Ask MetaFilter questions tagged with finance and Savings

Savings for convenience?

Raze2k — Tue, 22 Sep 2009 09:55:09 -0800

Should I bother with a savings account? I recently dug myself out of credit card debt and for the first time in years, I'm finding myself no longer living check to check. I've continued to use one of my cards for most of my expenses, partially for convenience, but mostly for the cash back rewards now in tandem with Chase Blueprint (specifically 0% APR on all purchases, as long as I completely pay my bill each month with extra points for having a Chase checking account).

Having said that, I now find the balance of my checking account growing and I feel as though I ought to be earning interest. The sticking point here is that I need the money to be very liquid and easily accessible. Most of my accounts are with Chase and I'd like to keep it that way. Unfortunately I don't have a high enough balance to qualify for their interest-bearing checking accounts and the interest on their savings accounts is currently a pathetic 0.01%.

Since I'm not sure of my financial needs over the next year and I want to keep my funds readily available at a moment's notice, is it worth bothering with a Chase Savings account -- if only to provide the convenience of separating theoretical savings from day-to-day funds?

I'm not at a point where I feel comfortable transferring funds to an online-only bank and, admittedly, convenience is huge to me. Are there any down sides to opening a new savings account (other than the obviously terrible interest rate)?

Note: Chase Savings accounts are free as long as you have a minimum balance of $300.

Where to hide the money?

odi.et.amo — Sat, 19 Sep 2009 07:15:22 -0800

How can I figure out the minimum amount to keep in my checking account? Basic financial stats: I pay for everything I can (including bills) with my American Express for the cash back bonus. A few utility bills are withdrawn from my checking account, as well as rent. I pay my CC bill from checking, and my paycheck is deposited there. Income > Expenses.

My only debts are student loans (at such a low rate that I have no intentions of paying it off early), and about 4k left on a car loan that I could probably pay off now if I wanted to.

I'd like to make the most out of my savings account, though, and even though I feel like this should be easy, I can't figure out how little I need to keep in checking. Is there an easy way to figure this out? I know I can move some money to savings now, but I'd love a formula to figure out how much that should be (in addition to the money that I have automagically transferred every month).

Side question - should I put this extra money towards my car loan instead so that I can start saving even more each month? The interest rate on the car loan is between 5-6% if I recall. Online savings is with INGDirect which is somewhere around 1.4%.

Use cash to start a business or for a down payment on a home.

mintchip — Tue, 01 Sep 2009 18:40:50 -0800

Use cash to start a business or for a down payment on a home. I have been interested in having my own business. I have read business magazines for years and have even had a couple of small service-based businesses that I ran part time. No big bucks there but a rewarding experience.

Recently I've been considering trying to start a business for real. I have a small sum of cash (between 10-20k) I've been slowly saving for a home down payment.

It's a tough choice. Since I need a home to live in, buying one would mean an investment in my future and security. However, chances are that I won't get rich working for a private company. In fact, it's quite hard to get ahead nowadays with most of the good middle management positions gone. Meanwhile, most of the people I've known who did quite well for themselves did it by owning their own business.

I'm not saying it's easy. I'm just thinking that owning a business seems like my best shot at getting ahead, and it also happens to be a genuine interest of mine. At the same time, starting a business is a huge risk (I think it's something like 4 out of 5 fail within 5 years) and I could lose the money as well as a lot of time and energy.

I believe I have many of the qualities that would contribute to success in business. But it's hard for me to know if I have all of them.

What's your take? How have those of you who have been in a similar position weighed the pros and cons of such a decision.

Expat with scattered savings and retirement funds - how do I organise them?

wingless_angel — Thu, 16 Jul 2009 07:36:19 -0800

Expat needing to organise and manage money across two (or more) countries. How best to save in multiple places, and organise superannuation/retirement accounts? I recently moved to the UK, and I am self-employed here. For the first time, I have to take care of insurance, tax, and expenses instead of my employer organising this. I am putting aside money for tax every month. I have savings accounts both in the UK and Australia with various amounts in them. I am not sure how long I will stay in the UK (probably no more than a few years) and will either go home or to another country. I really need to get my money together and work out what to do with it.

I have two Superannuation accounts that refuse to roll together in Australia (both public sector). I have not signed up for a retirement fund in the UK. The most pressing issue right now is whether I let my most recent super account switch from Defined Benefit to Accumulation. I don't necessarily plan to go back to the same sector, so would accumulation be wise?

Should I open a retirement account here in the UK, even if I only plan to stay for a few years (I am paying NI contributions)? Or should I do something else with the money I would have otherwise saved? For example I have an Etrade account for share purchasing that I opened and never used.

Are there any savings accounts that work well for expats in multicurrency? I know about HSBC Premier but I do not have enough money to go with them.

I am concerned that I have pools of money all over the place, and I am not getting the best out of them. I would like to work these things out for myself if I can, if you are an expat how do you manage your money and savings?

Questions about the possible economic depression

mintchip — Tue, 16 Sep 2008 21:06:01 -0800

Questions about the best course of action to prepare for a possible economic depression I'm no economist, but I'm trying to learn about the possible economic depression everyone's been talking about since the recent financial upheaval. I have a number of questions.

1. I have always read that there are huge bargains to be had when the stock market tanks. If this is so, what stops investors from jumping INTO the market when there is a huge crash? For example, why not invest in an index fund as soon as the market drops off 500 points? Why *wouldn't* this be a good idea for the individual investor (assuming it isn't).

2. What would happen to people's outstanding debt if the companies they owe $ to went under? For example, did people's debts get wiped out with the banks that closed up shop during the Great Depression? What about nowadays...for example, what would happen to student loan debt if virtually nobody could afford to make payments?

3. Let's say you've got some extra cash flow right now...what's would be the best bet when preparing for a possible period of economic depression? Pay off outstanding debts? Stockpile money in order to buy up things once they've lost value? Etc.

4. How were some people able to purchase "bargains" during the great depression if indeed inflation caused money to lose most of its value?

5. Does FDIC insurance REALLY ensure that money is safe and accessible (up to the limits specified)?

6. Anyone care to venture a guess about what the next few years are going to look like economically?

Why can't I close out and withdraw from my 401k? Any way out?

Anonymous — Mon, 09 Jun 2008 19:02:16 -0800

I want to close out my 401k (and pay the necessary taxes) so I can pay off some debt. My 401k says I'm not allowed. Why not? Can I change anyone's mind? I have relatively minor credit card debt n. I have meager 401k savings n. (I am only 23). I would like to pay off my credit card, and be putting the money I'm currently putting toward monthly credit card payments toward more immediately accessible savings. Additionally, my company has as of last month decided to start matching 401k contributions, so I'd rather be putting matched money in than letting the $n sit there doing not much in the stock market while I continue to accrue credit card interest. However, I can't put money in until I'm not worried about paying off credit cards.

So I called my 401k people (Fidelity) to ask to take the withdrawal. They said I can't. I said, are you seriously telling me I can't have my money? And they said that since I'm still at my current company, I can't do anything with it until I'm fired or leave voluntarily. I've got a while before I'm planning on either of those. What the hell? It's my money, isn't it? We wants it :(

The other option is to take out a loan, but I'm only eligible to take out loan n/2, and paying back loan + interest plus paying off the other half of credit card debt won't really solve my problem. My goal is to wipe out the debt, be able to start contributing small (matched) amounts to retirement, and separately do a better job of keeping an accessible savings account with monthly contributions.

So, question 1: Why can't I take out my money? What's the reason behind this? And is it likely that by arguing in a different way I could get it? I'm fully aware of and willing to pay the necessary taxes if they'll just let me get at the money.

Question 2: Any other options for what I'm trying to do?

(Anonymous because I don't want this connected to the real name I use on here)

A sensible saving plan for an uncertain international future?

Cantdosleepy — Thu, 15 May 2008 07:10:35 -0800

PersonalFinanceFilter: 25 year old looking to start making payments into something pensionesque, but with an international bent. Any suggestions? I think it's time to start a pension (overdue, probably). I am British but have a Significant Other who has ties to three other countries, and feeling not a massive attachment to the UK, there's a reasonable chance that I won't be seeing out my days here.

I earn about 25k a year before taxes. I'm living in London so there's not a massive amount left at the end of the month, but I'd like to start putting a little something by.

So what do people advise? Would a regular British pension with a reputable company (Scottish Widows &c) be a good bet if I plan on disappearing from these shores in the next five, ten, fifteen, thirty years? Or might a regular/fancy savings account that isn't technically a pension but might operate like one (and still be around in ~50 years) be better for my situation?

FinanceMasters, I humbly beg for advice.

Money stories from international types are also greatly welcome.

Thanks!

FX gives me a headache

barrakuda — Fri, 15 Feb 2008 06:46:02 -0800

I am permanently moving from the US to Europe in about a month. I have about $50K in savings in HSBC high (and ever-falling) interest account. I am at a loss as to what to do with this money. Money-savvy Mefites, please come to the rescue. So I have all this money sitting in savings. For the next four months my salary will continue to be paid in dollars. I am a horrible, albeit charming, investment ignoramus. On one hand, I feel terrible about converting my savings to euros, on the other I don't know whether I want to leave my money in the States especially if the dollar is to further depreciate against the euro. I considered buying an apartment in Washington, DC and renting it out; but I wonder if there are other means of managing my hard-earned money and assuring that it will not loose its value. Ideas? Comments? Anyone? Bueller?

What to do with all that money?

Anonymous — Mon, 14 Jan 2008 15:41:00 -0800

I will soon receive an inheritance of about $100,000-$150,000 (numbers are vague right now). I'm looking for tips and advice for managing that money. I have talked with a financial advisor from one of the major firms about this and they would be happy to help me with my money at the rate of 4.5% per year. Frankly, I view that as extortionary. I even remember once hearing advice that said to not pay more than 1% in fees. This sounds reasonable to me. My current IRAs and other means of saving that do charge, charge less than 1%. I doubt it's 1/5th of a percent. I'm pretty sharp and generally good with money. I think that with the right research, and proper dedication, I can manage this money myself and save scads of fees.

Ideas so far:
1. I have a small amount of debt that I want to pay off immediately. Less than 10K.
2. I have a 13-year-old daughter for whom I want to sock aside somewhere between 20-30K for college. This is very important to me.
3. My mortgage is split 80/15 (the 15 being about $23K). I am toying with the idea of paying off the 15%. The interest on that portion is 8.25%.

For what it's worth, I am a late-thirties male with decent (not great) income and a proven ability to live frugally when I set my mind to it. I have no car payment. Only regular payments are child support, house, utilities, subscriptions etc. Currently, I am paying towards that small amount of debt on a monthly basis.

I need help on figuring out how to manage the rest of the money and my future money since I will ideally be out of debt aside from the mortgage. So, pointers, advice, tips, reading material, ideas, what have you?

email can be sent to AnonyMeFimomoney (at) sbcglobal.net

Saving money in euros...

Afroblanco — Fri, 02 Nov 2007 11:49:23 -0800

I keep all my savings in a Citibank e-savings account, which is like a regular savings account, only with a higher interest rate. Recently, the dollar has totally been tanking, and this trend doesn't show any signs of reversing. What's the easiest, safest, most profitable way for me to save my money in euros instead of dollars? This is what I like about the e-savings account :

1) My money is FDIC insured.
2) The interest rate is higher than that of a typical savings account. It's somewhere around 4.25%.
3) I can take my money out any time I want without incurring any kind of penalty.
4) It's ultra-low-maintenance - I can just put my money in and forget about it.

I would like to put my money in euros without sacrificing any of the above, if possible. I know that I won't be able to find something that's FDIC insured, but I would like something that has a similar degree of security.

The fact of the matter is that the dollar is totally tanking, and I don't want to see my life's savings evaporate because of inflation or anything else that I don't really understand.

I love the car, but the car can't love me back.

Anonymous — Wed, 13 Jun 2007 16:00:56 -0800

Should I sell my car? Am I doing the math right? Ok, here's the deal. I'm in grad school, have approximately $5500 of credit card debt and a car that I owe about $4000 on. The car is a 2001 Toyota Prius in good condition, which the Blue Book says I could still sell for about $11,000. So if I sell it for that price, I'll be able to pay off the lien and have enough money left over to get rid of my credit card debt with about $1500 left over.

I live in a town where, although I can mostly bike and walk, life would be much easier if I had a car that could at least get me to the grocery store. So the $1500 would go towards a cheap older car for local driving. (It's a college town, so there's always someone selling one as they move away.)

This would allow me to save the $300/month that would have been going to my car/credit card payments and at the end of the year I should be up by $3600, instead of still owing about $6000. Did I do the math right? Am I missing anything that makes it a better idea to hold onto the car and pay off the credit card debt in a year when I'm out of school and have a job? I can continue to make the car payment/credit card minimum each month without straining my current budget, but it would be nice to have that money earning interest in a savings account. There's no danger of me letting the credit card debt build up again. The only downside I've been able to see so far is that when I find a job I'll want to get a car more reliable than the beater, so that would involve taking on some small amount of debt again to get a more reliable used car. On the plus side, though, I would have the money I've saved to use as a down payment, so the additional debt should be quite minor. Am I missing anything?

RESP...still don't know what it means for me

acoutu — Mon, 29 Jan 2007 19:47:28 -0800

College savings: Does the government care how you spend a college savings plan in Canada? More than a year ago, I asked about registered educational savings plans. Now I'm wondering how the (Canadian) government regulates how you spend them.

I understand when my child(ren) can withdraw the funds and that they have to be registered in a post-secondary program. But, aside from that, how does the government check to see what you spent the money on?

I see that there's a $42,000 contribution limit over your child's lifetime. Let's say this grows to $78k. Tuition in, say, 2023, is $12k per year and my child needs a total of $50k to cover four years while living at home. My child also works at some internships and part-time jobs that cover, say, $24k of expenses. After they kick that in, there's around $50k left in the RESP. Heck, let's say there's even $25k left.

Do you have to spend this money on room and board? What's to stop someone from using this to save for a downpayment on a condo that they help their child upon graduation? Or for a car to help them get to school? Or for some other purpose? (I recognize the money is taxed in the child's hands upon withdrawal, but let's assume the child hangs on to the withdrawn money.)

And, if your child only does a one-semester program, can they pull all the money out at once? The government's RESP page is pretty vague.

I'm 19 and hold down a decent job, what should I do with my excess money?

aznhalf — Mon, 03 Apr 2006 13:04:16 -0800

I'm 19 and hold down a decent job, what should I do with my excess money? I live in the Washington, DC area and attend the University of Maryland on a full-time basis. About a year ago I picked up a job at fairly medium sized publically traded company doing grunt work(IT related). I got in good with a couple managers and our CIO and got elevated to a DMS administrator(with the pay that goes along with it).

All my school expenses are taken care of (through my undergrad years) through scholarships and money my parents had saved. This includes living expenses(other than the occasional meal out).

This leaves me with a good income and basically no expenses.

The first thing I did was pay off my debt (which wasn't much) and paid off my car in 3 month after purchase. Right now most of my money is sitting in my checking account, which I know is not the right thing to do. I also have 15 thousand in a CD that will be available to me in 2 months.

I'm a little nervous when it comes to investing in the stock market because I'm not sure I could let the money sit there for 5-10 years. While I don't have expenses now, that is sure to change!

I'm also reluctant to put money in a retirment fund at my age. Though I thought I read something about being able to use that money for purchasing a house later on?

Should I go the safe route and put money's in CD's? Or what other options do I have when it comes to safe investments for short term growth?

RESP...tell me what it means to me...

acoutu — Mon, 14 Nov 2005 15:34:23 -0800

CanadaFinancialFilter: What's the best way to invest in an RESP? My husband and I recently opened a no-fee bank RESP for our son. We plan to use the bank RESP until we have enough money to warrant opening a self-directed RESP. However, we know some people who have gone with "scholarship trust" plans. It sounds like these programs involve a bit of a risk, in that your child may not pursue four years of post-secondary education. My husband and I both have masters degrees, but we recognize that our children may not be interested or even suited to university. We want to make sure that the maximum amount of our contributions/interest/grants will be available for RRSP transfer, cash out or what-have-you, in the event that our children do not pursue post-secondary programs. We don't want our children to feel guilty or pressured about university, even though we think there is a strong likelihood that they will pursue some form of post-secondary education.

Canadian parents...what do you think the best way to invest in an RESP is?

how best to do recurring birthday investment for my god-daughter?

johoney — Mon, 14 Nov 2005 13:42:01 -0800

How best to invest $100 every year for my god-daughter...S&P, favorite stock, CD? I'm Irish living (temporarily) in the US, my god-daughter is French/Irish living in Paris. On her first birthday two years ago I started the tradition of giving her $100. Never got around to deciding the best investment...so for the moment she is receiving cash.

I am looking for a long-term accumulation of this fund that reduces the tax liability. I would also like not to have to declare this tax and suspect this can be done by reinvesting any dividend in the case of a stock or bond so that the tax is paid when she receives the money or sells the stock.

Perhaps this can be best done by investment schemes run by the French government?

Thanks a lot for any advice.

Is my no fee, no interest Discover card too good to be true?

SuperNova — Thu, 22 Sep 2005 14:17:48 -0800

I've always heard that something "too good to be true" usually is, so I'm a little skeptical about the Discover card I just got. Long story about why I got it, but I intended to cancel it immediately. Customer service assures me there's no interest for the first 6 months, no annual fee, and a cash-back rewards program. They'd be paying me to use the card. Does anyone use Discover, and is there a catch? I only have one other card, a secured Visa I got because I'm young and have no credit (and because credit is safer than debit, which I'd always used before). I pay it off every month. I think I'm far more responsible financially than most of my peers, so running up massive debt isn't in the cards, so to speak. What I am concerned about is using my Discover a lot to get the cash back then getting hit for more than I expected.

Bonus question--Since there's supposedly no interest for 6 months, I'm thinking about paying the minimum and keeping the rest in my ING Direct savings account (at 3.3% interest or so) until the intro period ends, when I'd pay it all off to avoid interest while having made a small profit in the meantime. I can't believe I can do this, but I don't know why it wouldn't work. Do you?