In a terrible economy, it is high time that the I Was Broke. Now I’m Not. team deliver ways to save money! This five part series will share the top five ways that we see people saving lots of money.
I believe that if you apply these five items, you will save over $1,000 a year. Don’t believe me? Try them out!
Part Four On-Line Savings Accounts
Do you have money in your savings account? If not, it should by your TOP PRIORITY. $1,000 as a minimum or $2,500 if you have kids or a house. I repeat – this should be your TOP PRIORITY!
For those with money in savings, how much interest is your bank paying you? If it is a local bank, it is likely that the interest rate is very, very, very low (close to 0%). On-line banks pay much higher interest because they do not have to pay the costs of maintaining local branches (people, buildings, etc). These on-line banks pay around 5X – 8X the national savings interest rates of other banks. I hold all of my savings in on-line banks and have done so for over two years now. They are FDIC-insured and are very easy to use.
There are several excellent on-line banks. Click HERE to see the on-line banks I use or recommend.
The bottom line is that your money should make you money – the most money possible. My on-line banks allow me to do that for all money that I plan on using within the next five years.
Wish I had listened sooner. Savings sat stagnant in a BOA Savings account paying 2/10ths of 1% interest. After reading your blog and getting a nudge from Mint.com I moved my most of my savings into an online Savings Account with E*Trade paying 3.01% interest. The impact will be about $1,200 more interest this year.
As Dave Ramsey would say, I paid the stupid tax for the past year.
I’ve also set it up to automatically draft $100/week from my BOA checking to my E*Trade savings. My savings account goes up and I don’t miss the $100 a week.
Paying myself first, after tithing of course!