:: Money Management pt.1 – Setting Up Accounts ::

Posted by flavorinnovator in money, news, productivity | 2 Comments »

Everyone knows my stance on money. Yet, we all need it to live so why not play the game like a level 7 boss? You would be surprised how many people don’t have a savings or retirement account, or how many folks are in debt. Folks are still putting money in their big bank savings account which gives them a return of practically 0%. This article is meant to get you informed and taking action. Aside from opening up these accounts, scheduling automatic transfers from your checking account to your savings and retirement account is crucial to staying ahead of the pack. Let’s go!

Checking – Ally
Tired of big banks charging monthly fees and minimums? Ally is an online bank that offers a great Interest Checking Account. The perks are $0 monthly fee, no minimum, they reimburse ATM fees charged by other banks, and the interest is decent. The main drawback is that you have to mail in your checks which takes a few days for the money to be available. However, if your checking and savings account are linked you can just transfer money from your savings while waiting for the deposit to process. The reason online banks can offer great perks is because their overhead is low, so take advantage by parking your money in an online account.

Think of your checking account as a filter. All your money goes through here but then gets dispersed, through scheduled automatic transfers, to your bills, savings, and retirment. Set it and forget it!

Savings – ING Direct
Where can you get the most interest for your short term money? ING is usually in the front of the pack with their high interest rates, no fees, and no minimums. Plus, it’s FDIC insured so when sh*t hits the fan again you will be protected.

Use this account to save for short-term (one month) to midterm savings (five years) things such as your own birthday gift, weddings, down payments, and at least three months worth of income incase work is at a snails pace. The most important practical difference between your checking and savings is that you withdraw from your checking, but rarely from your savings (at least that’s how it should be). Think of your savings as a “goals” account. Aim to put about 5% of your monthly income here.

Retirement – Vanguard
Choosing a retirement account doesn’t need to be difficult, nor do you have to be the fox that lives on Donald Trump’s head. You can start by investing just $50 a month. If you already have a 401k, awesome! Next step is get a Roth IRA but choosing a Lifecycle Fund, aka Target-Date Fund, for it. It’s the easiest investment choice you’ll ever make. The Lifecycle fund will handle the allocation, trading, and maintenance, automatically diversifying for you based on your age. It starts off aggressive in your twenties/thirties then shifts investments to be more conservative as you age. If you thought about opening a retirement account but didn’t know where to start this would be the painless way to do so.

With this Roth IRA Lifecyle Fund the money you transfer in just sits there. You will need to actually press “buy” or “invest” on the account page to start making good returns. Starting with as little as $50 a month is a good step. Ultimately, you will  want to put at least 10% of your monthly income here.

So there you go. Getting started is more important than becoming an expert. Don’t over think things otherwise it leads to you doing nothing at all. Once you set these accounts up and schedule your automatic transfers be glad to know you’re on the way to becoming financially literate. Stay tuned for pt.2 – Figure out how much your spending and making your money go where you want it to. Any tips on investing or money mangement? Please share.

More Reading: I Will Teach you To Be Rich (corny I know)


2 Responses to “:: Money Management pt.1 – Setting Up Accounts ::”

  1. Solid game!!! I just started the process of moving my money out of the corporate Shiti-Bank. And i need to learn about putting what little i have into savings so it can grow.Keep dropping game, im listening.

  2. flavorinnovator

    Many thanks for tuning in bruh! Good to hear youre making that transition. Sounds like you have a small amount of money to put into the saving, but at least youre doing that. If you got any questions theres tons of info online and you can hit me up as well. Peace!

Leave a Reply