tax rate. The stock market is too volatile to keep an emergency fund there. In 2008, when most people would have needed it their accounts were down 50%. Drawing money out then would make it even worse since you're unplugging money that is already down significantly.

An emergency fund is not to make money. It's an insurance policy for when life happens.

3-6 months is way too little, I say 9 months to a year

 

[based mod]

1k for emergency funds? Can barely pay a month's rent and utilities with that.

 

[Brownstone]

 
70% of people will experience some type of financial emergency within a 10 year period (job loss, health issues, natural disaster, etc. $200k is probably too rich for most people, but 3-6 months of expenses in a liquid account is wise. Drawing from a retirement account will trigger a 10% penalty plus your tax rate. The stock market is too volatile to keep an emergency fund there. In 2008, when most people would have needed it their accounts were down 50%. Drawing money out then would make it even worse since you're unplugging money that is already down significantly.

An emergency fund is not to make money. It's an insurance policy for when life happens.

Good point.

I still would rather pull from my scott trade account. Capital gains taxes are essentially nothing. 

 

[capital sb]

1k for emergency funds? Can barely pay a month's rent and utilities with that.

Right , 1K really is nothing something happens to your car that 1K is gone another emergency and now you are relying on a CC. I think it is good to have at least 6 months of emergency funds sitting in a high yield account. Storing emergency funds and pulling from a brokerage account doesn't seem wise to me.

 

[antidope]

My life insurance coverage is 4 times my annual salary. If I ever die my family will have money to pay off my loans, my brothers loans, cover my funeral, and whatever else is left. Its dirt cheap too.

I'll be perfectly honest and say that having a liquid savings has been moved down to last on my financial priorities list for the time being. The drastic hike of percentage of funds I allocate to my student loans now meant I had to take from somewhere and while a bit of a cocky mindset, I firmly believe that I have a stable working situation and dont really foresee anything catastrophic occurring.

I have an IRA and 401k that receive monthly contributions however.

 

[water runs dry]

Is there a general rule of thumb when it comes to the amount of savings accounts one is supposed to have? Right now, I just have one. But I'm guessing it's safe to assume you would want to open more than one to help achieve certain goals (car, vacation, down payment, etc.) correct?

Also, a totally separate question. What are CD's good for and for who are they aimed for and when do they actually come in handy?

 

[capital sb]

Is there a general rule of thumb when it comes to the amount of savings accounts one is supposed to have? Right now, I just have one. But I'm guessing it's safe to assume you would want to open more than one to help achieve certain goals (car, vacation, down payment, etc.) correct?

Also, a totally separate question. What are CD's good for and for who are they aimed for and when do they actually come in handy?

IMO I think it it is good to have at least 2 savings accounts. One account you can't easily tap into for an emergency fund such as an online high yield savings account, and a money market account for regular savings. One thing that I have heard is the more money you make/have the more accounts you should open, every dollar should have a purpose.

crcballer55 can explain CDs much better than me, I only know the basics.

 

[Betonblck]

70% of people will experience some type of financial emergency within a 10 year period (job loss, health issues, natural disaster, etc. $200k is probably too rich for most people, but 3-6 months of expenses in a liquid account is wise. Drawing from a retirement account will trigger a 10% penalty plus your tax rate. The stock market is too volatile to keep an emergency fund there. In 2008, when most people would have needed it their accounts were down 50%. Drawing money out then would make it even worse since you're unplugging money that is already down significantly.

An emergency fund is not to make money. It's an insurance policy for when life happens.

3-6 months is way too little, I say 9 months to a year

1 yr is too much $ sitting around not making me money in my opinion.

I like the idea of 3-6 months as your emergency(need cash today) account and the rest invested and earning interest.

1yr of expenses may be like $50k-100k in an emergency fund.

 

[timcity2000]

yeah i keep my emergency fund in an online account. it's enough to cover about 6 months of expenses, which for me is about $12,000 (note: only determine what you absolutely would need on a monthly basis if an emergency happened... rent/mortgage, food, utilities, etc). i think anything beyond 6 months is a little much, and i think most of us could get by with 3, but i'm a worrier so it's worth it haha.

i use smartypig.com btw... .75% APY. pretty user friendly and you can set up "goals" and have money withdrawn automatically.

my only other savings/checking account is with regions. this is where my paychecks are deposited and where my debit card draws from. i use this for day to day purchases. very little money stays in this account. just enough to get me to the next paycheck. after bills/rent, the rest gets put towards mortgage and investments.

 

[Brownstone]

yeah i keep my emergency fund in an online account. it's enough to cover about 6 months of expenses, which for me is about $12,000 (note: only determine what you absolutely would need on a monthly basis if an emergency happened... rent/mortgage, food, utilities, etc). i think anything beyond 6 months is a little much, and i think most of us could get by with 3, but i'm a worrier so it's worth it haha.

i use smartypig.com btw... .75% APY. pretty user friendly and you can set up "goals" and have money withdrawn automatically.

my only other savings/checking account is with regions. this is where my paychecks are deposited and where my debit card draws from. i use this for day to day purchases. very little money stays in this account. just enough to get me to the next paycheck. after bills/rent, the rest gets put towards mortgage and investments.

Agreed.

I feel 3 months would be perfect. Which for me is around 5k.

 

[crcballer55]

 
Is there a general rule of thumb when it comes to the amount of savings accounts one is supposed to have? Right now, I just have one. But I'm guessing it's safe to assume you would want to open more than one to help achieve certain goals (car, vacation, down payment, etc.) correct?

Also, a totally separate question. What are CD's good for and for who are they aimed for and when do they actually come in handy?

I have 1 as an Emergency Fund, 1 for short term savings (once a year expenses), 1 for long term (longer than 1 year, but under 5 years). Then we have one for Summer since my wife doesn't get a check then that earns 3%, but that's a special case...

CD's are geared for risk adverse people looking for a higher yield than savings accounts. It's meant for money you won't need prior to maturity. It's not meant for your emergency fund since there's typically a 3 month penalty or $500 or similar penalty if you withdraw it early.

A lot of people that get CD's are older folks looking for a higher yield, but don't want to put it in something volatile like the stock market. IMO, if you're younger I'd just stick with a savings account since you won't earn much more from a CD. If your time horizon for investing in a goal is more than 5 years put the money in some good index funds.