First-off, it is usually pretty easy to find a bank that will give you a "free" checking account, especially if you are willing to sign-up for direct deposit. Don't pay for an account if you don't have to. Be sure to check out your local credit union, too. Sometimes they have the best deals. You may even find a bank that will offer free checks, etc. Shop around and don't be fooled by the "gifts" they offer if you open an account (a toaster, for example). Having a free checking account or free checks will save you way more oney in the long run.
Most banks have no fee to use their own ATMs, but some even offer a limited number (per month) fees or will reimburse you for a limited number of fees (per month) when using another bank's ATM. Make sure you understand the terms - for some banks, there is a specific "network" of banks in a program together where your fees will be forgiven while for other banks it may be for any ATM you choose.
Open a savings account for each child in your family and encourage them to put money away. This will teach them great lessons about sacrifice and hard work as well as saving. For very young children, any money they receive for birthday gifts should be deposited into the account immediately. We also have a giant piggy bank in my daughter's room in which we deposit our daily pocket change. When it fills up we deposit that money into her account. It's a great way to save without thinking about it.
In addition to opening the accounts for the kids, you might want to think about having a certain sum of money directly deposited or automatically transferred into thier accounts each month. Again...money you don't see (maybe $10 or $20 per month perhaps?) won't be missed.
Is there anyone else you want to save for? I've done this for my Goddaughter. I decided that when she is older I will want to be able to give her a significant monetary gift when she graduates/gets married/buys a home. Instead of worrying later where the money will come from, I opened an account in trust for her and started saving $10/month since she was little. I don't miss the money because it is such a small amount, and it will be saved and ready to go when we need it (plus it will earn some interest over time).
Nowadays, savings accounts don't earn that much interest. Although you may be required to open one, and keep a minimum amount of money in the account (mine is $5), consider opening a money market account. These generally act similar to savings accounts but will earn more interest.
A Certificate of Deposit (CD) at your local bank is an ideal way to save money and make interest if you have money sitting in an account that you're not currently using. This guarantees earnings and will typically earn more interest than a saving account. You're in a great situation if you're saving a chunk of money for something specific and know what the timeframe will be (when you will need the money). If you have money in a CD or have money to put in CD's at the bank, here's another tip...
Distribute money in as many accounts as you can (maybe in $1,000 increments), staggering their maturity dates. You won't have a large chunk of money stuck in a low-paying CD should interest rates increase, and you lock in the higher rates on some accounts if interest rates decrease. Another benefit - should you have to tap into the CD before it's maturity date, you can close a couple small accounts if that's all you need, instead of closing one large account (this will save you money when paying the penalty).
Have a birthday or holiday coming up and don't know what to get for someone? Think about getting a savings bond. You will pay half the face value (a $50 bond will cost you $25). These are especially great for kids because they will need to wait a while in order for it to earn interest. Again, this is guaranteed earnings...the recipient will at least cash in for the amount you paid, or more if they don't cash it immediately.
Perhaps most imprtantly, be aware of how your accounts are set-up. If the account is for a child, be sure the account is "in trust" for that child and that YOU (and your spouse or maybe that child's parent) are the trustees. This means the child does not have access to the account (cannot withdraw from the account) but you can, and should anything happen to you, the money will go to that specific child.
Also, be sure there is more than one name on all your accounts. It is best for husband and wife (or child and parent) to have each other's names on all accounts, even if the accounts are used separately. This will come in handy should someone pass away, the money will not go to probate court - where the spouse (or parent or child) will need to fight for it. Since thier name is already on the account, they will have access to it.
No comments:
Post a Comment