Online Savings Account: How to Earn More Money with No Extra Effort

Online Savings Accounts

Do you want free money? My guess is that your answer is yes, and I have a way for you to do it that you probably aren’t taking advantage of. If you are trying to save money then hopefully you have a savings account (makes sense, right?) But did you really think about what bank you chose to put these savings in? Like did you really think about it, compare different bank options and everything? If you are like most people (including me) you probably did not. Most likely you use the savings account connected to your checking account. It is so easy and it was already there. What you didn’t realize is this: you are losing out on free money.

Many of us don’t shop around for the best bank to park our savings in and this is a huge mistake. Because unless you are just insanely lucky, chances are that there is a bank out there with a better interest rate. This means you are losing out on free money (yikes). In recent years the emergence of online savings accounts have provided many high yield options. To keep you from making more money losing mistakes I will break down what they are and why you should get one.

What is an Online Savings Account?

An online savings account is just what it sounds like – a savings account that is accessed exclusively online. This has many benefits. It is accessible 24/7 and you can transfer money without having to visit a bank. It also offers savings to you. The bank isn’t having to pay for brick and mortar stores and tellers, and in return they can offer higher interest rates. There are a few pros and cons to these savings accounts, so read through them carefully and figure out whether or not an online savings account is for you.

The Benefits of an Online Savings Account

Benefits

A quick list of benefits are:

  • High interest rates
  • Low fees
  • 24/7 access

As mentioned before the interest rates are so much better – as in around 10x better than you are probably getting right now. There also aren’t as many fees associated with the account, which means more money for you to save. Everything is accessible online all the time. These are pretty straightforward.

The Cons of an Online Savings Account

However these benefits come at a small price:

  • Must have an account to transfer from
  • Online and call only – no bank to visit
  • For long term saving

Perhaps the biggest downside of an online savings account is the fact that there are no ATMs for you to just go deposit cash or a check directly. In order to deposit money you would have to put it in your checking account, then transfer from your checking account to the savings account. This might be annoying to some people.

If you like to sit down and talk to someone face to face, this isn’t for you either. All matters will be dealt with online or on the phone.

This is a more long term option, many won’t let you keep transferring money out. So if you don’t think you will be able to keep the cash there for a while you might not want to do it.

Is an Online Savings Account for You?

Taking the information above into consideration you can decide whether or not an online savings account is for you. If you are planning to just move money from your checking to a savings account periodically without needing it much this should be just fine. Transfers are easy enough, and you shouldn’t need much assistance for that. If you have more specific needs than that you might want to consider if the benefits outweigh the costs. Remember that these accounts usually have significantly higher interest rates – the switch might just be worth it anyway.

Choosing Your Online Savings Account

Online Savings Account for You
If after careful consideration you have decided to make the switch then hooray! Now what? There are plenty of online banks out there, so go through the options carefully. I’m no financial advisor so I can’t give you advice but I would be glad to point you in the direction of the best resources and factors to consider.

Some things to keep in mind when choosing an online savings account for you are:

  1. Bank Credibility
  2. Minimum balance required
  3. FDIC backing
  4. Fees associated
  5. Any bonuses you could receive

Here are a couple lists of good online savings accounts for 2017

  1. NerdWallet
  2. The Simple Dollar

The Bottom Line

Is it for you

Online savings accounts offer high yield benefits and often have less fees associated with them. They do come with the catch of having to perform all actions online or through the phone and are harder to access in a short amount of time. They can be an excellent options for you if you are looking for a place to park some money and let it rack up interest.

Would you consider an online savings account? If so, with what bank?

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Best Financial Websites: Learn How to Invest Your Money

Best Financial Websites

Keeping up with the best financial websites is something that I have been committed to since I graduated college. I’m a life long learner, and definitely have the frugal gene. Ever since I was a kid I was doing everything I could to save money. Once I graduated college and was on my own it became that much more important.

My finances were completely in my hands.

There are so many things I had to learn pretty quickly and I made a few mistakes at first (here is a post of the best budget tips I have for recent college graduates or anyone moving out on their own for the first time). I made it my mission to save as much money as I could and I have found a few websites to help me do just that. Without further adieu here is my list of the best financial websites to DIY your own finances.

I Will Teach You to be Rich

Best Financial Websites_I Will Teach You to be Rich

Ramit Sethi’s book by the same name is the first book I read after graduating college. I did not want to be caught off guard with any financial struggles right after graduation. The book was a great overall read covering many topics in personal finance.

Sethi is a big proponent for handling your finances yourself and doing so wisely. His book was valuable and entertaining. His blog is the same way. He keeps his website full of up to date financial information in plain English. I always recommend his book and blog to friends who are just starting out in their personal finance journey since it covers many different topics in a fun, conversational tone. I love keeping up with his blog to see what new tips he has to offer.

Nerd Wallet

Best Financial Websites - Nerd Wallet

Nerd Wallet is one of the best financial websites when it comes to finding ways to save money. Whenever I need to do research on a credit card or bank I turn to this website. They constantly come up with updated lists of the best rates and deals.

If you are looking to compare different credit cards or bank accounts, this is the place to go. I recently used this website to find some of the best online savings accounts out there. So if you just want a simple website to find “the best of” or to compare, this is the place to go. It is so simple with straight forward information. Great resource.

Investopedia

Best Financial Websites_Investopedia

Investopedia is one of the best financial websites because of the up to date financial news and references guides. Don’t let the fancy Wall Street terms confuse you – it is also a great place to find definitions for financial terms.

It is also loaded with handy informational guides. Are you a beginner and want to learn about stocks? Here is a basic tutorial for what you need to know. Once you have learned the basics you can test your knowledge with their stock simulator. A great way to learn how to invest without losing money.

Yahoo Finance

Best Financial Websits_Yahoo Finance

Yahoo Finance is one of the best financial websites when it comes to finding out all information about particular stocks as well as news about the financial climate.

Markets change everyday, and Yahoo Finance is the best financial website to keep up with the times. It is also a valuable resource to find out all the small details about a stock. Before buying a stock you should do research about the company and the stock – this is the best place to do it. The also have a Money Basics section that is worth a read.

The Bottom Line

With so much information out there it can be overwhelming to find credible and straight forward resources. These four should be the best financial websites to start your personal finance journey or even to continue learning if you have been doing it a while.

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Budgeting After College: Avoid These Budget Mistakes

Budgeting is hard. There are so many things I wish I would have known right as a recent college graduate. Getting a job was so important that I really did not think any further than that. But then I got the job, and had to move to a city where I did not know anyone.

One of the biggest things I struggled with was balancing my bank account. There were a lot of start up costs for being on my own, and many things I didn’t account for. Here are some tips I would give to college graduates just starting out on their own.

Budgeting: Create the Budget

This might seem obvious, but I promise you it is not. Many recent graduates get their new job and salary and think they have enough money where they don’t have to make a budget. It can seem like you have a lot of money at first. Up to this point, most jobs were probably part time and paid a lot less, and you survived through that. Now you have so much more. However, you have so many more bills, too. Reality hit me the first month. I moved into my new apartment, but there were tons of unexpected expenses. Student housing provided me with many things that regular apartment complexes don’t – such as internet and cable. Plus, I was living on my own instead of with a roommate so rent was much higher.

Create a budget and stick to it. Write down all necessary expenses (including savings, this should be nonnegotiable!!) and then figure out what you need for everything else. Play around with different personal accounting systems. Do you use cash or a debit card and pay all expenses right away? Or do you put everything on a credit card and pay it all off at the end of the month? Do you set all your bills for one day or scatter them throughout the month? Try different systems and see what works best for you. This might also depend on your work’s payroll calendar and when/how often you get paid.

Pick Housing Wisely

Speaking of budgeting, have a reasonable budget. I will admit that I might have spent a little too much money on my first apartment out of college. I’ve had to make a lot of sacrifices so that I can pay the rent. Many people suggest that rent should be no more than 30% of your income. However, if you think things through and decided that you would rather have a nice place to live than go out to eat or go shopping all the time that is your choice. A huge part of budgeting is the tradeoffs. Picking one thing means giving up another. If you define your priorities you should feel comfortable in your choices. I just suggest that you think things out thoroughly before committing. A good exercise would be to pick two choices: one at the high end of your budget and one at the low end of your budget. From there write down all other expenses and budget the “fun stuff” as well. Visualizing each budget and actually deciding where you would have to cut money might help in your decision.

Set Up Autopay

Autopay is the easiest and most convenient thing and it astounds me to find out that a lot of people do not take advantage of it. Would you like to have less bills to stress out about and worry over? When I first started working and living on my own I spent so much time worrying over whether or not I had paid all the bills I needed to pay and on time. Plus throw in tons of time spent forgetting many of my usernames and passwords and having to reset those just to pay a single bill. So many systems offer an autopay feature. Most of the time it is as easy as going into your account, entering you pay information, and selecting a day for it to be taken out of your account.

Now I understand that not everything has this feature or you may not want to use it. For instance, I pay my rent and credit card manually since they are large amounts and I have to make sure to time things right. For what you cannot set to autopay, I suggest you set a calendar reminder in your phone to pay them. Your credit cannot afford any mistakes.

Retirement

It is odd to think of retirement as soon as you get your first job, but you should. The more time your money sits in an account with interest, the more money you will have at the end of the process. Set up a retirement savings account right away! Most employers offer this with their full time benefits package. Many even match a percentage of what you save. Say an employer has a 50% match policy. This means that for every dollar you save in your retirement account, they will add $.50. This is free money. Free money that will also accumulate interest. You do not have to start off with a huge amount. Start off with a small percentage of your paycheck. As you find your footing and figure out your budget you might find that you can increase it without missing the money too much. Just remember that the more you have early on, the more money there is to grow interest off of.

Avoid Large Unnecessary Purchases

I cannot tell you how many people I see buying brand new cars right after graduation. You might get excited with your new paycheck and see that the car payment will fit in your budget. That does not mean you need it! If you have a working car, keep it. If you desperately need a car, get a used car at the very least. Cars are depreciating assets. If all you need is a vehicle to get you from Point A to Point B then get just what you need within your budget. Money spent on a new car is money that could have been earning interest in a savings or retirement account. Just don’t do it.

I sincerely hope that this information was useful, and if anyone wants more clarification on a topic let me know I would love to extrapolate. You can also read more of my finance tips here. There are so many things I know now that I wish I would have known just starting out. My hope is to help you all avoid some of my mistakes and start off on the right foot!

Have any additional tips for recent grads? Leave them in the comments.

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The Easiest Way to Save Money for What You Love

save money

My first few months after graduating college I lived in constant fear of running out of money. The salary from my job was just enough to cover rent, bills, groceries, savings, and left a couple of hundred dollars for all else. I remember being so excited to have my first apartment to myself, but not having enough money to decorate it the way I wanted to. One of my biggest fears after graduation was that I would run out of money and have to call my parents to bail me out. I needed to prove that I could manage my money wisely, but that turned into depriving myself from everything that wasn’t a necessity.

After being fed up with that, I made a few changes to the way I dealt with my financial situation. One, I created a budget spreadsheet that I use almost every day. And two, I created a separate bank account for the fun stuff.

Saving Money

At first this bank account didn’t have a real purpose. I knew I wanted it to be “guilt free” money, but I was not sure for what exactly. So I would go shopping and buy things I really wanted (my first purchase on the card was a vinyl record player—best fun purchase ever!) However, since the account really had no purpose, I was spending the money here and there on little things and I was not getting the satisfaction I was wanting.

Then, at the beginning of 2017 I started to redefine my goals (new goals for a new year, groundbreaking I know). I had just gotten back from a family vacation to Cancun and completely obsessed with traveling more. So I made a decision and started saving in my travel account. I started small, and built up over time to get where I am today. At my rate currently, I am saving $2,600 a year for travel! Crazy right? A small amount every couple of weeks makes a big difference. The best part is that the amount is constant every other week. I can plan for a trip in December, and calculate how much I will have by multiplying $50 for every week up until the trip to see what I will have to spend.

How to Save for the Fun Stuff

If you would like to take the same journey I did and have a separate account for the things you love (or just save money to your regular savings account), here are some tips I have to get you started:

Pick Your Purpose

Don’t make the same mistake I did and save without having a specific idea in mind about what the money is for. If you don’t have a purpose for it, you will spend it on unimportant things that you will forget about in a matter of weeks. Think of something you love doing, but takes money. Maybe it’s a manicure, shopping spree, or travel like me. Find whatever makes you happy and that you would be excited to spend money on and write it down.

Set a Goal

Set a goal of how much money you want to save and how often. Start with something small and manageable and work your way up. I started off saving $50 every two weeks, then increased that to $75, and now it is at $100. Once you realize that you don’t even really miss that money, you can push yourself further and further. If you get a regular paycheck, I suggest you pick a schedule that coincides with those days. That will make it easier to save as soon as you get the money.

Save Automatically

The best tip I can give you to make this as painless as possible is to set up autopay and let your bank do its thing. For me, I have $100 out of every paycheck of mine go to my travel checking account. This way I do not even see the money deposited into my main checking account, and don’t even think about it. It never touches the account I use on the daily basis, and the only way for me to use that money is to take out that particular debit card, or to transfer to my main account (which I never do).

Keep Reminders around You of Your Purpose

Saving is much easier when you can picture your goal. If you are saving for travel like me, have a board of travel destinations you would love to go to. If you want a shopping spree, keep a wish list of the clothes you will buy once you have saved enough money. Always remind yourself of your why. You will be less likely to back out.

Spend without Guilt

My last step of course is to spend the money without guilt. Go into your purpose and not feel bad thinking you are wasting money. You earned it! You saved it! You made a goal and stuck to it and now you get to enjoy the rewards. Keep mementos and pictures to use as reminders for your future saving.

Bottom Line

In order to save the most money as painlessly as possible you should define what it is you are saving for, arrange a payment schedule you can stick to, set up automatic payments to that account, keep your purpose in your mind, and spend your money the way you want! This method is easy and effective, and I hope it enables you to spend more time doing the things you love.

What purpose would you like to save more money for?

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The Simple Tip You Can Use to Spend Less Money Each Month

Spend Less

How to Spend Less

It is always a goal of mine to spend less. But when it comes to overspending, I am horrible. I am not a big item spender, but instead I buy tons of little things so that all my expenses creep on me slowly and it’s a big problem before I even realize it. Yikes. However, I have developed a system to cut my costs and so far I actually have money left over in my bank account at the end of the month to move over to savings. So what is this magic tip to spend less? Make a wish list.

Make the List

Instead of impulse shopping, make a list of all the things you have been thinking about buying and the prices and wait a couple of days. If you are a frequent Amazon shopper you can create a digital wish list of things you find. Not only will this conveniently save all the links in one place, but Amazon will tell you when the price goes down. So add something, wait a little bit, see if you still want it, and the price might even be lower than it initially was and you will spend less than you would have had you bought it impulsively. Score!

Wait, Then Re-evaluate

After waiting a while you might find that you didn’t even really want it that bad, and you don’t even buy it. This prevents buyers remorse big time. What about the things that you still get excited about just seeing them on your list? Buy them! First, go through the list and pick the top items that will still fit in your budget. If there is something at the bottom of your list that you didn’t have money for that month, move it to the next. If you really want it you will be able to wait.

The Bottom Line: You Will be More Satisfied and Have Less Stuff

If you do buy an item you will value it more. You waited, decided you really wanted it, and now you can enjoy it. Ta da! You spend less while being happier with your purchase. Plus you will have less clutter in your life. This is something I have been working on seriously. I buy things because I want them in that moment, but later I forget about it and it just takes up space in my already tight apartment. Save your money for things you really want and you will be happier. It is that simple.

 

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