Equity Finance » Personal Savings

Maximizing Your Savings Returns

admin — Sat, 28 Nov 2009 14:10:54 +0000

Now that you have found some extra money each month, what should you do with it? Don’t bury it in a coffee can out in the back yard or hide it underneath your mattress; begin searching for banks that will work hard for you.

Start out locally, with a bank that you perhaps already have a relationship with. See what kind of savings accounts they have, and what kind of special bonuses they offer. Sometimes a bank will offer a higher interest rate for an introductory period; sometimes they offer a higher one if you keep a minimum balance. Each bank is different, but the bottom line is always the same; look for the highest percentage rate for your money. The higher the percentage rate the more money you will generate.

How can you make money just by having it sit in a savings account? Well, banks need money for other loans. Basically, banks collect money from customers of various accounts, and they use that money to make loans for other customers. Don’t panic, your money is insured so that if you need it, you can withdraw it without any problems, that’s what the FDIC does. The FDIC insures that you will get your money if your bank goes under. As an incentive for you to give a bank your money, they offer interest rates that pay you a set amount of interest on your money over a specified time limit. Some banks pay by the month, quarter, or year, and your interest rate may fluctuate over that time period or it may stay fixed; this all depends on the policy of your bank.

With all that said, how do you find a bank that will pump up your investment? Start doing your homework. Find out what percentage rates banks in your area are offering. Once you know that number, you can start looking into the finer points; how often does the account accrue that interest? How often does it pay out? Do you need to keep a minimum balance? What happens if you drop below the mandatory minimum balance? All of these questions can be answered by a banker in person or over the telephone. Bank websites are good places to get general information and make your initial inquiries, but when it really comes down the wire, personal service when getting all of the details is of the utmost importance.

Find out how to get the best possible deal from the bank you choose. Some banks offer different types of savings accounts, and your banker can help you choose which one is right for you. Some banks offer high yield savings accounts; these normally pay out a higher percentage rate, but only if you make a substantial initial deposit (sometimes $10,000 or more), keep a high balance over time, don’t withdraw from the account frequently, or give them your other banking business (such as checking accounts or mortgages). Other accounts do not have a required minimum deposit or a required minimum balance, and they may not regulate withdrawals. All of these things need to be taken into consideration when you decide how best to grow your money.

Research, take your time, and choose a bank that will work for you. This is the best way to cultivate your savings.

By: Nicholas Hunt

Saving Money Tips – Know Where Your Money Goes

admin — Fri, 27 Nov 2009 23:18:50 +0000

Do you earn a good income and at the end of the year ask yourself “Where did all my money go?”. I can see you sitting there nodding right now. You can take comfort in knowing that you are not alone as this is a very common puzzle for people. “Where does my money go?

So where does all your money go? Surely you can’t have spent it all …. or have you?

The trick to being successful with your money is to have control over your money. To do this you have to know where it is going. If you don’t keep an eye on it, it will run away and disappear into a black hole. There are holes in your wallets and purses that you probably just can’t image being there. You have to treat each piece of money like a piece of gold that you don’t want to let go of.

Here are some clues for you to consider so you can start to keep an eye on where your money goes

1. Try and identify what portion of your money is going on fixed expenses (such as bills and loan repayments) and what portion of your money is going on lifestyle / discretionary spending (such as groceries, entertainment, eating out, clothes)

Note down the expenses that you have to meet; such as bills, rent, mortgage payment, loan repayments etc Note down the expenses that are nice to have but aren’t absolutely critical. We will call these lifestyle / discretionary expenses (such as groceries, entertainment, eating out, clothes). How much of your money is being spent on lifestyle / discretionary expenses? (Lifestyle / discretionary spending is the area where most of the runaway money escapes from). How do your lifestyle / discretionary expenses compare to the money you are spending on fixed expenses / bills? Look for ways to reduce your lifestyle / discretionary expenses

2. Spend the time doing up a proper budget which will look at your likely future income and expenses

A budget should be a thorough record of all of your expenses across all areas such as fixed bills / commitments and lifestyle / discretionary expenses Ensure your budget is realistic and achievable Limit what you spend on lifestyle / discretionary expenses as this is optional spending and an area that you can get carried away on Allocate money in your budget for all foreseeable expenses and set some money aside for emergencies Don’t forget to provide money for items such as replacement of capital items such as buying whitegoods, repairs / renovations to your home In your budget put a portion of your money aside for savings In your budget include provision for funds to meet any goals If your budget runs into negative / deficit, then you will need to cut down your lifestyle / discretionary expenses or other optional spending until you reach at least a break even point

3. Look at your money habits

Try and identify particular times where you might be a bit frivolous

When you are in a particular mood When you have occasion to celebrate When it is someone’s birthday During particular times of the year Over festive seasons – Xmas / Easter When on holiday / away for weekends Out with certain friends / family members

Think about your pattern of spending

Do you spend first and deal with the consequences later? Do you shop around for a bargain? Do you stop and think / sleep on it overnight before rushing into a purchase? Do you ask for discounts off standard prices

4. Start to keep a record of what you are spending

Carry around a little note book and make a conscious effort to record what you spend cash / money on over a period of time Fill in your notebook on a daily basis updating it as you spend cash / money Review your notebook at the end of the day / week Keep all your receipts and dockets in one central place Use a spreadsheet to track your expenses and bills Track your total expenses over a week, fortnight, month Really keep an eye on your cash as this is what will vanish – you break into a $50 and before you know it you have coins rattling around in your wallet / purse Analyse what you have recorded and try and identify particular patterns / habits Make a particular note of any areas you are overspending Don’t stop doing this until you can say with confidence that you know where your money is going

5. Look for ways to stop the leakage such as

Following your budget Using money jars / envelopes for different expenses such as groceries, eating out, hairdressing, clothes etc Using separate bank accounts for different purposes such as bills, lifestyle, holiday, savings etc Setting up automatic transfers to distribute your pay to separate accounts for different purposes such as bills, lifestyle, holiday, savings etc Giving yourself a set allocation for lifestyle / discretionary expenses each week Being strong and if you spend all your money one week waiting it out until the following week Paying cash for items and not using credit / debt Limiting the purchases on credit cards

6. Remove access to temptations

Take the credit card from the wallet / purse Reduce the limit on the credit card Only keep minimal funds in accounts with debit card access Don’t draw out large amounts of cash and keep it in your purse / wallet Stop access to any savings account via debit cards Remove some accounts from internet banking access Have your savings account with a different bank so you can’t get internet access to it and put the money in your spending account

By: Heather A Wood

Saving Money in 2009

admin — Fri, 27 Nov 2009 11:37:10 +0000

With the Federal Reserve lowering interest rates at the end of 2008, 2009 will be a tough year on people looking to save money. When the Federal Reserve Bank lowers interest rates, it is great for people looking to borrow money. However, these lower rates also translate into lower interest rates for savings account, checking accounts and certificates of deposits.

These lower interest rates are going to make it very difficult for people looking to earn the most interest on their savings. Recently, online banks with high yield savings accounts like ING Direct and Emigrant Direct Bank have already lowered their interest rates. Banks and credit unions around the country have been lower their savings account rates as they can borrow money from the Federal Reserve or other banks for lower interest than they had to pay earlier in 2008.

Lower interest rates are not limited to savings accounts. We are seeing banks lowering their CD rates too.

These lower bank rates are going to make it very difficult for savers to earn money on their savings in 2009. In order for you to earn the most money you can on your savings.

These lower bank interest rates come at a bad time for individuals. Many people are moving money out of the stock market into bank accounts due to the market volatility. Additionally, as unemployment rises and more and more people are being layed off work, people need to save emergency funds more than ever. Typically, people save their emergency funds in high yield savings accounts and certificates of deposits.

You will have to do your research in 2009 to find the best bank interest rates for your savings.

By: Fred Peters

Four Practical Military Money Tips

admin — Thu, 26 Nov 2009 09:22:18 +0000

In an age when foreclosures are at a record pace, credit card debt is hitting new highs and personal savings are at an all time low, thousands of America’s military are worried about their financial future as they defend our Country. Many turn to payday lenders with high fees and interest rates to solve their immediate financial needs.

Financial education – a skill young people desperately need – isn’t taught in high schools. So for many military personnel, they enter the military without any knowledge on how to handle their finances. This can lead to financial problems and military debt since it’s the first time many of them have to make financial decisions for themselves.

This lack of financial education is evident in a recent Associated Press report stating that thousands of U.S. troops are being banned from serving overseas because they are deep in debt. Because of this high level of debt they are considered security risks. On top of that, many unscrupulous payday lenders are taking unfair advantage of many members of the military by charging them fees and interest rates that make it almost impossible for them to get out of the hole.

You can become financially secure in the military with some simple steps. The tips below will put you on the path to financial freedom.

1. Cut your expenses. To afford the items you would like to purchase, start by listing everything that you want to buy in the order you want to buy them. This will help you focus your spending on the things you want the most.

To avoid wasting money, keep track of your daily expenses for a month. Find out where you spend your money by writing down everything you purchase. If you’re spending four dollars on a cup of coffee during the week that adds up to more that $1,000 a year. You’ll find out quickly that those small purchase add up fast.

Develop a military budget by writing down your take home pay and listing your current expenses. If you’re spending more than you make, it’s time to cut those expenses or work extra hard to get that promotion.

2. Create a savings plan. The average American spends more than they earn, so become a money rebel and save money. With a simple investment plan, just by saving $250 a month starting at age 18, you could reach millionaire status by age 40.

Get in the habit of paying yourself first. Have your bank automatically transfer a portion of your money from a checking account to a savings account or start an allotment directly to your savings account. Each time you deposit your paycheck, money is automatically transferred into your savings before you have a chance to spend it. That way you’ll have military money set aside for the long-term and available for the things you want to buy now.

Many of you are serving the country overseas now in hostile territory and earning hostile fire and imminent danger pay. You’ll find this is an ideal way to keep more money in your pocket. Take advantage of the military programs such as TSP (Thrift Savings Plan) and SDP (Savings Deposit Program) that allow you to save military money and earn a higher return when compared with most civilian savings accounts. By simply setting that military money aside, it will help you to have money in the bank and a way to treat yourself when your return for a job well done.

3. Have the government buy your home. You can become a homeowner using the benefits the military offers. VA loans allow you to borrow 100% of the purchase price which means you won’t need money for a down payment in most cases. Combine that with BAH (Basic Allowance for Housing) for civilian housing and you can have your mortgage payments paid for.

This is a huge benefit because you purchase a $100,000 home your property could be valued at over $570,000 in 30 years. The best part is using BAH you could of not even made a payment with your own money.

4. Invest in yourself. The military offers education benefits through the G.I. Bill, VEAP (Veterans Educational Assistance Program), LRP (Loan Repayment Programs) and TA (Tuition Assistance) may all help you to get a higher education. Just like in the civilian world the higher education you receive the more likely you are to get promoted and paid more.

You defend this country to protect the freedom of all American’s; and you deserve to be financially free to live the lifestyle you want without having to worry about military debt. The tips above will help you avoid the shackles of life long debt and put you on the road to financial freedom.

By: Vince Shorb

Health Savings Accounts Explained

admin — Wed, 25 Nov 2009 15:16:29 +0000

One thing is certain with healthcare: premiums continue to climb higher.

As a result, more employees may find that health-savings accounts (HSA) have been added to their benefits packets this year, in some cases replacing HMO and PPO offerings.

HSAs are tax-free accounts tied to an insurance policy with a high deductible of $1,250 for an individual and $2,500 for a family. After the deductible is reached, policy holders receive comprehensive coverage.

To ease the burden of those out-of-pocket costs, participants can contribute, pre-tax, up to $2,650 for an individual and $5,250 for a family into an HSA. Withdrawals from HSAs are tax-free as long as they are used for medical purposes.

Unspent HSA money automatically rolls year to year and those funds can either earn interest or be invested into participating mutual funds for greater returns – potentially building a tax-free nest egg for healthcare costs.

Consider it the 401(k) plan for healthcare

Victoria Craig Bunce, director of research and policy at the Council for Affordable Health Insurance, said employers can save between 25 percent and 30 percent on health premiums by switching to an HSA. Those savings usually translate into lower premiums for employees – savings that employees can use to maximize their health savings accounts.

A study by Mellon Human Resources and Investor Solutions in May indicated that 7 percent of the over 360 employers surveyed already offer HSA plans to employees and 32 percent plan to offer them in 2006.

While it sounds like a win-win for both employers and employees, it’s still a hard sell for some companies. With some current healthcare deductibles as low as $150, employees may get put off by HSA’s much higher ones. And there’s something disconcerting about paying the entire cost of a doctor’s visit up-front, rather than the standard $15 or $20 co-pay.

David Bauer, past chairman of the Independent Insurance Agents and Brokers of New York, said in New York, many carriers have filed HSA offerings but despite interest from employers, clients are still cautious about signing up for these products.

“With these high deductibles, employers are skeptical about HSA renewal the following year,” he said.

He added that the perception that HSAs are for the “healthy and wealthy,” rather than the average wage earner, is also proving to be a hurdle for early adoption.

Wave of the future

But advocates insist that HSAs, which only became available in January 2004, are the wave of the future.

“It’s common that people are afraid of change,” said Dr. Stephen Neeleman, chief executive of HSA provider HealthEquity, and co-author of The Complete HSA Guidebook. “In 1981, when people began opting for 401(k) plans from traditional pension plans, we saw slower adoption.”

Neeleman added that of the 800 businesses HealthEquity services, over 90 percent of employers also contribute a portion of their cost savings towards partially funding high deductibles – making HSAs an increasingly attractive option.

Consumers may also want to consider the extra control they have over the type of healthcare they receive through an HSA, said Tom Richards, senior vice president of products at CIGNA.

HSA participants are no longer bound by referrals to receive medical care and, in some cases, physicians are willing to negotiate lower prices for up-front payment because it saves them the trouble of dealing with insurance companies.

Richards added that HSAs are also appealing because of their portability – if an employee leaves his company, he can transfer the funds to his new company’s HSA. Considering the benefits, CIGNA expects overall consumer driven plans to account for 3 percent to 5 percent of its market next year, he said.

Not for everyone

HSAs, however, aren’t for everyone. It’s generally a good idea to sit with a financial planner to see if the savings really do add up. Keep in mind that while savings are accumulating in the first year, if there is a sudden expensive health emergency, you may not necessarily have the funds to cover it in your HSA. That mean you’re responsible for those out-of-pockets costs.

But analysts expect HSAs to become an increasingly common choice for employers.

Peter Delano, senior analyst at research and consulting firm Tower Group said that HSA assets will reach between $10 billion to $26 billion by the end of 2010. Just don’t expect traditional healthcare plans to fall by the wayside, he said.

By: Tushar Mathur

Free Savings Banking Account – Choose From A Plethora Of Services

admin — Wed, 25 Nov 2009 11:55:32 +0000

A free savings banking account is a zero balance savings account. The greatest advantage of having such an account is that it saves you from the hassle of maintaining the average quarterly balance. All you have to do is to simply pay a small annual fee and you can enjoy a host of free benefits and services. The wide array of advantages include International Debit Card, Payable at Par Cheque Book, Insurance, Internet Banking, Any Branch Banking, Family Account facility, Phone Banking, Mobile Banking, Electronic Funds Transfer, Statement of account by e-mail, and Utility Bill Payments.

You can use your debit card offered by your free savings banking account to access your account at any of the ATMs of your bank. With this debit card, you can perform a range of transactions, including balance enquiry, cash or check deposit, cash withdrawal, print or view mini-statement, fast withdrawal of cash on default account, pin change, check book request, statement of account request, funds transfer, and even mobile recharge.

Electronic Funds Transfer facility, offered by your free savings banking account, is a powerful funds transfer product through electronic means. Using this facility, you can transfer funds from your free savings banking account to any other bank account directly by electronic means without the use of

physical instruments such as cheque, demand drafts, or pay orders. Most banks offer this facility free of cost. However, you can also find many other banks that charge a certain amount of fee against this service.

By: John Gutenburg

Saving Money From Income – Are You a Saver Or Spender?

admin — Sun, 22 Nov 2009 01:52:44 +0000

It certainly looks all doom and gloom at the moment doesn’t it?

Open any newspaper or tune into the news on TV and if you are anything like me, you get punch drunk with all the articles on how bad the stock market or property market is etc etc.

It may seem perverse then to write an article on savings!

However, as ever, this is an immensely important subject that affects our clients’ future security. As we view a Doctor or Dentist’s financial affairs over at least 15/20 years, we can clearly see the effect this has on their overall position.

Quite often the savings and investments they made in the early years were fairly modest, but have now built up very nicely thank you over time. This helps massively towards their ‘Financial Independence Day’- the time they can choose to stop working.

Because the service we offer to our clients includes being able to look ahead at how their lives will look in, say, 15 years time (by using cash flow forecasts), we can show how much they need to save/invest NOW so that they do not run out of money in the future.

So, looking at the big picture, are we Brits serious savers?

Well, we certainly used to be. It took some time to recover from the war, but by the mid 1950s, we started to make real progress.

Here is the average UK savings ratio for 1960-1989:

60’s – 5.65%

70’s – 7.95%

80’s – 8.65%

The peak came in the difficult winter of 1979, when the savings ratio hit an all-time high of 14.1%, or to put it another way, one in seven pounds.

Now let’s look at how well we saved in the Nineties:

1990 – 1994 – 10%

1995 – 1999 – 8.28%

Yes, we saved hard during the recession of the early Nineties, but our savings habit started to slip when the housing market took off from the mid 90s onwards. However, things have certainly taken a turn for the worse recently, as the final table shows:

The UK average savings ratio, 2000-2008:

2000 – 2003 – 5.35%

2004 – 2008 – 4.30%

So, a declining trend, and the situation gets even worse.

In the first quarter of this year, the savings ratio collapsed to 1.1%. This is £1 for every £90 earned after tax, and takes us to a 49 year low.

In the past, a squeeze on our disposable incomes would have made us look to cut back and save more. Sadly, after a twelve-year housing and credit boom, it appears that we’ve almost forgotten how to save.

Of course, the purpose of having a bit of a financial cushion was to help when the bad times came. Well, the bad times are here, and for some people it looks like the cushion that has been there in the past is no longer available.

Perhaps the more you earn the more leeway you will have. However it is our experience that the more you earn the more you spend! (It’s important to focus on how much income you’re left with at the end of the month, not necessarily how large the income is).

So, ask yourself – are YOU saving enough?

Key Considerations:

It does pay to save. If you are serious about optimizing your finances to secure your future, do look at what you can afford to save and invest.

Once this is decided make sure that this money is targeted at fulfilling your goals in life.

ACTION POINT

Ensure you have an up to date expenditure template to identify where your money is spent, and compare this to your income now and in the future by analyzing your cash flow forecast (CFF).

This is VITAL.

If you do not have a CFF, ask your adviser to build you one, and if they cannot do this find a planner who can.

Do you have the scope to save/save more? If you have – do it!

It will bring Financial Independence Day nearer!

By: Ray Prince

Money Saving Tips. Maximize Savings on Everyday Items!

admin — Tue, 17 Nov 2009 05:35:18 +0000

Frugal living is more than a lifestyle. It’s a passion.
Call Me Crazy! I love It!

Why, who wouldn’t love getting paid to buy products that they use everyday?

Here’s how I do it.

I purchase an item that has a rebate offer (either a store or manufacturer rebate) while it is on sale and use a coupon during purchase. That’s it!
Using this formula I almost always come out ahead. When all is done, I’ve gotten back more than I actually paid for the item.

Even when I do have to pay for the items like deodorant, shampoo, soap, toothpaste, and toothbrushes it’s about 50 cents for a item that would cost up to $2 -$4 originally.

Am I the only one out there that gets excited about this?
I doubt it! At least I hope not. That would make me “Crazy”, wouldn’t it? But a lot of folks just don’t know how to combine money saving measures to maximize savings.

My local drugstore (which by the way is a national chain) often advertises items free after rebate. Hey, that cuts down on a lot of work for me. Easy Money! I e an also lucky enough to have a grocery store in my area that offers rebates and offers double coupons (sometimes even doubling $1 coupons as a special promotion). Needless to say, with six mouths to feed (myself, my husband, and four kids) I’m lovin’ that idea!

As the editor of www.simpledebtfreeliving.com, I’m always looking for new ways to save money. Visit us and follow one of the e-mail links to share your ideas or just let us know how excited you get about frugal living! Let me know I’m not the only one. Then we can put my family’s worries to rest. They think I’m really crazy.

Here are a couple other ways that I save on items we use everyday:

1. Always use items that are reusable rather than throw away

For example: Reusable coffee filters, cups and plates, and my favorite pet peeve -

The great sandwich bag conspiracy

The major manufacturers of sandwich bags would lead us to believe that it takes rocket science to keep a sandwich fresh. Ask yourself this, How long do you need to keep that sandwich fresh anyway? It’s not like it’s going to the moon. It’s just going to the office or school for a few hours.

The most practical way to approach this is to purchase reusable sandwich size containers. This is also very environmentally friendly reducing a great deal of waste. If however, these have trouble finding there way back home ( which is likely if you have children), you can save substantially if you purchase the plain old pleated sandwich bag that cost a mere fraction of the razzle dazzle zipper kind. Your mother used these for years and years with great success. I have used both methods for years and have never received a complaint of a stale sandwich!

You’ll find that doing these little things like, using real cups and plates instead of paper or plastic throw away, and recycling containers for storage or even to use in craft projects, can save a lot of money. Each by itself may seem minor, but when put together amount to tremendous savings over time.

2. Don’t buy it if you won’t use it. Things like small kitchen appliances, repair tools, and gardening tools are good examples. We know they’ll make our life easier if we just had the opportunity to use them.

There are 101+ small countertop kitchen appliances available to chop it, grind it, mix it, open it, bake it, grill it..well you get the message.

Simplify your life and narrow it down to a couple you just can’t live without. For me it’s my blender and my food processor. Although, I’m seriously considering a bread maker. Not quite sure if it’s worth the money yet. Especially when I’m so close to a bread outlet. But, you can’t beat the taste of fresh baked bread. I’m not counting the coffer maker it’s kind of standard equipment these days. I wouldn?t dare ask you to give that up! What am I crazy? Well , maybe..

It’s little things like the example above that identify frugal living.

3. Always get the best value for your money. Shop around. If this is a major purchase you will want to know what to look for. Research and compare products on the internet or in sale flyers. There’s nothing more challenging to the retailer than an informed consumer. That’s what you want to be. An informed consumer knows when it’s a good value! Informed Consumer – More Savings

By: Cheryl Johnson

Saving Money With Online Coupons

admin — Sun, 15 Nov 2009 08:21:09 +0000

Saving money online is actually simpler than it may sound. With a little searching, you can find great deals online. You can also find ways to save you money at the store or most anywhere else.

A great way to save money online is to visit the Web site of your favorite retailers. Most stores list overstock items at a discounted rate. Stores also list clearance items. By shopping for deals online, you will save yourself both money and the aggravation of going to the store.

Another great way to save money online is through auction sites. Many people sell the things they no longer want or need and you can often find great steals. Unless you absolutely need a brand new lamp, you can probably find the style you are looking for online for a fraction of the cost of new.

If you are looking for ways to save money while you are out shopping in traditional stores, you can find thousands of Coupons Online. Many sites offer lists of available coupons which you can print from the convenience of home. Some sites might even offer a list of free samples for you to request.

A final way to save money online is by signing up for email offers from your favorite retailers. Ever wonder why stores ask for your email address? It’s so they can send you special offers- and some of them are really attractive!

Whether you are looking to save money on insurance or on your next new furniture purchase, be sure to search the Internet for some great deals. You just never know what you might find.

By: John K Vincent

Saving For Hard Times

admin — Wed, 11 Nov 2009 13:01:36 +0000

Saving for rough times is a crucial part of your financial planning as having some spare cash stashed in an easily accessible place to cover disasters is a good idea. At a certain point common sense dictates that you’re going to run into an unforeseen expense and not having funds to pay for it you’re going to have to use poor borrowing practices. The average surprise cost when such events do occur is thought to run a few thousand dollars however whether it’s a gigantic amount or a very minor amount a disaster fund is needed to cover it.

You don’t need to hide this money under the mattress for it to be available. The best way to conserve this fund is by using a quick access savings account that pays a good rate of interest and hopefully is tax exempt. You could set up a simple bank transfer and allot a small amount into your bank account each pay check. You should also be sure that your savings account is low risk as you wouldn’t want to lose the money by trying for high interest payments. For example: don’t invest the money in the stock market, as stocks and shares can change in value, depriving you of much needed money at a critical moment.

Treat any interest your disaster account earns as a perk and not the main reason for having the account. In a pinch you’ll need quick easy access to your money and this is more useful than a little more money in interest can ever bet. Do not allow your disaster fund to grow into a fortune as the extra money would be more wisely invested, growing more in a better investment vehicle. Keep just enough to cover a rainy day so a few thousand should be more than enough.

Don’t be tempted to use your existing account to create up your rainy day fund. Your existing account makes it easy to “borrow” from the savings without knowing it and this usually means you won’t have enough money when you really need it. Also most checking accounts don’t pay high interest rates. To avoid the accidental spending of your disaster fund keep your checking account for normal bills and expenses.

By: Joe Duggins