How to bank?

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How to bank?

Postby octoberpumpkin » Tue Sep 20, 2016 6:24 pm

Is anyone here good at the banking? I am not good at the banking.

I made up a nifty budget for my boyfriend and I, and it has savings and it has savings for car stuff and for home stuff and for school stuff as was outlined by the budget Gods. So umm, I was wondering how you keep those savings all separate and sorted? Also, savings accounts. Should we get a savings account instead of just using checking account so we don't accidentally spend. What about that interest stuff? How does that work?

Sorry if this all sounds dumb and thank you for the help!
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Re: How to bank?

Postby Masonator » Tue Sep 20, 2016 7:25 pm

I use Mint, which is alright for budgeting. I'm not really in love with it but it works. For basic savings, I'd just start with a checking and a savings. Use the checking for monthly expenses, and move everything else to savings until you need it. Interest will be nominal on both those accounts though. You'll find more money scouring sidewalks for loose change than you'll get in interest on either a checking or savings account. Just make sure there's no monthly fee for the accounts, or if there is, it is waived if you have a requisite amount of funds in the accounts.

If you've got a decent sized amount of savings that you won't need for the next 9 months or so, you can put that into a certificate of deposit, that will yield a better interest rate than a checking or savings account even though it is still kind of crap. There's a penalty for withdrawing from a CD before it matures though, so consider that before you commit to a 9 month or 12 month CD.

Longer term savings (as in, starting your retirement fund) that are generally smarter for young people would be Roth IRAs. There's a yearly cap of $5,500 (I think) on those. Any savings you have beyond that and you probably want advice from someone smarter than me, who will probably be able to recommend good mutual funds and the like.
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Re: How to bank?

Postby cmsellers » Tue Sep 20, 2016 8:20 pm

I recommend going with a local bank or a credit union with deposit insurance (all banks have it, not all credit unions do). The rates will be better, they're less likely to charge obnoxious fees, and if you have a problem they're easier to get it sorted.

The only drawback is that people use the big banks for convenience; with a small bank or credit union you have to know where the ATMs in their network are (small banks and credit unions usually have networks that let members of other small banks and credit unions use their ATMs).

A savings account is a good idea to keep for emergency expenses if you have the money for one, so you don't take a hit like you would withdrawing from a CD or IRA.
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Re: How to bank?

Postby ghijkmnop » Tue Sep 20, 2016 8:40 pm

Over the last few years, Credit Unions (CU) have implemented "Shared Branching," which allows you to go to any participating CU and do your banking, just like you are dealing with your own. For example-- I am a member of abc CU in Maine. I have a car loan through them, so I'm not ready to close the accounts yet when I move to another state.

So, if I get paid with a check when I sell a CD or one of my art pieces, I can go to xyz CU in my new town, and if they do Shared Branching, I can deposit the check into my accounts at abc CU.

Masonator wrote:Longer term savings (as in, starting your retirement fund) that are generally smarter for young people would be Roth IRAs. There's a yearly cap of $5,500 (I think) on those. Any savings you have beyond that and you probably want advice from someone smarter than me, who will probably be able to recommend good mutual funds and the like.


There's some good starter info here. Please note that many banks and Credit Unions offer these services.

https://en.wikipedia.org/wiki/Roth_IRA
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Re: How to bank?

Postby mancityfooty » Tue Sep 20, 2016 11:12 pm

definitely get a savings account. it's best if you make it so you can't access it via atm machines. just transfer the money over and forget it until you absolutely, positively need it for something.
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Re: How to bank?

Postby iMURDAu » Wed Sep 21, 2016 1:30 am

My checking account came with a savings account. So we keep money that's not to be touched in there until we plan on using it. We don't really use it except for holding money back for vacation or Jr's surgery. *extra points if you use the Connery accent when you read "Jr"*

My wife handles the bills but from what I understand the way she does things is plan, plan, plan and keep on top of non-bill expenditures.

I get paid every other week, my wife gets paid every week. So she matches pay dates up with when bills are due and plans around that. Its easier if you have a rough idea of what you've got coming in on those pay days, of course. She'll save portions of each check for different bills. She uses a notebook. Like she'll write down:

September

$XXX - Rent - Due 9/1 - Paid 9/1
$XX - Credit card - Due 9/8 - Paid 9/8 autopay
$XX - other Credit card - Due 9/8 - Paid 9/4
$XX - Car Insurance - Due 9/9 - Paid 9/9 autopay

So she puts the dollar amount then what its for and on the other side of the page is the due date. She crosses them off as they're paid and obviously from the example writes down when the payment was posted. Basic ledger stuff. She'll also use another page to write down pay dates and how much she plans on using from each check for each bill. Its easier to break up larger bills over the month so you're not paying rent with an entire check right at the end or beginning of the month.

Every 2 or 3 days she sits down and reconciles what she's got down for what we should have after everything clears. During that time she's going over receipts from whatever we've bought like gas, food, crap we felt like buying, etc. She checks that against what our bank shows online so there's no surprises. But even if one of us forgets a receipt its usually not hard to figure out what it was because.... the bank shows debit purchases online. We generally don't use cash for anything because its hard to track but easy to spend.

She's not here right now to give me the full rundown :oops: so I'll try to post more later or tomorrow if this has been any help so far.
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Re: How to bank?

Postby octoberpumpkin » Wed Sep 21, 2016 2:02 am

Yes, everyone has been very helpful so far, thank you!
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Re: How to bank?

Postby jbobsully11 » Wed Sep 21, 2016 6:17 am

Savings accounts have better interest rates than checking accounts, overall. Credit unions tend to have higher interest rates and lower fees than banks do, but shop around and see what's best in your area. Actually, the banks that are totally online tend to pay even more, but you may not be able to access your money as quickly in an emergency (among other drawbacks). If you can, put a significant amount of your money in a certificate of deposit like Masonator said (or do that once every few months and build a CD ladder). They give better interest rates than your average savings account, and the fees aren't usually that bad if you have to take money out prematurely.

Mint and Quicken are the two budgeting programs I see referenced a lot (I think you can separate savings by category with those), but I just use an Excel spreadsheet. I don't have too many expenses, so it works well enough for me.

As far as the actual budgeting goes, how often do you have money come in? If it's every other week, that's 26 times a year. If you're able to budget around two checks a month, you'll have an extra two checks a year to do whatever you want with. In general, examine all of your expenses every once in a while and see where you can save money.

Also, if you want, I can link some of the personal finance blogs I used to read.
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Re: How to bank?

Postby octoberpumpkin » Wed Sep 21, 2016 2:25 pm

Sure, that would be helpful! We have money coming in every week and I'm using YNAB
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Re: How to bank?

Postby jbobsully11 » Wed Sep 21, 2016 3:43 pm

If you have money coming in every week, you could try to budget for four paychecks a month, and put the other four that you get during the year toward other things. For blogs about saving money:

I Pick Up Pennies is about a woman and her husband finding ways to save money despite their myriad health problems (though they're a lot better off than they used to be).

Surviving and Thriving is written by her mom, who is also a writer for MSN Money (which has a lot of information about everything money-related, banking and budgeting included). She's kind of an expert on living well with almost no money; the original post about living on $12,000 a year seems to have been taken down, but see the reboot she posted on her blog.

Debt Ninja is one of those annoyingly cheerful types who just kind of fell into a job as a special agent. He and his wife saved a ridiculous amount of money in a fairly short time.
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Re: How to bank?

Postby octoberpumpkin » Fri Sep 23, 2016 12:38 am

Thank you for the helpful links!

Also, I named my budget Cash monie $$
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