Are You Saving Enough In Your Thirties?

July 14, 2017 By laurasomewherelse in Grab Bag, Money Tags: ally bank, barclays savings account, emergency fund, emergency savings, goldman sachs savings account, gs bank, saving in your thirties, Savings Account, Suze Orman, synchrony savings account, thirties, Thirty 4 Comments

Multiple friends recently asked me about savings accounts- the best places to have them as well how much to save. A few optimistic questioners asked if there were places where 5% or 10% in interest exists- or even more.

I’m sorry to let anyone down, but as of this moment, there are no magical savings accounts that will give you 5%+….or even 2%+. Not for regular savings accounts anyway. I wish there were.

If you want to withdraw your money anytime anytime in the near future, which is what emergency savings accounts are for, you need to have an account where your money is easily withdrawn. Other types of savings vehicles, such as CDs, (which are savings vehicles that let you leave your money in for a long time (not for emergencies)), used to promise at least a decent interest rate in exchange for locking up your money for years, are now offering paltry returns way below 2% (not worth it).

However, even though savings accounts today aren’t what they used to be, you should still have one. Here’s why. What if you have a medical emergency, or a major repair in your household? Or what if you suddenly lose your job or, god forbid, get hit by a car and become disabled? There are all kinds of money emergencies that come up out of nowhere. You need to be able to have some money to draw upon so you don’t become debt-ridden or bankrupted by a surprise expense. That’s where the emergency savings account comes in.

Financial experts disagree on exactly how many months of income you should aim to put away, but the responses average around 6 months, with more conservative experts, such as Suze Orman, advising 8 months of income in an emergency fund. So whatever you make a month, post-taxes, multiply by anywhere from 6 to 8, depending on how safe you’d like to be. That’s the goal for your emergency fund.

So if I make 3,000 a month after taxes, and I want a 6 month emergency fund, I should have $18,000 (3 x 6 =18) saved that I’m not touching to go get my nails done or go see Hamilton in the center orchestra. That money is for emergencies.

Now, your emergency fund should not be invested in the market or in real estate or in anything- it should be ready to grab at a moment’s notice. So where SHOULD you keep your emergency fund?

The people who asked me about savings accounts were currently keeping extra money in their banks, where it was making something like .003% interest. Now that’s REALLYYYYY low, even in the land of savings accounts. So below are places where you can currently get 1%- 1.20% interest on your savings, as of July 14, 2017. Here are the top ones from my research:

GS Bank (Goldman Sachs), which is at 1.20% right now. They’re online only, which is fine with me, and they’re what I use. You can start an account with as little as $1. Here’s the link to GS.
Syncrony is at 1.15% right now. They’re also online only. You can start an account with as little as $1. Here’s the link to Synchrony.
Ally is at 1.15% right now. Online only, and very popular.You can start an account with as little as $1. Here’s the link to Ally.
Barclays is at 1.15% right now. They have some branches if you link brick and mortar as well as online. You can start an account with as little as $1. Here’s the link to Barclays.

I get no commission from these links (I wish)- they’re just the best places to save based on the research I’ve done.

So, if you have absolutely nothing squared away for savings, never fear- just start right now. Whenever you get a paycheck, take 5% (or even 10% if you’re feeling ambitious) and put it into a savings account. Automate this if you can- I swear you won’t miss it!

Aim low at first. Try to get to $1000 to start for emergencies- that’s wayyyy better than nothing. Then build up. I haven’t personally hit my 6 months emergency savings account either, but I’ve begun.

I swear, with savings accounts, starting is usually the hardest part. But then you’ll be SO happy you have a buffer.

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What the Heck are Fixed Index Annuities? (And are they a good idea for retirement?)

June 6, 2017 By laurasomewherelse in Money Tags: 401(k), annuities, annuity, annuity scam, compound interest, Dave Ramsey, fixed annuity, get rich slowly, IRA, j.Money, jd roth, lifetime annuity, money master the game, Ramit Sethi, Retirement, Roth IRA, Suze Orman, thirties, Thirty, tony robbins, variable annuity 2 Comments

One of the ways I fall asleep at night is by reading nonfiction books. I like these books, don’t get me wrong, but they still don’t totally suck me in and keep me awake like fiction books sometimes do. Usually, as I’m in bed reading my nonfiction book of choice for a few minutes, my eyelids get heavy and I drift off. It’s a very effective, as well as instructive, bedtime routine.

For quite awhile, my nightly book of choice has been Tony Robbins’ Money, Master the Game. I’m a big Tony Robbins fan, as I enjoy his motivational talks and writings, and was extremely excited to see that he’d written a book on finance- one of my favorite topics.

I devoured a lot of the beginning of the book (which got me through quite a lot of bedtimes as the book is 638 pages long). I really enjoyed most of the way Tony Robbins was trying to make finance information accessible to everyone, and he even included interviews with finance experts I loved such as Jack Bogle from Vanguard. A bulk section of the book was concerned with savings accounts and starting a retirement account, as well as the magic of compound interest- I love these subjects. These are some basic money topics to me, but I enjoy being reminded, and many people don’t understand concepts such as compound interest, which Robbins makes easy.

However, somewhere in the last third of the book, I got lost. The subject of Fixed Index Annuities came up and stayed prominent for many, many pages. Robbins was touting how great annuities are, and how the right annuity would bring you retirement income for life. I was extremely confused and started thinking “how have I not heard anything about any kind of annuity from any finance blogger or writer or podcaster ever before?” I was baffled. For years, I’ve listened to the podcasts and read a few of the blogs and books of some quite entertaining and well-known finance professionals including Suze Orman, Dave Ramsey, Farnoosh Tohlrabi, J. Money, Shannon McLay, Ramit Sethi, Paula Pant, J.D Roth, and more. I couldn’t remember any of them ever suggesting, or even bringing up, annuities.

I actually reread the entire 638 page book (it’s a break from my other favorite bedtime book, The Elegant Universe), and once again attempted to understand Robbins’ take on fixed annuities, but to no avail.

In the back of my mind, I associate annuities with scams. But Tony Robbins was so convincing in his book, even talking about how variable annuities are the actual scams, and fixed annuities are the good ones. So I thought maybe I had missed something. And, in the interest of this blog, and for my own personal pleasure (I have some weird pleasures), I looked everything up, paying special attention to my favorite finance experts and finance news sites, including Forbes and Suze Orman, to see what they had to say.

Basically, without going into the extremely complex and intense detail, my hunch was right. Unbiased (i.e non-commission-based) finance professionals almost never recommend annuities- unless they’re still somehow trying to sell you something…like an annuity. There are very rare circumstances in which SOME annuities would kind of make sense, but those circumstances generally affect people in one of two categories:

If you have an extremely high income and have maxed out both your 401k and IRA and want to try putting tax deferred money elsewhere.
If you are extremely, incredibly risk averse and would rather have complete peace of mind that you will have some money while alive than a good rate of return. Because the odds are against you that you’ll have more money for yourself and for your beneficiaries (spouse, kids, etc) with an annuity than with any other retirement strategies (401ks, IRAs, Roth IRAs, etc).

Otherwise, low cost index funds in IRAs, Roth IRAs, and 401ks are significantly better retirement options, with much better rates of return and way lower fees.

Again, without going into numbingly complex details, the issues with most annuities include:

Most people selling them stand to make a major profit off of you, and may not inform you of the other retirement options you have. So there can be quite a bit of shadiness in the annuities business because of the high commissions paid out.
Your money is tied up for a very long time, and you will pay major fees if you try to take it out early! These fees can range from 10% up to 20%! So even if you purchase an annuity for $50,000 and in a month you change your mind, you can’t get that money back without getting hit with a ridiculous fee. About $5000 (10%) will already have been removed from your 50k as a commission fee to whoever sold you the annuity! Plus you’ll get hit with that major fee for early withdrawal, so your $50,000 can possibly become only $38,000 in the span of only one month!
If you die early, your beneficiaries can get absolutely nothing! The one major benefit of most annuities is a guaranteed monthly income for life, until you die. So if you live a VERY long time, you may somewhat benefit from an annuity. But an annuity is actually a life insurance product, and the companies are banking on you dying earlier rather than later- because if you die early, in most situations, the rest of your payout is their’s to keep! And even if you find an annuity that leaves your money to your beneficiaries (which will of course be pricier to begin with), the beneficiaries will have to pay taxes on all of the interest your money made! So if your original 50K grew to 150K, your beneficiaries will have to pay taxes on the difference- that means paying taxes on the 100K difference!! That’s a huge tax bill!

So, I’m sticking with my classic retirement strategy- the Roth IRA, filled with low cost index funds from Vanguard. I write about Roth IRAs and how to set one up here. And although I enjoy Tony Robbins’ advice and greatly respect him, I’m not planning on taking any of his advice on annuities.

If you want more information on annuities, here are some of my sources for this article:

The Motley Fool annuity advice

Suze Orman explains annuities

Time Magazine’s advice about annuities

Forbes talks in detail about annuities

Get Rich Slowly shares annuity knowledge

As always, feel free to ask me any questions. I’m just learning about this topic myself, so I’d love to hear your thoughts! Thanks!

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Some Awesome New Finance Experts I’ve Been Following

October 11, 2016 By laurasomewherelse in Money Tags: Afford Anything, affordanything.com, budgets are sexy, Dave Ramsey, farnoosh torabi, finance podcasts, j.Money, npr, optimal finance daily, Paula Pant, planet money, so money, so money with farnoosh torabi, Suze Orman, the dave ramsey show, the suze orman show, thirties, thirty-something finance Leave a comment

After Suze Orman ended her amazing finance show (which I always listened to as a podcast) about a year and a half ago, I realized that almost everything I knew about finance I’d learned from Suze Orman. And I didn’t know what to do without her.

I still had Dave Ramsey’s podcast, which always amused and humbled me (he sometimes speaks to really down and out (aka completely broke) people who call in…and he always has pretty sound advice, even when I don’t consistently completely agree with him (he can get very religious). However, one of his best quotes is “you can’t fix stupid,” which I absolutely agree with). Another podcast I listened to was (and is) NPR’s Planet Money– which is a great podcast about money topics- but is more an exploration of economics in our lives than a ‘money advice’ show the way Suze Orman’s was.

In the past few months I’ve discovered some cool new finance advice podcasts (as well as bloggers…many of the podcasts are from bloggers that have decided to start podcasts). Nothing replaces Suze Orman, who had a distinct voice, but a lot of these are very good. If anyone wants some good and relatable finance podcasts and blogs for complete novices, here are some awesome recommendations:

http://www.budgetsaresexy.com – J.Money’s refreshingly honest and totally down to earth financial blog. I’ve never read a finance blog that’s as open and genuine- J. Money tracks every dollars he has and he will give you exact numbers including his net worth, his retirement savings, his mortgage paid, and much more. He writes articles with titles like ‘What I’d Like to Teach My Dumb-Ass Tenants About Money.’ This blog is fantastic for anyone who doesn’t come from a finance background and just wants to understand all the basics a more, from someone who’s ‘just like you.’

http://affordanything.com/ – The Afford Anything podcast (which used to be called the Money Podcast) got me turned on to budgetsaresexy.com because J.Money (of budgetsaresexy) used to be the co-podcaster. However, he has since left the podcast, and his co-podcaster Paula Pant has renamed the show after her website: affordanything.com. Both the podcast and the website are really inspiring and useful – Paula Pant is in her early thirties and is completely financially independent and never really has to work again. She still works, though, and explains why in both her podcast and on the blog. Listen to the podcast from the beginning to listen to her and J.Money co-host together. They’re a great pair. Paula talks a lot about real estate and has made her fortune from it, so if that interests you, this is an extra good one (but it’s a good podcast even if you’re not into real estate- I’m not.)

Optimal Finance Daily – This is a cool podcast because each episode is a part of a different well known finance blogger’s blog- read aloud by the podcaster Dan Warren. It’s a great way to get familiar with lots of different finance bloggers – plus each episode is only around 8 minutes- so super easy to listen to!

So Money with Farnoosh Torabi – Farnoosh’s podcast is superbly edited and makes the listener feel taken care of (the way Suze Orman’s show always was). Farnoosh’s podcast is great to listen to because she’s a money expert interviewing other money experts! Super clear financial advice, and a very inspiring show as well.

Hope you enjoy some of these. As always, let me know what you think!

Is a 0% Interest Credit Card Just a Blatant Lie In a Pretty Package?

September 1, 2015 By laurasomewherelse in Money Tags: 0% interest, balance tranfer, credit cards, deffered interest, dollars, fees, finance, Money, podcast, Savings, Suze Orman, thirties, waived interest, zero percent interest 1 Comment

Oh my god!! A zero percent interest credit card?? Does that mean I will have unlimited money and can buy whatever I want forever in my thirties? And then I can simply pay money back super slowly until I die…. interest free?

Short answer: no.

Long answer: no.

I mean, come on.

I was listening to reruns of The Suze Orman show podcast the other day (it has sadly gone off the podcast air this summer) and a few people mentioned using a zero interest credit card and asked Suze for her advice.

I remember the first time I heard about zero interest credit cards. I thought to myself “what the heck is a zero interest credit card? Why would card issuers would give someone money interest free? In what way would credit card companies benefit from this?”

Here’s a simple answer: zero interest offers always expire. And card issuers almost always benefit.

Here’s another simple answer: zero interest credit cards are usually a bad idea for the consumer. And then card issuers benefit.

Here’s why:

Let’s start with the way zero interest credit cards work:

There are two different kinds of zero interest credit cards: deferred interest and waived interest.
For both types of 0% interest cards, the 0% interest rate only occurs for a certain period of time (say, 6 months) and then expires.
For both deferred and waived interest cards, after the 0% interest rate expires, the new interest rate is EXORBITANT- more than almost any other type of credit card. It could be as high as 26%, which is basically highway robbery.
A deferred interest card is VERY bad, and a waived interest card is not much better. Here are the differences between the two:

a) For a DEFERRED INTEREST 0% interest card, interest is actually accruing during the special 0% promotion period (that certain amount of time I mentioned above when the card is still zero percent), but it’s being deferred. So if you buy something on a 0% credit card that’s 0% for 12 months, interest occurs during those 12 months. but you won’t have to pay it until month 13. If you pay off your original purchase by month 12, you never have to pay that interest. But if you haven’t fully paid off your purchase by month 12, you get hit with THE FULL YEAR OF INTEREST CHARGES!!!

So lets say you bought a $1000 bed on a 0% interest credit card that is deferred for 12 months. Let’s say that card has a deferred 23% interest rate. This means that about $20 in interest is adding up on your card every month. You won’t have to pay any of that interest for those first 12 months, but the card company has a record of it. If you pay off that bed within 12 months, you’ll never have to pay the interest. But if you just pay the minimum every month, the SECOND those 12 months are up you’ll be hit with a $240 deferred interest bill PLUS interest will continue accruing on anything you didn’t already pay off!! At a whopping 22% a month interest rate! This is terrible.

b) For a WAIVED 0% interest rate, lets say you bought that same $1000 bed on a 0% interest credit card that is waived for 12 months. Let’s say that card also has a waived 23% interest rate. This means that for 12 months no interest is accruing on your card. If you pay off that bed within 12 months, you’ll never have to pay any interest. But if you don’t finish paying the bed off, the SECOND those 12 months are up you’ll be hit with a 22% a month interest rate! This is pretty bad, though not as bad as the deferred card.

Credit card issuers count on you being dazzled by the zero percent interest rate and simply impulse grabbing one of their credit cards to make a big purchase. Don’t fall for it!! You’ll likely end up paying way more in the long run!

And if this hasn’t yet convinced you not to get a zero percent interest card, here are two more evil tricks 0% interest card issuers may be playing on you:

For some 0% interest cards, if you’re late to pay or miss even one payment, the 0% interest offer is negated, and you’ll end up having to pay interest right away- before the 0% promotional period is even up! And it’ll be higher than other credit cards!
Also, on some 0% interest credit cards, the 0% offer is only good for the first major purchase, and not the purchases thereafter. So if you continue using that 0% card, it won’t be zero interest anymore for anything other than your first purchase!

Read the fine print on 0% cards. And of course, if you can, avoid purchasing things that you couldn’t afford without a credit card anyway. A lot of times when it comes to interest rates, credit card companies are selling you very blatant lies wrapped in very pretty packages.

Have You Automated Payments By Your Thirties?

July 26, 2015 By laurasomewherelse in Grab Bag, Money Tags: automate, automatic payment, Bank, bank account, cable, credit card, direct debit, electric bill, internet, Money, paycheck, rent, Student loan, Suze Orman, thirties, variable Leave a comment

By your thirties, there are some serious bills to keep track of that may not have been around before.

For the first time ever, I’m dealing with my own internet service bill (that bill has always been in someone else’s name before, though I did have to pay into it) and my own electricity bill. Then there are small bills that come up frequently such as my Hulu bill, and the infrequent website hosting bills for multiple websites. There are credit card bills and student loan bills, plus of course, the ever-present rent bill.

Because my schedule can get really busy (as I’m sure yours does as well), I’m a huge fan of automated payments. They’re a great way to make sure you don’t forget a payment, and incur late fees, which can add up- or worse- hurt your credit score!

The financial advisor Suze Orman recommends automated payments highly. But when I went online to do research for this article, I noticed that a lot of advisors were on the fence about automatic payments. If you set up autopay for something and then never check it again, you’re definitely taking a risk. You have to make sure you’ve set up autopay for the correct date, so your account doesn’t get overdrafted when your Cable bill is automatically paid right before your paycheck comes in. It’s always possible that you’ll set up autopay and then get overcharged or have a fraudulent payment go through- if you never check your statements and bills, you won’t know about these issues, and therefore automated payments could cost you money. But all you have to do is occasionally check in on your autopayments, and they’ll more than likely save you money…and will definitely save you time! If you simply make it a process to check on things occasionally, I think automated payments are almost always the best way to go for busy thirty-somethings.,,definitely great insurance against late payments!

Some bills are better for automatic payment than others, and some payment setups should be different for different bills. Below are some automated payment tips so you can better use automatic payments to your advantage:

For repeated payments that will be the same every month, autopay is the way to go.

These payments include things like your student loan monthly minimum, subscription to Netlix, Pandora, Spotify, Hulu, your website hosting service, etc. If the payment is the same every month and never varies, automatic payments are a no-brainer. You very likely won’t be overcharged. Take payments off your to-do list and automate! All of the above subscriptions and payments have a repeating direct debit option.

For repeated payments such as your rent or mortgage payments, autopay would be a great way to go if it’s available.

Not all homes or buildings will allow you to autopay. Check with your building management company, mortgage lender, or landlord and see if there’s any way to set something up.

For variable payments, such as credit card bills, a minimum payment autopay is usually the best way to go.

You can also have the full amount owed on your credit cards completely paid every time. Whether you automatically pay just the minimum owed or the full amount owed on credit cards completely depends on your comfort level and how you feel. I have the minimum owed Autopayment scheduled every month, but I’m always checking in on my credit cards and paying them in full a couple of times a month anyway. I watch my credit card statements very closely. I’m thinking about changing my system to automatically pay the full bill every month as an even bigger backup system against any interest possibly accumulating. If you’re not afraid of a possible overdraft and don’t wish to keep a close eye on credit card statements, you can probably just do an automatic payment in full every month on all your credit cards as well. Or else make sure you set up Autopayment for the minimum due. Then you won’t get hit with an accidental late fee and a hurt credit score.

For variable payments such as electricity bills, internet, and cable bills, I still think autopayments are the best

This is where opinions really differ online, especially with electricity bills sometimes varying so widely in the very hot and very cold months, you can sometimes get socked with a bill you weren’t expecting. Also, if you’re overcharged and you’ve used autopayment, charges will take a little longer to dispute. I still think it’s worth it to not have to think about these payments- just check in on everything from time to time.

If you have a credit card that earns points or miles, see if you could use that to make automated payments, as opposed to just paying straight from your bank account

Getting paid in points and miles to pay my bills? Um, yes please!

Now sit back, relax, enjoy, and pretend you have a whole team of people paying all your bills for you, and you don’t have to do anything but concentrate on more important things…like your creative endeavors…and your next vacation. Yes!

Feels good, doesn’t it? 😉

Help! I Need Money! Can I Borrow Money From My 401K or IRA Retirement Account?

July 14, 2015 By laurasomewherelse in Money Tags: 401(k), borrow, Debt, financial advisor, IRA, Money, Retirement, Retirement Account, Roth IRA, Savings Account, Suze Orman, thirties, Thirty 4 Comments

Congratulations on having a retirement account! If you have a retirement account with at least some money in it in your thirties, you’re way ahead of most of the American population. If you don’t yet have a retirement account click here for info on how to set one up.

Since financial education isn’t really taught in American schools (though it should be!), it took me until age 28 to realize I should open a retirement account- and I only figured it out because I started listening to tons of finance podcasts. A lot of people I know are the same way- opening retirement accounts late in life or wondering in their thirties whether to open them at all yet. Some people are lucky and have money automatically placed into a 401K through their job. However, if your job offers you a 401K, make sure you’re actually enrolled in the program. More than one close friend of mine realized that they weren’t automatically opted in to their workplace 401K, and had ended up missing out on years of compounding interest in their retirement accounts…because they weren’t saving anything!

So..back to the title of the post. Let’s say you suddenly need money and for whatever reason, you haven’t saved anything in a savings account. What should you do?

Well, if you’re considering taking money from your retirement account, think twice. This is usually a very bad idea, and should not taken lightly.

Here’s some advice for what to consider before you pull money from your future (also known as your retirement account):

Do you really NEED to buy this? The financial advisor Suze Orman always distinguishes between needs and wants. If you’re trying to buy a car because you have no car and absolutely can’t get to work without one, that’s a need. If you’re trying to buy medication for your diabetes, that’s a need. If you’re buying a new coach bag, that’s a want. If you’re buying a vacation, that’s a want. If what you’re buying is a NEED, then continue reading. If what you’re buying is a WANT, don’t even THINK of pulling money from your retirement account!! Stop right now! Wait until you’ve saved money in a savings account!
What type of retirement account do have? Choose below:
a. A 401k
If you have a 401K, it’s a really bad idea to take money from it before retirement unless you’re absolutely, totally desperate and what you’re buying is a NEED (and taking money is still a bad idea even then.) You’re going to be hit with a 10 percent penalty fee right off the bat, plus you’ll have to pay taxes on the money taken.

B) An IRA (Individual Retirement Account)
If you have an IRA, it’s also a really bad idea to take money from it before retirement unless you’re absolutely, totally desperate and what you’re buying is a NEED (and once again. it’s still a bad idea.) Same penalty fee and income taxes owed on the amount taken as the 401K. You’re going to lose so much money in the process of doing this! There are a few exceptions to having to pay the fee though – read about them here.

C. A Roth IRA

This is still a bad idea unless you’re absolutely, totally desperate and what you’re buying is a NEED, but it’s your best retirement account option. The wonderful thing about Roth IRAs is that they are kind of like savings accounts in that you can borrow from them at any time without fees or taxes owed. However, you can only borrow from the money you’ve contributed and not the interest earned. But if you take money out (which I don’t advise because you’re hurting your retirement account and it’s ability to compound and generously earn you more money), at least you aren’t getting charged a fee and taxes on money you’ve borrowed from yourself!

This is yet another reason to open a Roth IRA if you don’t have one yet!

Hopefully you’ll never get to the point where you absolutely need to borrow money from your retirement account. But if you do, I understand, and I get that you’re in a very hard situation.

Hopefully this has been helpful, and you now know that borrowing from your retirement accounts should be your absolute last option!

How Much Should I Be Contributing to My Retirement Account in My Thirties?

May 6, 2015 By laurasomewherelse in Money Tags: 401(k), 401k match, finance, IRA, Retirement, Roth IRA, Savings, Suze Orman, suze orman show, thirties, Thirty 4 Comments

The Suze Orman Show recently went off the air and I’ve been heartbroken ever since.

I never watched Suze on tv, but I listened to her show religiously, podcast-style. After all, Suze’s money commentary was addictive, and she dispensed the good advice to give up cable, which I haven’t had in years to begin with.

There are so many points Suze repeated over and over that made simple what used to feel so complicated in the world of money. She kind of changed my life. In tribute to her, my next few money posts will be as short and simple as possible- her best ideas were short and powerful and repeated time and time again.

So here’s how much you should be contributing to your retirement account(s) in your thirties:

1. First, if you are an employee (and not an independent contractor) make sure you are actually signed up to contribute to your work 401k. Are you SURE? I have so many friends who thought they were signed up for years but actually weren’t. So they contributed ZERO…by accident. Double check.

2. Second, if your workplace offers a 401k match, contribute money into your 401k up to the match. Then stop and contribute to your IRA or Roth IRA.

3. If your workplace doesn’t offer a 401k match, or you’re self-employed, start out by contributing the maximum to your IRA or Roth IRA. Don’t know how to open an IRA? Read about simple ways to do so here.

4. You can contribute up to $5,500 a year to your Roth IRA OR your IRA. Total. Try to hit that mark. If not, do what you can.

5. Contribute what you can to that IRA or Roth IRA. This is your main retirement vehicle. I try to contribute 10% of my income to my Roth IRA. Many financial advisors recommend 15%…I’m not ready for that yet, but once I finish paying off my student loan I will be.

6. If you max out both your 401k MATCH and ALSO your Roth IRA or IRA, then go back to your 401k and contribute as much as you can. You can contribute up to $18,000 in 2015.

7. If you don’t have a 401k because you’re self-employed like me, and you’ve maxed out your Roth IRA or IRA (good for you!), then you can start contributing to special retirement accounts for the self-employed. Learn about those here.

Hope this helps you learn how to save for retirement! Please ask any questions you have- I’m happy to answer or find you answers! 🙂

Best Savings Accounts as of February 2015

February 11, 2015 By laurasomewherelse in Grab Bag Tags: account, Interest, investment, Money, Savings, Suze Orman, thirties, Thirty 4 Comments

Are you in your thirties and still keeping all of your savings in an account that offers a .03% or less interest rate? Or worse yet, do you not have a savings account at all?

If you’re still keeping your spare change under your mattress, it’s time to open up an account for your savings! And if you already have a savings account, are you getting enough of a return from it? Even if you barely have any extra money sitting around, you can still have some of your money making you money with a better interest rate. You can open a savings account at all the places I’m going to list below with no minimum deposit required. So even if you only have $5 to save for a rainy day, you can still open up a savings account.

Sometimes people ask me: “Shouldn’t I be investing my extra money?” You can do that, but you need to have a savings account first. A major reason to put extra money away in a savings account and not simply invest it all is that you need to have liquid money at your disposal in case of emergencies.

For example, the other day a seltzer water exploded on my computer and killed my keyboard. A bunch of very important keys (spacebar, delete, tab, etc) on my laptop just stopped working, and I ended up having to go to the Apple store and pay 70 dollars for a remote bluetooth keyboard. If the seltzer had gotten to my circuit board and my laptop wouldn’t turn on at all, I might have had to buy a whole new laptop for $1000- $1300!

You never know when emergencies will come up. Sudden layoffs, surprise medical bills, new laptops, parking tickets, surprise taxes and the like all happen, so it’s very important to be financially prepared. Suze Orman recommends having an up to 8 months in an emergency fund. Many other financial advisors recommend even more!

So while you’re saving, get your money to make you more money! This is done by putting your money in a savings account with the best APY, or Annual Percentage Yield (interest rate).

Here’s a list of the best interest bearing, no minimum savings accounts as of February 11 2015. These are all accounts I’ve researched and they have very good reviews. I personally use Synchrony (I started my account when it was called GE Capital) and it’s been great. Again, none of these are sponsored… Haha, I wish :p

Synchony Savings Account (formerly GE Capital) – Current Interest: 1.00% (I know that sounds low, but it’s actually amazing right now. Many banks are at .03% at most.)- Click to start an account for free here!