Saving

Untitled by grittycitygirl.

Have you ever diligently set aside money in a savings account for a few months only to take it out when an unexpected expense came up?

I’ve done it more than I care to admit. I don’t have trouble making depositing money to savings, I have trouble keeping it there!

Here are some ways to keep your savings in your savings account. Continued

After criticism from customers and personal finance bloggers, social saving startup SmartyPig has dropped the $5 fee for users to contribute to other users’ savings goals. Continued

Astute readers may notice that I often plug my high yield savings accounts review. (See?)

Yes, I earn affiliate commissions from that page, but even if not, I would still plug it. I love helping readers start saving. An interesting observation I have made, however, is that new savers choose the highest interest rate (currently HSBC) about 8 to 1 over the other banks, despite their unique attributes. I actually save with ING despite their lower APY, and I am very happy with my decision. A recent email from ING reinforced that sentiment. Continued

Are you broke? Have you been broke in the last year? If so, here’s a simple tip anybody can do to start building financial security. Do this and, at the very least, you won’t be broke again. It can also psych you up to save more, spend less, and get rich. This tip is so simple you will probably laugh, but it works. Trust me! Continued

Americans are not saving money. Our national personal savings rate has been less than 1% since 2005, when our savings rate was actually negative; its lowest point since the Great Depression. If we are not saving, then we must be spending more than we ever have. But why?

In his new book, Going Broke: Why Americans Can’t Hold On To Their Money, Connecticut College Professor of Psychology Stuart Vyse explains our unstoppable spending. Continued

Whether you want to start saving, add to existing reserves, or beef up an already brawny bank account, here are 31 savings tips to give you a month of tightwad tactics. Continued

I am always interested in how others manage their personal cash flow, so I’ve decided to share how I do it. Ultimately, which accounts your money flows through matters less than where it flows to, but recently I’ve found utilizing multiple bank accounts actually makes keeping to a budget easier. Continued

Wondering what ING Direct’s Electric Orange Debit MasterCard looks like? I just got mine in the mail, here’s a glimpse! Continued

ING is now offering 4.0% annual interest (or more) on your checking account, up from from 3.0% when the product was first released. Sounds like free money to me! Continued

Retirement plans aside, not everybody is fortunate enough to begin investing in their twenties. Paying back credit card debt, establishing an emergency fund, and saving for home ownership all take priority over building a stock portfolio.

But if you can start investing, you certainly should. So how do you know when to start? Here is run-down of what the financial priorities in your twenties should look like.

Start with Retirement

Even if you haven’t tackled all of your other financial priorities, think about saving for retirement right away either through your employer-sponsored retirement plan (401k) or an individual retirement account (IRA).

Even if it’s just $200 a year into an IRA, it’s important to get in the habit of setting aside part of your income for the distant future and you won’t have to pay federal income taxes on your contributions.

If you haven’t already, start saving for retirement now.

Pay Off Credit Card Debt

Even in its best years, you won’t earn a return in the stock market that can surpass credit card interest rates. So tally up what you owe, take a deep breath, and knock out that ugly debt.

If you need a hand, our seven steps out of debt series can help.

Get an Emergency Fund

Unlike cash in short-term savings accounts, investments aren’t always liquid, meaning you might not be able to use the assets you have invested in emergencies like if you loose your job or face medical expenses.

Once your debts are paid off, concentrate on building an emergency fund equal to at least three months of your income. In time you will want to grow this to about six months, but three months is a good start.

With high interest rates and access to your money in about 2-3 business days, an online savings account like those from ING Direct is perfect for achieving this goal.

Keep Saving, Start Investing

Once you have an emergency fund established it’s time to start investing!

At first you won’t want to be quite as aggressive with how much you invest as you have been with paying off debt and saving.

Keep saving for upcoming expenses like your home, vacations, cars, even weddings.

Your investing priority should be retirement, and you’ll want to exhaust the ways you can save for retirement before turning to the general stock market.

IRS-set contribution limits in 2007 are $15500 for 401(k)s and $4,000 for traditional IRAs (note that if you max out your 401k, however, your IRA contribution won’t be tax-deductible).

If reach your retirement contribution maximums and are rearing to keep going, congratulations! Then it’s time to start considering buying some securities with an online brokerage.

What About Student Loans?

In most cases, it’s wise to start investing even if your student loans aren’t fully paid-off. Student loans generally have long terms but at fairly reasonable interest rates thanks to federal subsidies. With some aggressive investing you make more than you’re paying on student loans.