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Is this overkill? Not enough? Do you have all three? Is it best just to have a Checking Account and a 401K and leave all your liquidity in the Checking Account?
So many questions! Would love to get some feedback. I'm a single 30 year-old guy by the way. Right now I just a Checkings and a 403B (kind of like a 401K), but am considering opening a Savings Account.
Is this overkill? Not enough? Do you have all three? Is it best just to have a Checking Account and a 401K and leave all your liquidity in the Checking Account?
So many questions! Would love to get some feedback. I'm a single 30 year-old guy by the way. Right now I just a Checkings and a 403B (kind of like a 401K), but am considering opening a Savings Account.
No. It's not overkill.
I think it's good to keep emergency savings, savings for your next car, etc. in a savings account. If you open an account online with a bank like Ally Bank, you can get ~1% interest rate. (I personally use FNBO Direct.) The biggest advantage to having a savings account, though, isn't the interest rate. It's keeping savings separate. There's a very strong tendency to spend everything you have in your checking account, which is a very bad idea. Online savings accounts are even better for this, because it takes a few days to get your money (although some will offer you an ATM card so you can take out $500 a day or whatever. I never use the ATM card for my online account).
The way I have it set up, is I have local checking and savings accounts and then I also have an online savings account, where I keep the bulk of my savings. But I do keep about a month's worth of expenses in my local savings account so if I need cash right away, I have immediate access to it.
Is this overkill? Not enough? Do you have all three? Is it best just to have a Checking Account and a 401K and leave all your liquidity in the Checking Account?
So many questions! Would love to get some feedback. I'm a single 30 year-old guy by the way. Right now I just a Checkings and a 403B (kind of like a 401K), but am considering opening a Savings Account.
I would argue that it's "under-kill", if you're 30 and don't yet have a savings account or a 401k. Stop thinking and just open them up. savings account is free to open up anyway, and depending on your employer, you may be leaving money on the table by not contributing to your 401k. I think you're at least 6 years behind in terms of contributing to a 401k, so i suggest you start ASAP.
No, it's not overkill. You're less likely to spend your emergency fund cash if it's not in the same account as your everyday funds.
Also consider opening a Roth IRA for additional retirement savings. Money put in a Roth IRA can be withdrawn any time without penalty, so it also makes up a nice backup to your emergency savings account.
So many questions! Would love to get some feedback.
Deposit paycheck (NET of 401K contribution) into savings. Direct deposit is even better.
Expect that most of it will stay there UNTIL you have a specific planned use for it.
The rest is logistics.
Periodically transfer what's needed for bills to the Checking Acct ...or to the VISA card...
and do so based on what you know is an affordable budget level (a whole other set of talks).
As the Savings account balance grows allocate that money to other specific things.
(emergency fund, the house, the nice car, the big vacation, whatever)
For most... having multiple savings account is the simplest way to make allocation real.
(your grandmother would have used cash in envelopes)
When the balances are large enough... shift up to a MM acct or CD's.
This is also when you should start the IRA and a brokerage account (another whole other set of talks).
Is this overkill? Not enough? Do you have all three? Is it best just to have a Checking Account and a 401K and leave all your liquidity in the Checking Account?
So many questions! Would love to get some feedback. I'm a single 30 year-old guy by the way. Right now I just a Checkings and a 403B (kind of like a 401K), but am considering opening a Savings Account.
No, not overkill, they serve different purposes. A 401k/403b is for the money you are putting away for your retirement, while a savings account is for the money you are putting away for short-to-medium-term needs (saving for anticipated purchases of car, house, college, vacation, renovation, baby on the way, scheduled medical procedure, etc.) and can also be used for your emergency fund (Grandma's rainy day fund).
Having multiple savings "buckets" is well fitted to....well, let's just say, "life". Stuff happens, stuff will continue to happen, and eventually you will likely retire anyway.
Is this overkill? Not enough? Do you have all three? Is it best just to have a Checking Account and a 401K and leave all your liquidity in the Checking Account?
So many questions! Would love to get some feedback. I'm a single 30 year-old guy by the way. Right now I just a Checkings and a 403B (kind of like a 401K), but am considering opening a Savings Account.
No it's not.
I have Roth IRA, 401k, "Rainy Day" Savings, "Fun Money" Savings, Health Savings (HSA), Checking.
I think it's good to keep emergency savings, savings for your next car, etc. in a savings account. If you open an account online with a bank like Ally Bank, you can get ~1% interest rate. (I personally use FNBO Direct.) The biggest advantage to having a savings account, though, isn't the interest rate. It's keeping savings separate. There's a very strong tendency to spend everything you have in your checking account, which is a very bad idea. Online savings accounts are even better for this, because it takes a few days to get your money (although some will offer you an ATM card so you can take out $500 a day or whatever. I never use the ATM card for my online account).
The way I have it set up, is I have local checking and savings accounts and then I also have an online savings account, where I keep the bulk of my savings. But I do keep about a month's worth of expenses in my local savings account so if I need cash right away, I have immediate access to it.
What do you like about FBNO direct? I have American Express Personal Savings right now
Mathjack, I though you've said before you prefer local banks?
I had asked about having an MMA with Capital One (does that qualify as on online bank?), and you said you prefer to bank locally. Am I missing something?
What do you like about FBNO direct? I have American Express Personal Savings right now
I've had the account a while. They paid the best interest the time I opened it. It isn't worth it to be to chase the best interest rate, so I just leave it there.
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