Savings | Money Management Guide

The Inflation Rate Can Eat In to Your Savings

On March 26, 2011, In Savings

You have extra cash lying around and you need a place to put it, you can not just keep it in a box because the inflation rate will eat it away. So what do you do, you could place your money into an interest earning account and fight off some or all of the inflation rate. Stated below are three ways in which you can save your money.

Certificates of deposit (CD) are one way to save your money. A CD is where you place your money into an account and agree not to touch it for a specified amount of time, thus the interest on the money can be higher. The inability to take out and spend your money causes the interest rate on this investment to be higher than a savings account.

The amount of time you have to leave your money alone can vary from 30 days to five years depending on what you have agreed on. If you need your money before the date is up then you will be penalized an amount of money. The longer you leave your money in an account the more interest it can earn, thus the more money you make for saving your money.

Dividend stocks are another way to save/invest your money. The reason dividend stocks are listed under saving your money is because the stocks tend to be fairly stable and each quarter you receive a payment. Thus it can be seen as a saving investment for your money, yet it is riskier than any other saving option. But you benefit from your share price as well as a passive income.

The last way to save your money is with bonds, these are basically an IOU. You loan your money out and in return you can receive your money back plus a little extra money. The interest rate on a bond is higher than that of a CD, yet the bond price can fall.

Setting Up a Budget for Your Home Deposit

On November 26, 2010, In Mortgages, Property Investment, Savings

Owning your first home is a big goal and it seems like it requires big steps to get there. Once you reach that goal though it is very satisfying and rewarding as it provides you some good security and a good long term investment. It is also something that can be left behind for your kids. However, most people face the problem of not being able to save up for the down payment. People struggle with this mostly because they aren’t budgeting correctly or they’re just not budgeting at all.

The way that most people budget is the decide on a figure that they need to save and then they say ‘okay. to save that amount of money I need to put aside $x every pay’. This sets up unrealistic expectations and almost sets you up for failure and disappointment. It makes it hard to stick to the budget because you haven’t planned for any unexpected expenses like birthday presents or getting your car serviced or your next power bill.

The best way to start up a budget would be to find out where you money is currently being spent. Look at statements and receipts for the past 3 or 4 months and break down your expenses into categories. Then start looking at future potential expenses like servicing your car or a quarterly gas bill.

Having all this laid out in front of you in a spreadsheet gives you a bigger picture of where you money is going. Start cutting out certain expenses you could do without and start cutting back on expenses you feel you could do with less frequently. Things like going to the movies can be reduced. Instead go to hire a DVD and watch a movie at home, or even with coffee, instead of buying a coffee before work every day starting making your coffee at work.

This will help you put a realistic budget together, the most important thing is that you always have a category in your budget for yourself. Reward yourself as you go, if you’ve been sticking to your budget rigorously reward yourself with a gift or a night out. This will help you feel like your accomplishing something rather than feeling like you’re punishing yourself all for a house.

With all of the money that you start saving you need to make it starting working for you in a high yield savings account. Some people prefer other forms of high yield investments, but make sure that you are earning some sort of return on your money to help you reach your goal sooner.

Tagged with: high yield savings account • high-yield investments

Being Safe and Secure with a Passbook Savings Account

On June 26, 2010, In Savings

There are so many things that could happen when saving money at home such as a natural disaster or having the residence broken into that both could potentially lead to that money disappearing. While the chances of a burglar breaking in and finding the exact place where the money might have been hidden and then getting away with the crime is quite uncommon, the fact that it is possible should be enough to make the decision that opening up a bank passbook savings account or regular savings account is the best and safest idea.

A passbook savings account is one where all withdrawals and deposits need to be recorded in a little book which is given to the holder of the account. All transactions which are executed whether they be credits, debits or interest payments will be listed in the passbook so that the numbers shown truly reflect the contents of the account at that time. Its a type of account that is becoming much rarer as we get used to the idea of using credit and debit cards, and Internet banking. They are however quite handy for people who make dew transactions, and they keep things simple for those that want a concrete evidence of the state of the savings account.

Depending on where an individual lives natural disasters are sometimes more likely to happen than other places and different ones occur such as tornadoes, floods, hurricanes, tsunamis, fires and more. The risk factor in losing several thousand dollars over not wanting to open up a simple bank account is horrible and definitely not worth the risk.

With so many different financial institutions to choose from, it can be very difficult for an individual to pick one from another especially if there are plenty close by. First, the number one rule and standard for choosing a place to open a savings account is making sure they are insured by the FDIC (Federal Deposit Insurance Corporation) because this means that no matter what, up to one hundred thousand dollars in insured in the account. This can be very helpful if anything where to happen or malfunction with the bank or even the economy as a whole. Next, instead of just choosing any random account, try to pick one with the best interest rates because having money stored in a bank savings account means that interest will be gathered. Having an entire percentage difference could mean earning fifty dollars or one hundred dollars over the course of a year and while it may not seem like much every penny counts. Overall, opening up a savings account is the absolute safest and most secure way to saving money and ensuring that nothing will happen to it that could make it disappear or get destroyed.

Tagged with: bank account • Bank passbook savings account • passbook savings • passbook savings account • Savings Account

Safety and Security with Checking Accounts Offers

On June 22, 2010, In Savings

Although saving money at home is very possible for anyone to do, the lack of safety and security this type of situation is not going to be ideal. Unless several hundred dollars is spent on a bolted safe then someone could break into the home and walk out with the money and your life savings could be gone in the blink of an eye. Additionally, if a natural disaster were to occur such as a tornado, hurricane, fire, flood or other catastrophic event there is a definite probability that the money could be lost forever or even burned to ashes. Instead of taking this unstable route for saving money, opening up a new checking account is an excellent way to secure cash up to one hundred thousand dollars when signing up with a bank that is insured by the FDIC (Federal Deposit Insurance Corporation). No account holder in around eighty years has lost any money when dealing with a credit union, bank or financial institution that is insured by this group that was started in 1933.

There are two different types of bank checking accounts and that is either the regular version or the free one. Each one has their own advantages and disadvantages, it all depends on the individual and what they want in terms of checking account promotions, terms and conditions, minimum balance requires along with other rules that may apply. For instance, while a free account may be an incredible choice for a young individual who wants a hassle free account in which money can be stored, money is not taken out on a monthly basis and be able to use a debit card whenever they please there are others that want more than that. Some people have a great deal of money they would like to have in their account, and are willing to meet the requirements to get checking account offers that are very enticing, therefore they want to pay the monthly fee if not meet the minimum requirement to waiver it and gain interest while storing money in the bank. All in all, there are plenty of different financial institutions that have all sorts of different rules and guidelines it all depends on what the person is looking for in a bank and a checking account to make their final decision.

Tagged with: bank checking account • checking account • checking account offers • checking account promotions • New checking account

Self Directed Roth IRA – What are the Eligibility and Withdrawal Rules?

On December 4, 2009, In Savings

A really smart savings plan for a person is to invest in a Roth IRA. If you follow the eligibility and withdrawal rules then any hard-earned money you put into this program for retirement savings grows completely tax-free. You will not have to pay a dime in taxes as your retirement savings grow, or once you withdraw your money when you retire. Moreover, a self directed Roth IRA is preferable to a 401k or alternative retirement savings plan since you can have it in essentially anything that you want, from stocks to real estate.

Roth IRA rules are not tricky to understand. Your contributions can be taken out at any point, without incurring a penalty. Make a spreadsheet of all the contributions you make each time so you know the whole of your IRA. If you make a withdrawal from your IRA, it is taken from your contributions first.

If 5 years have passed since you made your first contribution into the Roth IRA and you are over 59½ years old, you are able to take money out from the earnings without taxation. The 5 years is calculated from January 1st of the year that you paid in your first contribution, including if it was established from conversion or rollover. (See also Roth IRA conversion rules).

Should you decide on a self directed Roth IRA savings, you will find yourself in the top category once it relates to this special type of Individual Retirement Account. That is since a self directed Individual Retirement Account (IRA) is specifically stated as one where the account holder determines where their hard-earned money is invested. That is a quite familiar arrangement when it relates to a Roth IRA savings. One of the many ways you might like your money invested is in Certificates of Deposits known as a Roth IRA CD.

You may perhaps be stuck between opting for a Roth IRA savings or else your company’s 401K. Both strategies are good alternatives to save for retirement, but there are certain situations for you to find out about if investing. There are already some other fundamental differences between programs pointing to which may be the best for you. A Roth IRA savings allows investors to contribute “after tax” dollars to the retirement savings plan and make a withdrawal from your IRA from the contributions and earnings without taxation throughout retirement. A 401K is funded with spare money deducted directly from your salary before taxes and all withdrawals in retirement are taxed at your normal tax rate at that time.

Tagged with: roth ira • roth ira cd • roth ira conversion rules • roth ira rules

Money Management Guide

Helping you look after your cash

The Inflation Rate Can Eat In to Your Savings

Setting Up a Budget for Your Home Deposit

Being Safe and Secure with a Passbook Savings Account

Safety and Security with Checking Accounts Offers

Self Directed Roth IRA – What are the Eligibility and Withdrawal Rules?

Recent Posts

Categories

Loans

Stocks & Shares

Useful Links