Money and Savings

Money:

• Most people know how to make it.
• We all know how to spend it.
• We don't all know how to save it.
• The few that do save it don't always save it efficiently.
  

I am going to give you some ideas on how to save money efficiently and help to create a budget that is super simple and you can live by.

Here are some very important things that are absolutely necessary to do to be able to manage your money and even have your money make you money.

1. Get a checking account. I am surprised how many college students don't have one. Most of them do and that is awesome. But some live on a cash only basis...bad idea...I will explain later.
2. Get a savings account. If you don't have a checking account then you probably don't have a savings account then...so set them up at the same time while your at the bank.
   
3. Get a high yield savings account. I actually have two of these high yield accounts. I have one at Citibank (its called an Ultimate Savings Account) and also one at HSBC (Online Savings account). The interest rates on these accounts are amazing. As of 11-8-2007 I am making 4% on my Citi bank account and 4.5% on my HSBC account compared to 0.01% on my U.S. Bank Savings Account. There also is a minimum balance of only like a dollar so don't be afraid to drain these high yield savings accounts down if you absolutely need to.
   
4. Setup online bank transfers between all 3 of your accounts. This is super easy nowadays. It takes about a week to fully setup the accounts but only about 20 minutes of actual work and part of that was calling my bank to find my routing number. It takes me normally 3-5 business days to transfer money from my high yield account to my checking account so keep that in mind.
   
5. Since my checking and basic savings account are at the same bank it makes transfers instantly between the accounts. I use this savings account as an emergency savings fund. I keep the balance at $150 incase of any emergency that happens.
   

Okay so thats all done? Well lets start off by setting some ground rules. First if you are like me and you get a large lump sum of money at the beginning of the year you absolutely should deposit that money into your high yield account. I normally start with $1200 a semester for spending cash. I normally keep my monthly budget money in my checking account, emergency money in my basic savings and every thing else in my high yield account. I normally make about $4-5 a month in my high yield savings account...not bad for not doing anything at all.

This is a super easy setup that almost anyone can do. There is absolutely no reason why people shouldn't be using a high yield savings account. The worst thing about them is the fact that it takes a few days to transfer the money to your checking account. The plus about them that counters that is the fact that they do include ATM debit cards so you can easily access that money if an emergency happens to come up and you happen to not have a credit card.