Archive for the ‘Saving’ Category:
ING Direct: Awesome Deals for Independence Day!
I praise ING Direct all the time. With their great online savings and checking accounts, easy to use interface, and decent interest rate, it’s not hard to see why.
But I also like ING Direct because they’re always having kickass promotions. As part of the 4th of July festivities, ING Direct is pulling out all the stops with some great offers. What are the deals? Read on:
- Opening an Electric Orange checking account will net you a $76 bonus. This is an even better deal than when I opened mine and received $50.
- Need a mortagage? Receive $776 off closing costs!
- Want to start investing? Get started with a free $76 when you open a Sharebuilder account!
- Last but not least, receive $25 when you open an Orange Savings account and deposit at least $250. I’ll receive $17.76 for referring you. Use the text links below to open this account:
ING Direct Orange Savings Account!
ING Direct Orange Savings Account!
If you receive a message that says the link has already been used, send me a message using the this “Contact” link and I’ll get a link to you ASAP.
For the all the other offers, use this link: ING Direct Indepedence
Happy Saving!
Operation Emergency Fund is Complete!
Finally, after a few months of saving, my initial emergency fund is complete. I decided on an amount of $1000 – a number that I felt was achievable in a short period of time but also large enough to actually be useful in case something unexpected happens.
I feel awesome about this achievement. For the first time, I really feel like I honestly have my finances under control and I’ve accomplished something I’ve wanted to do for a while now. In one word: relief. If I need a new part for my car, I won’t panic. If I need to buy a new Xbox game, I know I can. Just kidding about that last one.
I’m still going to contribute a bit from every paycheck to the emergency fund. I won’t ever consider the e-fund “done”. Can anyone honestly say they only want $1,000, $5,000, $10,000 or even $50,000 in their emergency fund? Bigger is always better. Or so I’ve heard…
But I’ve even more excited about having some cash freed up to save for other goals: upcoming college expenses, study abroad in a couple of years, new car someday, etc. And, of course, I have no problems letting myself spend a bit from each paycheck on fun stuff. Xbox games actually don’t grow on trees, ya know?
Take home lesson: Start that emergency fund. Fund it like it’s your job. Sleep easy.
How Should Irregular and Temporary Income Be Handled?
I hope I haven’t mentioned it too much, but I started working for the Census Bureau in April. The job is definitely temporary – I could be out of work in as little as 3 weeks. Or I might still be working until the end of August. There’s really no way to know for sure and it’s very much a week-to-week type thing.
That leaves the question of how should I mange this temporary and irregular income?
I get paid every week, which is great. But there’s no telling when those checks are going to come to a stop. Plus, I work hourly so my checks aren’t always the same amount. Example: Some weeks I get paid $300.67 while others are $277.49, depending on if I needed to leave a few hours early or something.
Right now, I have 3 primary savings goals: The problem is that the amounts I save are all completely arbitrary. I didn’t decide one day to save 50% of my paycheck for emergencies. I never even realized that $30 a week for Christmas gifts is 10% of my pay. I have no idea if $50 per paycheck for my future laptop is too little, too much, or just right. I just picked numbers out of my head that I thought sounded good and were reasonable based on the goal and time line. Example: $150 for the emergency fund to get it to $1000 really quick. $30 for Christmas because it’s so far away and I only have a few people to buy for. (Special perk of being so young!)
To complicate matters even further, I’ve made some random money from this blog. So far, I’ve received a lump sum of around $500. I’m planning to use about half, maybe more, to pay someone to redesign this website. But once that’s done, what do I do with the leftover money?
Put it in the e-fund for an extra boost? Buy myself something shiny with it? Take an underwater basket weaving class?
Then there’s the whole issue of college. Since college, along with dorm life, is a pretty drastic lifestyle change, I’m positive that I’ll be spending more than usual for the first month or two. So far, I’ve thought about just letting more of my paycheck pile up in my checking account. But I don’t really like my money just sitting somewhere without a purpose. I’m OCD like that…
So what do I do? Do I need to come up with a concrete percentage of my income that I’m going to save (for each specific goal)? Should I just choose overall amounts that I’m comfortable with (until my job is over)?
I’m counting on you, Internets!
10 Lies We’re Told About Money
There’s a lot of misinformation out there about money. The following are statements or attitudes that I hear quite often. They’re all false. Or at least they should be!
1 – You’ll always have a car payment
I’ve heard this exact statement from an older adult. I was really surprised, because it seems to defy common sense. You’re only ALWAYS going to have a car payment if you upgrade to a new car every few years. The interesting thing is that people seem to forget that their first car didn’t require a payment. Think about it – when a typical 16 year old buys a car, it’s usually paid for in cash. No payments or interest required. If you can own a car at 16 free and clear, then it’s logical that you should be able to own a car free and clear at the age of 35.
2 – Everybody has credit card debt, so it’s not a big deal
Actually, not everyone has credit card debt. In fact, most people don’t. The reason why the number quoted when discussing average debt is so high is because those with extreme debt – like a mind blowing $60,000 scattered around 8 cards – drive up the average significantly. Even if everybody did have lots of debt, that doesn’t mean it’s a good thing. You’re still, essentially, paying “the Man”.
3 – Owning a home is always better than renting
All I need to mention is the housing bubble and you’ll see what I mean. I’m going to go ahead and assume (and probably make an a$$ out of myself) that MANY people who bought homes in the early 2000s grossly OVERPAID and would have been much better off RENTING. Even without the housing mess and recession, I caution everybody (especially recent college grads) to think long and hard about buying a house. It’s a gigantic purchase and there are lots of hidden expenses – and not all of them are financial.
4 – Stuff will make you happy
There’s no doubt that we all need certain things – shelter and clothes for example. There are also some luxuries that can make our lives easier and more convenient – like an iPod
5 – Online bank accounts are scams, unsafe, or inconvenient
No, they aren’t. All the ones I use and have heard of are FDIC insured, just like any other bank. Online banks encrypt your information and force you to make strong passwords. Finally, online banking is one of the most convenient things since sliced bread. Day or night, you can transfer money and it’ll be there either instantaneously or within 2 business days. ING Direct will even MAIL a check to someone for you!
6 – There will be time to save later, so go have fun now
This is simply an immature thing to say. You know what group of people want what they want right NOW? Children, that’s who. When exactly is “later”? After high school graduation? After college? After getting married? Life is always going to get in the way of better finances, so we need to stop making excuses and JUST FIX OUR PROBLEMS. I’m young and want to have fun, which requires money. I’m not against spending for fun, but I’m against sacrificing an awesome future for fun. Yes, I’m trying to have my cake AND eat it too. It’s going to be f’ing delicious.
7 – Having expensive and flashy stuff means you’re successful
It’s not too hard to create the appearance of having it all, without actually owning anything. At a nearby school (not mine), there is an Escalade in the parking lot every day of the school week. I’m assuming that it belongs to a teacher. Yet, when I see it, I don’t think “Wow, she must be doing well.” I think “Wow, she must have a huge loan. That sucks.” Granted, she could have budgeted it and can easily afford it. Or maybe her husband makes a good living and just bought it outright. But I don’t think either of those situations is likely.
8 – You can get rich quickly
No, you can’t. The amount of people who got incredible rich overnight is extremely slim. So slim that a diabetic has a better chance of being run over by a truck carrying insulin. Yes, I just made that up. But still, the majority of wealthy people got to where they are by working hard and not being dumb with their money. If you want to be like them, you need to make good decisions and read The Financial Student.
9 – Money is Evil
No, it’s not. You can do horrible things to get money or with money. But money itself is not the problem. Money can, and often does, enhance our lives. Don’t be afraid to become wealthy because money is “evil”.
10 – Money Does Buy Happiness
Yes, I’m sure all of the starving people in the world are thrilled they don’t have any money. They get by just fine as long they have what really matters in life: family and friends. Oh, and a dash of hopelessness. A certain amount of money is simply necessary to have our basic needs met. A certain amount more is “necessary” for luxuries. It is true however that after that point, more money isn’t going to increase the quality of your life much.
A Lesson In Why the Emergency Fund is Completely Kickass
I’ve talked a few times about why an emergency fund is important. And I’ve talked about how awesome ING Direct is as a place to keep your emergency cash – and I swear it’s not because of the sweet bonuses they hand out. Honest.
However, I’ve never had the need to actually use the e-fund. In fact, I hadn’t really funded it that much. I know, outrageous. Here I am preaching and then not practicing it. But hear me out – I wasn’t working from February to April so I had an income of about zero. Now that I’m working for The Fed, I’m saving $150 from each and every weekly paycheck I receive.
The benefits of it have already showed up. I got my oil changed the other day. During the courtesy check, the mechanic noticed that my passenger side sway link bar is toast – it’s not attached to my vehicle. At all.
The repair isn’t very expensive – about $60 bucks for parts and labor, so I’m planning to get it done it done within the next few days. Even better, I have the cash sitting in my emergency fund. Then when I get paid, I’m going to refill the account with $210 – $150 for the normal contribution and $60 to replace what was spent.
Even though the repair was inexpensive this time and I can easily cover it with my regular paycheck, it feels good knowing that my emergency fund is in place for things like this. Next time, which hopefully isn’t for a long long time, the expense could be larger.
Still hustlin’ along to reach $1000 in emergency savings…
ING Direct: What’s Up With Yo’ iPhone App?
I, as basically every other personal finance blogger, use ING Direct as my primary bank for savings. They have a decent, although not great interest rate, a clean and usable website, and great customer support. One of my favorite things about ING Direct though is that they’re one of the original online banks. They started out way back in 2000 and know what they’re doing. That’s why I was disappointed when I went to search for an ING Direct iPhone app.
I wasn’t even sure if they had one, but what I found was actually worse than them not having an app.
The “app” isn’t really an app. All it does is launch the iPhone’s own browser to ING Direct’s mobile site. It doesn’t do anything else – other than take up space on my screen.
In ING Direct’s defense, their mobile site (designed for devices with small screens) is pretty good. The only part I had a problem with was entering my PIN. With ING, you can’t actually type in your number. You have to click on a virtual phone-style numeric keypad. On my iPhone, this wasn’t super easy because my finger covers up about three numbers at the same time.
But still, it’s puzzling why a completely online bank would put out a half-assed “app” to their mostly technologically proficient customers. The Apple App Store has been in business for almost two years now – that’s plenty of time for an Internet focused bank to create a decent application. Even more interesting is that ING Direct knows that it’s crappy. They put a little message in the bottom of the screen that reads “We’ll be launching a new, full app soon.”
What are your thoughts about ING’s useless app? Am I being too hard on the company?
The Art of Paying Yourself First
If there’s one personal finance lesson or skill that everybody should learn as early in life as possible, it’s this one.
The skill? Paying yourself first.
What Is Paying Yourself First About?
Once you enter the Real World, expenses can start to add up. Your parents stop paying for your car insurance, if they were paying it to begin with. Any allowance you were receiving suddenly dries up. But the cell phone bill won’t pay itself. Student loan interest payments are expected to be made.
But the most important obligation is usually forgotten. That obligation is you.
Paying yourself first means that before you pay your phone bill, before you send in a student loan payment, and before you go to the movies with friends, you take part of your paycheck and set it aside to save.
Why Should I Pay Myself First?
1. It makes “you” a priority. You are the most important thing in your life. Your cell phone bill? Not so much. We typically pay for things that are valuable. If you think you are a valuable person, then you should pay yourself first.
2.You get in the habit of saving. Most people use any income they receive in the following order: bills, fun shit, savings. The problem of course is that there’s barely going to be any savings left. After bills are paid, people think “Oh, wow, I’m so responsible. Time to buy the PS3 that I deserve“. The actual order should be: savings, bills, fun shit.
3. It keeps your options open. When you set aside money for you, you build freedom. The freedom to spend a year traveling the world. The freedom to retire with an impressive nest egg. The freedom to not worry about unexpected financial emergencies.
How Do I Pay Myself First?
1. Start putting money away in an emergency fund. Start small if you must. Just add $25 every month. If you sign up for an ING Direct savings account through this page, you’ll receive $25 just for opening the account. That’s free money.
2. Open a Roth IRA. This is a killer place to invest money especially if you’re young because you probably don’t pay much, if any, in taxes. That means that the money you put in a Roth IRA will never be taxed!
3. Contribute to your company’s 401k. This option won’t be available for high school or college students, but many companies offer a 401k plan where they will match your contributions, up to a certain amount or percentage.
By paying yourself first, you setup a strong foundation from which you can make strong and sensible financial decisions.
Do Not Buy Stuff You Cannot Afford
The following is a clip from Saturday Night Live that explains how to spend less than you earn.
This video is simply awesome. If I was in the business of comedy, this is the type of stuff I’d do. Common sense, yet surprisingly uncommon.
Hilarious and true.
Just remember that you save up money before you buy something. You do not buy something because you think you can pay for it later. You pay for it now, if you can. If you cannot, you don’t buy it.
I just prevented you (and myself!) from ever incurring credit card debt.
You’re welcome.
Want $25 Bucks? Just Open a Savings Account from ING Direct
ING Direct is an awesome bank. They have great customer service, an easy to use website, and a decent interest rate. Even better, they offer account opening bonuses. If you use one of the links below (and open the account with at least $250 dollars), you will receive $25 dollars deposited directly into your account. I’ll receive $10 dollars, so it’s a win for everybody.
I have 50 referral invites available. I currently have 10 listed below. As they get used up, I’ll replace them with fresh links.
IMPORTANT
*Please do not use the links below if you are not funding your account with at least $250 dollars. You won’t get the bonus ($25) and you’ll waste a link that someone else could use. Instead, use this link:
IMPORTANT
If you are under 18 you will need to open a joint account with someone who is at least 18 years old. (Your mom or dad would probably be the best choice) This isn’t a big deal, but you’ll need that person’s name, address, and social security number in addition to your own.
ING Direct $25 Savings Account Opening Bonus
ING Direct $25 Savings Account Opening Bonus
Happy Saving!
I’m 18! What Should I Be Doing With My Money?: Saving It For Retirement
Today’s post is a continuation of this week’s series: “I’m 18! What Should I Be Doing With My Money?“
Next up in this series, we’ll tackle what’s probably the last financial issue on your mind. Nonetheless, it’s extremely important:
Retirement!
Yes, I know none of us will be retiring anytime soon. But interestingly, we are the ones who benefit the most by saving. Those who wait to start saving will lose out on THOUSANDS, if not hundreds of thousands, of dollars by not starting as soon as possible.
Just one $2,000 dollar deposit in a Roth IRA (Individual Retirement Account) when you are 18 can grow to over $74,000 dollars by the time you are 65 (assuming an 8% return).
Invest the same amount when you graduate college at 21 and you’ll only have $59,000. Three years of waiting just cost you fourteen-thousand dollars!
Note: You don’t have to deposit $2,000 dollars if you don’t have that much. This is just to illustrate the benefit of starting as soon as possible.
Saving for retirement is easy. You just need to open a Roth IRA (Roth IRAs have numerous tax benefits that make them perfect long-term investing) and contribute money to it. Once it’s there, you can purchase investments like stocks, mutual funds, and index funds. To open the account you just need:
- Your social security number
- Your home address
- Your phone number
- And some money
If it helps, don’t consider this a retirement account. Consider it a freedom or opportunity fund. It’s purpose is to provide you with financial security when you are older and may no longer want to work. It simply gives you options later in life.
If for some reason you desperately need the money in a Roth IRA, you are free to take out whatever you have deposited. You cannot, however, take out your earnings until you are 59 1/2 unless you want to pay a penalty.
You can open a Roth IRA through many different companies and brokerage firms. I chose to open mine at E*TRADE. They don’t have any minimum account balance requirements, which is great for those of us who don’t have a huge cash reserve built up.
Saving for retirement is not something you want to wait around to do. There’s honestly no reason why you can’t open one the day you turn 18. I’m “only” funding my Roth with about $50 bucks, but it’s a start.
If you’d like, you can jump back to the previous post in this series: Learning the Basics of Money Management.
