Over the past few days Mrs. PT and I have been talking about starting to save for the down payment on our next house. I’m of the opinion that housing prices will remain at bargain levels for at least another year. Being of that opinion, I need to get my savings in gear sooner, rather than later. Also, we’re starting to think about Christmas and a vacation this winter. Both will be expensive, and we don’t want to have to finance these purchases using debt. So, let the saving begin.
With those goals in mind, today I decided to open up more individual savings accounts at ING DIRECT. I already had a savings account there, but it’s our generic emergency savings account. I don’t want to just start dumping all our different savings funds into the same account. It’d be nice to have them all in their own unique accounts. Plus, I prefer an automated system vs relying on me and my discipline. Luckily, ING DIRECT allows for multiple account setups, and they allow you to name them individually. Here’s how it works:
Step 1. Log in to (or sign up for) your ING DIRECT savings account. Note: I just recieved some more ING DIRECT $25 bonuses. Feel free to use one to open your account.
Step 2. Look for the “open another account” button.
Step 3. On the next page, select “Orange Savings Account”.
Step 4. Next, you’ll click the big “Open Now” button.
Step 5. Select how you’d like the account to be opened: single, joint, living trust, living trust – joint. Note: to set up a new joint account you’ll need the joint owner there to provide his/her login credentials.
Step 6. Finally, you’ll need to give the account a nickname (that’s the fun part), and decide where you’ll initially fund the account from and for how much.
That’s it!. You’re all set up. Here’s how your new account home page might look:
There are obvious advantages to setting multiple accounts up like this. We all have different savings goals and this account structure will allow you to log in to your account at ING DIRECT and instantly see how you’re progressing towards each of your goals. You might even like to nickname your accounts something like “Christmas Fund 500″ to remind you that your goal is $500.
So what do you think? Are you using this method already? Do you find that it helps you reach your goals easier? Or do you prefer to have all your savings in one account?
This post comes from my friend Jon, co-owner of FocalPoint Cinematic Weddings. Jon sees a ton of weddings each year (both cheap weddings and extravagant weddings) as a Tennessee Wedding Videographer. I was excited when he agreed to share his thoughts on smart ways of keeping wedding costs down.
There is no getting around the fact that a wedding can be a big financial decision. At the end of that glorious day, someone foots the potentially large bill. No one wants to have a truly cheap wedding. But here are a few ideas that can help you make smart decisions about wedding costs:
1. Decide on an overall budget, then set a priority list and assign a budget for each item. There is an almost infinite amount of possibilities for the smallest to the largest details of your wedding. Divide everything into “must haves” and “maybes”. It’s okay to make a large list, because you might spend a little less on one item and as result free yourself up financially to afford another priority item.
2. Do-It-Yourself when possible. Make creative centerpieces or decorative frames by visiting your local hobby and craft stores. For our wedding, my wife’s mom was able to find half price candles and fabrics, which provides savings that can certainly add up over time!
3. Start early! Most costly decisions in life come from a place of last minute desperation. You do not see any other option around spending the big bucks so you give in. Wait for a sale and/or haggle. All they can say is “no.”
4. Think used. There are so many websites for brides that include forums for brides to talk and plan. In many forums, there are typically classified sections where good deals can be found. I know what you are thinking, “I’m not wearing a used wedding dress!” Maybe not, but what about “used” set of vases that could save you $100? That’s what I’m talking about peeps!
5. Look for wedding vendors on the cusp. You don’t have to pick the vendor that has the most expensive marketing campaign, but look for vendors who don’t know how good they are yet. Let the products themselves determine how you perceive their value!
If you or someone you know is planning a wedding soon, be sure and send them these tips using the social buttons below. For more ideas, see PT’s old post, Frugal Ideas for a Wedding.
I couldn’t pass up the chance to share one FocalPoint’s videos. Here’s just a sample of the amazing work they do:
In sort of a carry-over from Friday’s Keep Investing Simple post, I was thinking this morning about what’s most important with personal finance. There’s a ton of information here at Prime Time Money. But if someone were to visit this site just once and never learn any more about personal finance, what’s the stuff I’d want them to take away? I’m not talking about philosophies or ideas. I’m referring to specific steps. What are the specific, simple steps everyone generally needs to make to make sure their financial house is in order. Here’s what I came up with (feel free to add more):
Don’t Carry High-Interest Consumer Debt – If you’ve got this kind of debt on a credit card or personal loan it’s costing you. Therefore, it’s a good move to try and get rid of it ASAP. If you ever have to use credit cards to finance something, make sure you pay it off completely before the end of the month.
Avoid Future Debt by Saving Money in a High Interest Savings Account – So that you don’t have to go into debt in the future because of an unexpected (job loss) or expected (vacation) expense, set up a free savings account at one of the online high-interest savings accounts and set aside some money every month. Do this automatically and it will be easier.
It’s Important to Get Term Life Insurance – If you’ve got people dependent on your income (and they will be for quite a while) it’s likely a good idea to get life insurance on yourself. Term life insurance is the best choice for most people. You can get an adequate policy for less than the cost of your cell phone plan.
Open up a Tax-Advantaged Retirement Account - Saving for retirement has never been easier. There’s plenty of good options out there to help you achieve retirement savings success. Most people have a 401k they can contribute to. Contribute enough to get your employer match every month. If you don’t have one, open a Roth IRA and begin automatically contributing. Shoot for the max every year. Like short-term saving above, this works best if you set it up automatically.
Know Where Your Money is and Where it Goes – At least once a month, take some time to review all of your checking, savings, and retirement accounts. Also review your credit and loan accounts. Do this all at once using a tool like Quicken Online. Also, you might want to make sure all your credit accounts are in good standing by reviewing your credit reports for free at AnnualCreditReport.Com.
That’s about it. I think if you only did those things you’d be in pretty good shape when it comes to your personal financial situation. What do you think? Did I miss anything that’s most important?
Here’s some of the better articles I’ve read in the past week:
Need some more stimulus money in your pocket? Obama’s adviser is pushing for a second Obama administration stimulus. Laura D’Andrea Tyson, one of his economic crisis panelists is stating that Obama should create a second stimulus because the first one wasn’t big enough for her liking.
Obama’s initial stimulus, which was technically this recessions’ second stimulus, gave us each $13 more dollars a week. Bush rolled out the first stimulus back in early 2008, which gave us the one-time stimulus check of $600 or $1,200.
Even Warren Buffet is weighing in on the issue of a second stimulus, saying “I think that a second one may well be called for.”
I’m not positive more spending is the answer at this point. I do, however, think that a one-time payment has more of an impact on every one’s personal economic psyche that the Obama stimulus, which essentially amounted to a tax break given out over time.
At this time there is no real plan to give out a second stimulus, just chatter.
Over the weekend, the President did combat all the second stimulus talk with a “let’s wait and see” approach. He said “the $787 billion stimulus program must be given a chance to work before consideration is given to a second such jolt for the still-ailing economy.”
So what does this mean for you? Will you get another stimulus check in your hands soon? Will you get more stimulus tax cuts? Will you get anything? Do we need another? At this point, it still seems like a waiting game. I’ll let you know as soon as I hear more.
Investing can be complicated if you let it be. There’s a million different concepts, strategies, and funds to think about. And that’s okay for some, but not for most. Most people are turned off by investing and never really get into it because of the multitude of choices. With that in mind, I’m providing some simple information to help you frame your approach to investing.
The way I see it, there are two types of investing you can do:
Tax-Advantaged – This is where you should focus your attention. There’s more than enough options in this area to have you set for retirement and have your kid’s college paid for, all while reducing your taxes. Keep things simple and focus on investing here.
Taxable – This is the area of investing that should take a back seat for most people. Only go here if you’ve exhausted all options above. If you do invest in this area, please don’t use money that could be securing your retirement or your kid’s college.
Again, that’s just my take on things. I’m sure there are people who could argue against it. To me it’s just the simple way to approach things. Here’s more…
Tax-Advantaged Investing Specifics
Whether they know it or not, most people are already doing tax-advantaged investing through their 401k. This is great! However, even more tax-advantaged investing can be done through a Roth IRA (which uses after-tax dollars, and earnings are tax free if withdrawn after 59 and 1/2).
This approach will help you avoid taxes now and in the future. The government, via the IRS, is trying to encourage you to save for your retirement so you won’t simply rely on Social Security. That’s why we have these types of accounts. And that’s why most of these accounts come with stipulations about leaving the money where it is, for it’s intended purpose.
A Roth IRA can be opened at a bank or at an investment firm. I recommend Vanguard. They don’t have minimums on their accounts and their funds are some of the cheapest in terms of fees. If you don’t have one of these, please go open one today. Just do it and get started. It’s really simple.
Taxable investing is taking your after-tax dollars and investing it without a tax-advantaged account. Simple, right? The key thing to remember here is to only invest money here after you’ve exhausted your options in the tax-advantaged areas. These investments will be taxed before you put the money in and the earnings on the investments will be taxed.
Taxable accounts can be opened up at the same places as tax-advantaged accounts, at banks and investment firms. But the best places are the one’s who’ll let you trade cheaply, since you’ll theoretically be doing that more often (because of no limitations by the IRS). These are places like eTrade, Scott Trade, Zecco, Sharebuilder, etc.
More Information
There’s obviously more to investing: what to invest in, proper asset allocation, etc. But the above should hopefully give you an initial framework when trying to decide which direction to go with your investing. Maybe next week I’ll tackle the subject of different funds and asset allocation.
So what’s your take? Is there ever a reason to go with a taxable account first?
Here’s a great bonus deal from WTDirect. They’re one of my top high-interest savings accounts. For a limited time, if you’ve got the free cash, you can take advantage of this bonus offer.
WTDirect is offering a cash bonus of up to $150 to customers who open up a new savings account. They have an interest rate that is currently one of the best. Apparently, this offer is not going to be around very long, so open an account today.
Here’s how it works: Simply apply online for a WTDirect account, deposit $10,000 or more by July 31st, and keep your funds on deposit with WTDirect through October 31st.
You’ll earn a cash bonus of up to $150 based on the following schedule:
$150 bonus for a $50,000 balance
$100 bonus for a $40,000 balance
$75 bonus for a $30,000 balance
$50 bonus for a $20,000 balance
$25 bonus for a $10,000 balance
Based on my crude calculations, this bonus, combined with the current APY for the savings account, could provide an annualized return over the next three months of close to 3.00%. Not bad.
I thought I’d take today to review the 2009 retirement contribution limits to encourage you towards your retirement savings goals for 2009. We’ve reached the mid-point of the year. Can you believe it?
After looking back at my own savings goals for 2009, I’m feeling pretty good about things. Still, I need a reminder to stay focused on the end goals. Here’s a list of the 2009 IRS retirement plan contributions limits…
Keep in mind, some of these limits have “catch-up” type rules which allow folks over the age of 50 to contribute more. Also, remember that some of these limits are capped by income thresholds. Check out the IRS website for more information.
Still Time to Go for the Max
Okay, let’s say you haven’t yet contributed to a retirement plan this year. No worries. You’ve got a while to contribute, so get to it.
For your 401k, you’ve got till December 31, 2009. That leaves 6 months, or 12 paychecks if you’re paid bi-weekly. If your goal is to max out, you’ll need to put $1,375 per paycheck towards your 401k. That’s a lot, but I know there are some readers who could make this happen.
For a less daunting goal, try maxing out the Roth IRA, an retirement account that uses after-tax dollars, but allows your savings to grow tax free. Your limit is lower ($5,000), and you actually have longer to contribute. With an IRA you’ve got until you file your 2009 tax return in 2010. If you file as soon as you get your W-2’s, then make your end goal January 31, 2010. If you wait until the last minute to file, then maybe set March 31, 2010 as your end date.
Similar to the calculation for the 401k, take the IRS limit, in this case $5,000, and divide it by the number of paychecks you have left. If you’re shooting for January 31, 2010, and you’re paid by-weekly, that’s $358 per paycheck. Not too bad. Most two income families could likely do this.
So what do you think? Can you do it? I’ve found it to be easiest to save when my savings are automatically deducted from my paycheck, before I get to spend it. So, as I always say, head over to your human resource or payroll department today and set it up. But first, read how to open a Roth IRA for the first time.
Retirement savings is important, but there’s a whole lot more to getting your financial house in order. If you’re up for a bigger challenge read my mid-year financial check-up series. Good luck.
Have you been hearing all the buzz about the Cash for Clunkers or Car Allowance Rebate System (CARS)?
“How would you like to trade in your old gas-guzzling clunker and get $3,500, or even $4,500 cash to buy a new one?”
Well, the cash for clunkers stimulus programdoes just that. Although, the jury is out on whether the program will actually help individuals, the auto-industry, or the environment. One thing is for certain, your tax dollars (approx. $1 Billion) are involved, so it’s a good idea to know the details.
Cash for Clunker Bill (now Car Allowance Rebate System)
The cash for clunkers legislation was signed into law by President Obama on June 25th, officially as the Car Allowance Rebate System (CARS) to be administered by the National Highway Traffic Safety Administration of the U.S. Dept. of Transportation. Here’s a pdf of the C.A.R.S. Law.
Cash for Clunkers / CARS Details
Essentially, you trade in your less fuel efficient vehicle and get a credit towards a new, more fuel efficient vehicle. Key points to note:
Rebates range from $3,500 to $4,500, depending on the type of vehicle you trade in.
The vehicle you are trading in must be less than 25 years old on the date of trade in.
It has to be a new vehicle you are buying or leasing.
Both vehicles can be either domestic or foreign.
Your trade-in (clunker) must get 18 or less MPG (with the exception of some vehicles)
You must have owned, registered, and insured your trade-in (clunker) for more than a year.
The dealer you buy the new car from will handle all of the details.
The Cash for Clunkers program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
Your trade-in (clunker) will be destroyed. So, the dealer will only give you scrap value for it, above and beyond the CARS credit.
How to Apply for the Cash for Clunkers / CARS Program
The cars.gov website makes it fairly easy to understand how the Cash for Clunkers / CARS program actually works. They detail the process in the chart:
You’ll first need to visit cars.gov for information on the program. I guess this is here so they don’t have any unqualified folks applying to the program.
Your next step is to find your car.
Once you have your new car picked out, bring the paperwork showing you’ve had the clunker (to be traded in) for at least one year. This includes the title, registration, and insurance.
The dealer will then handle the submission of the paperwork to NHTSA.
NHTSA will then review your paperwork and ensure the purchase meets the Cash for Clunker program requirements.
Lastly, 10 days after you turn in your paperwork, the NHTSA will issue a credit to the dealer. This being the case, the dealer will likely sell you the new car and make the trade prior to getting full approval, giving you the credit before they receive it.
Who to Contact for More Info
If you’d like to know more about the program, be sure and visit the website at www.cars.gov, or call the hotline at (866)-CAR-7891.
I am NOT a finance professional and no content within this website should be considered financial advice. Please consult a certified financial expert before attempting any of the ideas described in this site. Please read the disclaimer for more information.
Welcome to PT Money!
Hi, I'm PT. No, I'm not a millionaire ...yet. But I have a big desire to help you learn to live a limitless financial life. more...
Investing can be complicated if you let it be. There’s a million different concepts, strategies, and funds to think about. And that’s okay for some, but not for most. Most people are turned off by investing and never really get into it because of the multitude of choices. With that in mind, I’m providing some simple information to help you frame your approach to investing.
