Where do you put the money you save? Savings account? Money Market? Certificate of Deposit? I have scrimped and saved a pretty big chunk over the years in hopes of buying a home, but it does not look as though it will ever be possible in this area (right outside of DC). So my cash is earning a small amount of interest in a savings account now but I probably need ot do something different with it. I have no debt and contribute 3% of my salary to my 401K.
Any thoughts? I am terrible at figuring all that stuff out....and its overwhelming to try to decide the best thing for me and the kids. I do want to set aside $ for their college, but at the same time I want to be able to enjoy my life right now.
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I love ING Direct. I keep most of our savings (about to be sucked to nothing thanks to housebuying!) in there and it earns 3.85%. I get $10 and you get $20 if you open up a new account with a link I send you, so lmk if you're interested.
It's online but linked only to your checking, so it's really safe. They have "sales" like now, if you put more in you get 4.75% on it until mid-April or something like that.
I had it drawing automatically from the checking account a certain amount every paycheck. It's great and you don't miss it that way. You're only allowed 5 transactions per month so you're not tempted to draw little bits out here and there. It's definitely not a short-term savings account kind of thing, yet it's much more accessible than a CD.
ING does have great rates on 6-month, 12-month, etc., CDs, too. I've also heard good things about Fidelity Bank.
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I just started using hsbc.com they had 4.25% interest, and just changed to 4.8%
There is a code to use when signing up and you get $25 free....have to keep the account at least 6 months.....I'd have to search to find but LMK if you need it and I will.
Plus ... you get an ATM card, good for an emergancy.
Con .... it takes 3 days to transfer money between accounts, so if you had lots $$$ you'd be loosing interest for 3 days.
I was using ing but switched when the rate went up at hsbc. LOL I don't have much so each little % helps.
ROTH IRA. If you are only putting 3% into a 401k, you really need to start up saving in another retirement fund, as well. A Roth allows you to pay the income taxes on the money now, but when you get the $$ out when you are 59-1/2 yrs old, it (and the earnings it makes) will be tax-free. AND Roths allow you to withdraw for education. Regular IRAs don't allow that, without penalties.
I could contribute more to my 401K - they match 100% for the first 3% of my salary, then 50% for the 4th and 5th % of my salary. So if I put in 5% they match 100% of 4%. Does that make sense? I am confused aboutwhich I should be doing first - beef up my 401K or save in a coolege fund. I definitely want to pay for my kids college vs. having them take out loans or work if at all possible.
Thanks for your help. I find this kind of stuff so confusing.
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