Stimulus Checks and Online Savings Accounts

Pay Yourself First is something I advocate with all. It is even more important once you get your stimulus check. If possible use the check to start an emergency fund. If nothing else, the coronavirus has taught us how important it is to be prepared for the unexpected.

For ongoing, one of the best ways to "Pay Yourself First" is to allocate a certain dollar amount to save, every time you get paid, have it automatically deposited to an online only savings account then FORGET ABOUT IT.

​It is important that this dollar amount is included in your regular budget and is sustainable. What I mean by sustainable is, you should be able to consistently save this amount without blowing your budget.
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So if this happens to be a good week or month of income and you start with a $100 deposit this pay period and the next and the $100 causes you to blow our budget that results in you taking some out of your savings that defeats the intended purpose of set and forget about it. The purpose is to see the money increase. So start small, put it in an online savings account and forget about it helps make it sustainable. I prefer you start with something like $20 per pay cycle and do the $20 every pay period. Then assess every 3-6 months to see if there is an opportunity in your budget for you to increase that amount being saved. This way your money is being increased and you are earning simple and compounding interest.

When searching for an online only savings account you want to choose the one that works best for your individual situation. 

Things to consider:

• Interest rate - you want this percentage to tbe the highest you can find  
• The process and timing to get your money when needed  
• The easy to navigation their app or website  
• They are FDIC insured 

The below are a few online savings accounts for you to consider. Note as I write this the information it is subject change. As an example the interest rate is something that is subject to change. 
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Capital one 360

• Interest Rates- 1.50% 
• ​Fees- none
• Minimum Balance- none
• ​Customer service- 1(888)-464-7868
• Electronic transfers:

          - Between two capital one banks - Instant
          - Capital one to another bank - 2-3 business days (48-72 hours)
Ally

• Interest Rates- 1.50%
• Fees- None
• Minimum Balance- None
• Customer Service- 1(877)-247-2559
• Electronic Transfers: 

       - Ally bank to another bank:
      - Will take 3 business days when requested before 1 am Et on Monday- Friday 
      - 1 day when requested before 7:30pm Et on Monday-Friday

Marcus By Goldman Sachs 

• Interest Rates- 1.90%
• Fees- None
• Minimum- None
• Customer Service- 1(844)-627-2872
• Electronic Transfer:

      - Online - 1-3 business days (24-72 hours)
      - Wire transfer - 1 hour
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American Express Savings 

• Interest rates- 1.60%
• Fees- None
• Minimum- $1 
• Customer service- 1-800-528-4800
• Electronic Transfer:

      - 1-3 business days (24 - 72 hours)

When you make the transfer it will let you know when the funds will be in the account you are transferring it to. So you may be saying to yourself, do I need another account for this money to be transferred to and the answer is yes.

For point of comparison of online savings banks interest rates to the local banks. Local banks are like 0.35% interest rates and local credit unions may be a bit more but by far the online only savings account will yield you. The key to earning interest on the money is keeping in the account and letting it accumulate over time. 

I love the quote by M.K. Asante Jr. "When you make an observation, You have an obligation". This goes nicely with this topic. How? Because we have observed how what we knew as normal can change in the snap of a finger and we have an obligation to be prepared financially weather the storm.

Remember, the steps are:

• Choose an online bank that works best for you
• Set a certain dollar amount that works for your budget
• Have that amount automatically deposited into the online only saving account
• FORGET ABOUT IT

Need help with your personal finances or more on this topic let me know CONTACT PATRINA