Savings accounts question
Does anyone have any recommendations for savings accounts?
Any idea on how to start saving when on a budget too would help. I am thinking I need to start saving a few hundred a month even though I have some credit card debt. Is it better to pay that off first before saving? I just think I’d feel better if I had some savings.
I started a savings with ING recently. It does, like you said, have a good interest rate. I liked the fact that it was a very small minimum to start, as opposed to some accounts.
CapitalONe advertises on these online banners about a direct savings also, which they say is 5.00%. But I don’t know any other details about it. Also, HSNB (Household) has an online savings, too.
I like ING very well. No complains, only praises. This is a good place to start for a savings account. You can also try emigrantdirect.com, which is one of ING’s competitors. Both offer high interest rates and are easy to start online; they sometimes offer promotions, like $25 for opening an account. Check them out and see. Just don’t get tempted to keep moving your money from one bank to another, chasing the higher rates. It’s just not worth the effort.
If you have no savings at all, you should definitely start building up a cash reserve for emergencies, even if you have credit card debt. Give yourself a modest goal to start, say $1000. Then get in the habit of paying yourself first, that is, having a set amount (it can be small $10, $25, or $50) automatically deducted from your paycheck or checking account after each payday and put into your savings account. (Both ING and Emigrant offer this feature, called automatic transfer). Only use the savings for emergencies that require a lot of immediate cash, such as if your car breaks down or the refrigerator goes on the fritz. Once you reach your goal, celebrate! Then shoot for the goal of building up 3 to 6 months of living expenses. When you achieve that, you’re really on your way to true financial freedom.
As for the credit cards, pay the monthly minimums on all of them, but additionally pay as much as you can on the one with the smallest balance first. After you pay that one off, continue paying the same amount you paid to the paid-off card, but apply it to the one with the next highest balance. That way, you are paying a higher and higher amount each month to a single card, effectively “snowballing” your debt payments until you get the cards all paid off.