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James Wang — Tue, 29 Jul 2008 23:55:00 +0000

The savings triangle of victory

James Wang — Tue, 22 Jan 2008 10:08:09 +0000

Ok, you caught me, I was stumped when it came to naming this post, but over the last 3 days I’ve probably shared this idea at least 3 or 4 times, with each time making me realize that this is good stuff that might be helpful to share. I’ll admit now that much of this came from talking with my incredible fiance, Jessica.

Here is my suggestion for a starting set of accounts that you should have as a foundation and why. You will want to open three separated accounts. Here is my set up.

------------------   ---------------    -----------------
|    Checking    |   |   savings   |    |   emergency   |
------------------   ---------------    -----------------

I place a direct deposit of my money into my checking account. My emergency fund has about 3 months worth of expenses in it. If you haven’t started one, then start small and put a little in per month. The savings account is good practice for yourself in budgeting and also as practice for marriage. This was brought to my attention by Jessica. Having a savings account that you put a little in every paycheck is a great way to avoid a few small fights during marriage over purchases that might seem silly to your spouse. So as a single person get used to splitting your money this way, so that when you get married, you have a shared checking account, but only use your own separate savings accounts as your discretionary money. Any purchase that needs more money than what is in the account would need to be discussed. Everything else is fair game. A question I’ve gotten is, “Why not just have your savings and checking at the same place?”, of which I would say that it is because by putting them in separate institutions will cause you to have a higher probability of spending less because of that extra little barrier of access. Out of sight, out of mind. Here are my suggestions for where you might want to open up the suggested accounts.

------------------   ---------------    -----------------
|    Checking    |   |   savings   |    |   emergency   |
|    Schwab      |   |     ING     |    |     E*Trade   |
|    4.00% APY   |   |  4.10% APY  |    |    5.05% APY  |
------------------   ---------------    -----------------

I liked these accounts because each of them had very high return rates, but also had no minimums and free atm fee reimbursements. Feel free to comment and let me know if you have thoughts on this or would like to let me know about other accounts that might be better than my suggestions.

jameswang.net » Goal Setting

Picture: If you can dream it you can achieve it (from digg)

The savings triangle of victory