My Pocketful of Thoughts

Happy first day of March 🙂  Its bananas how the time always seems to fly!  Here we are in the third month of the year and if feels like just yesterday we were celebrating the new year and trying to decide what our resolutions should be.  Take a moment if you haven’t to reevaluate your goals and see how far you’ve come in these past two months.  You might be in for a sweet surprise.

Last Monday I talked about how to prepare yourself for all the things that come at you unexpectedly, big or small with an emergency fund.  If you didn’t have one, and I did not fire you up enough to start one, today is a new day.  Unless that is, you were waiting to see where to put that money, today is your lucky day.

Years ago I did the research to see what was a good fit for me and what I needed.  There were four things that I looked at to see where I was going to put my money for the emergency fund.

1. Will the new account make more money for me than where my money is currently?  Every account has a certain APY(Annual Percentage Yield).  I had always kept my money in a passbook savings account at my local bank, until i asked this question. The APY on that account was less than 0.25%.  I remember when i would update the passbook, my interest earned would never go over 11 cents.  Now I didn’t have thousands of dollars in there, as I was always just starting, it seems.  Money always came in and out.  Part of that was its accessibility.  
2. How accessible is the money?  I personally know how tempting it is to finally see your savings start to grow and think to yourself, hmm what if I got that jacket I really wanted.  Its on sale and I could always use the jacket…Yes I think I need that.  Ok, so maybe a jacket is not the greatest example.  My point is that there will always be something that will come up that you’ll talk yourself into thinking that its a NEED and NOT a WANT. The passbook account was super accessible.  A short walk down the street and in no time I could deduct the amount that I needed. That for me was an issue.  That is not to say that I have NO self control, but making it harder for myself to access the money meant that I had to reevaluate my thoughts.  Is that really a need or a want?  I looked for an account that was a little more work to access, but one that would get me my money in a reasonable amount of time.
3. Is there a minimum balance? Some accounts require you to put in a minimum of $50, some more, some less. I started my emergency fund with $5.  It was what I had at the time and it was what I could live with not seeing.  As you continue to get a hold of your finances and pay things off, you can continue to raise the amount you put in there.
4. How reputable is the bank holding your money?  It is always a good thing to ask around and research where you put your money?  Ask friends and family who they hold their accounts with, or if they know of anyone who speaks highly of their account. 

The answers to all my questions led me to open an account with ING.  However, my needs are not your needs, so I have included the names of some sites to help you along in your research.