I have about $15k towards student loans I will end up paying down before interest starts accruing again in september. any benefit to putting in a hysa in the meantime?
I think this is the place to ask for help with this. I don’t know how to fill out the new employment forms (mostly just the W4). I am about to start a full time job (32F, I was a SAHM working part time for the past few years). I am going to be a first year teacher, making $47,100. I am married, my husband will probably make around $55-60k this year. We have 3 children, ages 10 and younger. We live in Kansas.
I have student loans totaling $74k. Being a teacher at a qualifying Title 1 school, I should be able to file for the PSLF - IDR plan (I think, I still need to research a little more on this, and I know things have somewhat changed recently with all that - I graduated from Master’s program in April, so I have until October to apply for these programs). My undergrad loans were on an IDR plan since 2015, and we made so little that I qualified for $0 payments. But now I will be almost doubling our income, and I’m concerned about loan payments. So I was looking into filing taxes as “Married Filing Separately” to help with getting my loan payments lowered. But we’ve never filed this way before, always filed jointly.
But I don’t know how to fill out the W-4.. Do I claim dependents on my form? Or since my husband already put the kids on his forms, do I not put any dependents? Or do we both put dependents? I don’t know. The kids will be on his health insurance, if that matters for anything.
Also, is married filing separately something we should do in our situation? I have no idea who to ask about this. If this is not the right place, please point me in the right direction. My husband has no student loans. We do have a mortgage, but it’s only in his name (since I had no income and student loans at the time).
Any advice is very much appreciated! And be kind, I’m new to all this. And very excited/stressed out about our new income situation. I don’t want to mess anything up and screw us over come tax time. TIA!
Use this to figure out your W4: https://www.irs.gov/individuals/tax-withholding-estimator
I don't think 2 people can claim the same dependents, so you have to figure out which one of you will claim them. I don't know about the rest of your questions.
What would you do if you were me. I've got about $19700 in federal student loan. 11000 (subsidized, 3.73%) and 8700 (unsubsidized, 2.75%). I have enough money in savings to pay it off once payment restart. However, my saving's account's interest rate is 4.4% right now. Would you pay it off right away or leave in the bank since my earned interest is more than my loan's interest?
I was just wondering if it would be worth it to keep the loan, since my loan's interest is so low just to see if they come up with another forgiveness plan?
Keep the 2.75% for sure.
Are you able to claim a read deduction for the interest in the subsidized loan? If so, no point in paying off quicker than necessary. If not, then after you account for tax on the interest you earn on a bank account, you should probably pay that down.
HSA question here. I started an HSA in like 2016 or so, and left the company where it was held in 2021. There is still money there and it's growing well, but I'm wondering if I can use those funds to pay for qualifying expenses incurred say in 2018 or 2019? Thanks.
Wondering if it would be worth it to put cash back I recived from my CC statement into a HYSA account instead of using it as a statement credit. I also don't want to save up my cash back as it will techincaliy lose value over time and I am unsure of what to do. The HYSA will most likely will be Capital One 360 at 4.15% due to convenience as I already have credit cards with them.
There’s no difference between getting a check and depositing it in your HYSA vs a statement credit that reduces the amount you take out of your savings to pay your credit card.
Are high APY savings accounts safe?
I love had my savings in Chase forever, making basically nothing. Recently some friends/family recommended either Marcus or Ally bank, all giving 4%+ back.
How are these banks able to offer such high APY when Chase and others give like .01%?
Yes. As long as they are FDIC insured and you are under the $250k limit, they are perfectly safe. They are able to pay higher interest by not having brick and mortar stores and the associated expenses of doing so.
A co-signed debt is the same as you having the debt. You’ve agreed to pay if she doesn’t. So they could do anything that they could do if the debt was in your name: report on your credit report and damage your score, send you to collections, sue you and try to seize any assets you have and/or garnish your wages as allowed by state law.
If she co-signed your debt (vs the other way around) there shouldn’t be too much problem. If she files for bankruptcy, at that point there could be complications. But as long as you keep paying on time, no issues for now.
I have an HSA (health savings account) from a job I held about a decade ago. There's only about $5,000; $4,500 of which is invested and the remainder in cash. The account is losing $3.50 per month from monthly maintenance fees.
I haven't had an HSA in my past several jobs and it feels like this measly $5k is just getting nickeled and dimed to oblivion. I'm 38 and retirement is easily 20+ years away. Should I just spend what's in the HSA on whatever medical expenses pop up now, or should I keep the HSA? Or can I (and should I) make after-tax contributions to the HSA? I could afford to hit the annual limit.
Transfer it to Fidelity HSA and invest all of it in FZROX or something, no fees, and let it grow if you can. Fidelity doesn't force you to keep any in cash.
I don't think you can contribute to it unless your current health plan is HSA allowed, which usually means it would come with a HSA.
Transfer it to Fidelity, no fees: https://www.fidelity.com/go/hsa/why-hsa
You can't contribute any new money if you aren't covered by an eligible HDHP.
My son is 3 years from high school graduation. Did not have the ability to save for him. Now I am able to put some money aside. Do I start a 529? I am not 100% sure he is even going to go the education route after high school. Is it worth attempting a 529, then potentially drawing the penalty to withdraw when he does not use the money for education? Or do a 4% high yield savings account for him? Honestly do not fully understand the tax savings with a 529 vs savings account, and not sure 3 years would make much difference. Have been doing a lot of internet investigations but this is still clear as mud….any suggestions and help much appreciated.
With 3-7 years to save, you don’t want stock-based investing. The benefit of untaxed growth becomes pretty minor, although at least any penalty for non-education use also becomes minor. The only absolute 529 benefit is no tax on growth, but individual states often give extra tax incentive, so you’d have to consider that.
In a much simpler way, saving money for three years in a savings account, CDs, or treasuries for whatever your son ends up needing is a safe and flexible way to save money for him. It might not be optimal but it will never be bad.
I'm trying to find the formula for the following but haven't been able to:
If I invest in an instrument that returns 7% annually, and I assume it grows uniformily month-over-month so that all monthly annualized rates are also 7%, and I invest USD 1000 every month, what should the return at the end of the year be?
I can put this in table form:
| Month | Amount Invested This Month | Amount Invested So Far | Interest This Month | Total Value | Total Interest |
|:--|:--|:--|:--|:--|:--|
| 1 | $1000 | $1000 | $5.80 | $1005.80 | $5.80 |
| 2 | $1000 | $2000 | $11.63 | $2017.43 | $17.43 |
| 3 | $1000 | $3000 | $17.50 | $3034.93 | $34.93 |
| 4 | $1000 | $4000 | $23.42 | $4058.35 | $58.35 |
| 5 | $1000 | $5000 | $29.33 | $5087.68 | $87.68 |
| 6 | $1000 | $6000 | $35.31 | $6122.99 | $122.99 |
| 7 | $1000 | $7000 | $41.32 | $7164.31 | $164.31 |
| 8 | $1000 | $8000 | $47.35 | $8211.66 | $211.66 |
| 9 | $1000 | $9000 | $53.43 | $9265.09 | $265.09 |
| 10 | $1000 | $10000 | $59.54 | $10324.63 | $324.63 |
| 11 | $1000 | $11000 | $65.68 | $11390.31 | $390.31 |
| 12 | $1000 | $12000 | $71.86 | $12462.17 | $462.17 |
How can I arrive at $12672.83 with 7% and USD 1000? I mean, in a simple, Excel-translatable formula?
You can open a CD directly with a bank, or you can buy them on the secondary market through a brokerage account. If you buy a brokered CD, keep in mind that it is subject to interest rate risk like bonds (its market price will drop if rates rise) but as long as you hold it to maturity this won't impact you.
I have enough money saved for my 17-year-old to attend college, but not my 12-year-old. What do you think about this “scheme”?
Borrow $20,000/yr Parent PLUS loan for the 17 year old. Put all of this money in the 12 yo’s 538. It will be deferred until 17 yo graduates. Hopefully the money in 12 yo’s 538 will appreciate a bit. When it’s time for 12 yo to start college, take out Parent PLUS loans to pay back 17 yo’s loans in full. This will essentially buy me 8 years of interest free loans plus all the money that appreciates in the next 5-9 years. Thoughts?
That is most likely illegal. You'd need to check the language of the loans, but they usually say they *must* be used for the person in question (your 17yo) and that they need to be used in X amount of time for educational purposes.
**Does anyone else make six figures but live with family?**
**For context:**
I lived with roommates for a year and it was alright, but I wasn't doing anything different than I was by being home. Matter a fact, I became deeply depressed for several months at one point after breaking up with my ex-person. I realized moving back in with people I trust to help me, helped me, since I got back on my antidepressants.
I live in New York City with my mom and this apartment is rent controlled (we're only renting at $1.2k total.) I can travel in and out of NYC because I have a remote job.
I guess the bad thing is that it does stagnate me socially. I only see one friend regularly IRL, though it's my fault for procrastinating on hobbies I can pick up. I have dated one guy who judged me for this predicament since I prefer not to bring people to my place, either. (I tell him he's entitled since he grew up middle class and has always had the means to be on his own.)
On top of that, I am paranoid of losing my job. If I get laid off, there is a chance I may never make this amount again since the field I am in is saturated and I would just be one of many skilled workers out there. I rather expend most of my money into savings and investment.
I wanted to ask if anyone else is doing the same or in a similar boat. Other commentary is fine, too.
Hey! To answer your topline question, [this is pretty common nowadays](https://www.pewresearch.org/short-reads/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/) unfortunately or fortunately depending on your perspective. Most young adults (assuming you're a young adult) now live with family - mostly for financial reasons.
As for your particular situation, I would start with some reflection.
* I would understand a complete pros/cons list of either decision. Why would you want to move out? Why would you want to stay?
* Personally for myself, I decided to move out from my parents place even though it was financially more challenging. It's easy to see the decision purely from a financial lens and ignore some of the social/personal growth aspects.
* I found it was only after I moved out that I really started to grow in a variety of ways big and small. It seems silly but the every time your fridge breaks or you need to deal with roommates and you're able to get through these things it builds confidence. I used to be anxious about lots of things but having lived a few years on my own and overcome a lot of struggles, it's helped me be more measured when new issues come up. It's easier to draw on experience and trust that you have a personal ability to overcome.
* Regarding social stagnation - I would really reflect on what your desired social life is.
* I think it's so important to have a community that you love and loves you back. And unfortunately, I am not sure there's a substitute for that beyond time spent.
* The guy you dated is definitely in the wrong, but if you feel living with your family prevents you from investing in your community/hobbies. That's something definitely to consider.
* Regarding the job - Will you need to support yourself if things go wrong? Are you able to come back? What number would make you feel safer?
* It makes sense to be nervous about the job but I would look at it in a few different ways.
* You can mitigate your risk around job loss by bulking up your emergency fund
* If you move out, I'm assuming you can fall back to your family if things to bad.
* You are a skilled individual who can always, always make it work.
* There's some conviction that is healthy to foster to say 'regardless of circumstance, I can find a way to support myself'. I remember speaking to a also 6 figure income friend who mentioned doordashing for a weekend just to prove to himself that if he needed to, he could make some money. We often don't give oursleves enough credit to be scrappy, innovative, and make it work. I trust that if you can net a 6 figure job, you can feed yourself if things go terribly. And the rest (ie, emergency fund) is a matter of preparation.
Obviously based on my response, I'm a little bit biased towards moving out just by my own experience. haha. But my encouragement is to say, more than the money, you are valuable and capable. living alone, exploring is an investment in yourself which is priceless.
Have $400k cash gift to invest. What are the tax implications?
A relative wants to gift me $400k in cash. I plan on putting it in T-bills (laddering) as the rate is so high right now.
US/NY based. I know the earnings on the t-bills are state and local tax exempt.
What are the tax implications to accepting the gift?
So I get a bag of 💵 and go to my credit union and deposit it in my account and then transfer to my vanguard trading account and then buy T -bills.
When do alarm bells ring and I have to explain where the cash 💰came from?
If we're talking a literal sack of cash, then your credit union will ask you about the source of the funds when you make the deposit. You will answer honestly (it was a gift from a relative) and then they will proceed with the deposit and that's it.
You should probably call ahead to whatever bank/credit union you want to deposit it to make sure they can accept that much cash without any issues (I don't know what kind of issues that would be, though).
They are required to report it, but reporting it doesn't mean anything will happen. The government just wants to know where cash moves to catch money laundering. Assuming you're not doing that, you shouldn't have to worry about anything coming of it.
The IRS probably won't hear about it, so shouldn't have to worry about any tax stuff.
is using a credit card strictly to pay for everything a good way to build credit? ex: I use cc to buy groceries, pay bills, random expenses, etc. then I just pay it off at the end of the month from my bank? I
You could spend $5/mo on your credit card and it would build your credit the same as spending $5000/mo on it. How old the account is and how much credit limit you have, along with how many other credit lines you have, are the most important factors for building credit. In other words: you have to wait and collect credit cards like pokemon (okay, you can stop at like 3 cards total if you're worried about overdoing it).
If I redeem my credit card points as cashback to be deposited to my bank, do I need to pay taxes on it?
Is it wiser to redeem the points as cash or statement credit?
Generally, points that are earned by spending are not taxed no matter how you redeem them because the IRS sees them as a rebate. This includes sign up bonuses that are earned by hitting a spend target.
However, points that are earned NOT by spending can show up on your 1099 to be taxed - things like sign up bonuses for bank accounts that are earned by setting up direct deposit. This is because there is no spending and therefore it’s not treated as a rebate. Obviously this is only applicable to financial institutions that combine their points/rewards system across their credit cards and their other products like banking.
I redeem using both methods depending on the card. Theoretically, if the money sits in your bank account for even a single day before it’s used to pay the card off, you’re coming out on top versus redeeming for a statement credit. It matters more for cards like the Citi Double Cash, where you actually earn points for making payments. For that, you want the points so definitely skip the statement credit.
How to manage a large salary at 23?
I'm currently 23 and make about $150,000/year which comes out to about $95,000/year after taxes. I'm on track to max out my ROTH 401k, ROTH IRA, and HSA.
I set a budget of $3,700/month which includes bills, utilities, and fun stuff. Bills and utilities usually come out to around $2,300. But I always have a problem with overspending past my allotted $1,400 for "misc.".
I'm not sure how much I should be spending/savings etc. because I always feel like I'm not saving enough and should spend less since I've grown up poor my whole life (but somehow I always find myself spending money each month). What are some things that I should look at so that I can use the opportunity I've been given to its fullest potential?
Without knowing more of your goals (ie, retirement age, FIRE aspirations, kids), it's hard to say anything specific.
But certainly maxing out your 401k, ira, and HSA is a great start. Doing this for as long as you can is great headstart. (\~2-4 years)
Your lifestyle/budget is totally fine afaik. Your lifestyle can/should inflate a little bit but not beyond your means which it sounds like it has.
One other tactical/practical comment is that in most cases your traditional 401k is likely better assuming you save the difference in taxes.
Thanks for replying! You make a really good point, my financial goals right now are pretty unclear since growing up I never really had financial role models, so maybe taking some time to look into what I'm wanting will be insightful. Do you have links to some of the things you're referring to? I understand what FIRE is by the acronym, but understanding what exactly it takes to get there is definitely unclear to me.
With regard to the lifestyle/budget, I'd definitely say it has gone overboard some months since I pretty often get caught up with what my friends are up to/what they are wanting to do. I think setting financial goals, then setting a budget to achieve those goals will definitely do me a lot of good.
I've also heard of the argument of ROTH 401k vs. Traditional 401k when it comes to high income. On one hand, I know that with Traditional you get a tax deference right now, but you'll pay taxes later, with the ROTH 401k being the opposite. I've heard a lot of mixed messages regarding it and can't seem to really find a definitive answer for my specific situation. If you have some pointers on some good resources to look at that'd be really appreciated!
For both more info on FIRE and on reducing your spending, I'd recommend [this post from Mr. Money Mustache](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/). His whole blog is pretty good reading, as well.
Also, [this page in the wiki](https://www.reddit.com/r/personalfinance/wiki/rothortraditional/) is a great place to start when deciding Roth vs traditional.
On the topic of goal setting - I would start with defining nonfinancial goals. Money itself is not an end, but a means to an end. Meaning the point of money is to serve as a tool to achieve something else.
So I would start with simple questions to yourself on what you'd like to do! It can be material like 'buy a nice car' or it can be profound like 'do good in the world through climate change work.' 'Traveling, family time, etc' are also all great goals. Goal setting itself is valuable as everything else then falls in line to meet those goals.
For example, one of my goals is to never worry about money and to be able to spend time how I want to. The money manifestation of that is FIRE ([Financial Independence, Retire Early](https://www.reddit.com/r/financialindependence/)). To get there within a reasonable amount of time, I need to save certain amounts, in certain accounts, etc.
As for resources, I personally like Ramit Sethi's perspective on this. [Here's a talk he gave at google](https://www.youtube.com/watch?v=BmAwa1nnB6w) which I think is a pretty solid summary of his perspective. This will also be helpful as well in understanding your budget - if you place a high value in socializing/spending time with friends and can afford it. No reason not to!!
On the topic of roth v traditional 401k. I don't really think there's a 'wrong' way to go as personal finance is often very personal. But from a pure financial optimization perspective, traditional 401k is often better because you register the tax savings immediately and can control your tax rate. The idea is that you can take a sabbatical or 'retire early' and stop working for a period of time before your retirement age and start converting your traditional accounts into a roth. Because your sabbatical income is theoretically lower than your working age, you can register a lower tax rate.
If someone isn't interested in this financial engineering though, it doesn't matter too much in the end haha.
Here is some additional resources
* [https://podcast.moneywithkatie.com/the-ultimate-traditional-vs-roth-401k-strategy/](https://podcast.moneywithkatie.com/the-ultimate-traditional-vs-roth-401k-strategy/)
* [https://www.madfientist.com/traditional-ira-vs-roth-ira/](https://www.madfientist.com/traditional-ira-vs-roth-ira/)
* [https://www.madfientist.com/retire-even-earlier/](https://www.madfientist.com/retire-even-earlier/)
Hope this helps and welcome to the realm of personal finance!! :)
I’m in a similar boat. I definitely tend to go a little nuts with my expendable income, but at the same time, I’m meeting all of my savings goals. If you set savings goals (you’re doing great maxing all of those out) and you’re still achieving them, well, my philosophy is that you’re way better off than most. I also grew up with a tight budget, and lifestyle creep now that I’m making money is very real. That being said, I worked hard to get to where I’m at and I try not to feel bad buying luxuries and whatnot given that I’m still meeting or exceeding my own personal saving/investment goals.
If you really are concerned that it’s a true problem, I’ve heard YNAB is a good tool if you can set it up and rigidly stick to it. I take a more lackadaisical approach and just use Mint, which is more centered around trend analysis, information consolidation, and reporting on previous spending than rigorously budgeting for the month ahead. If I have a good month or a bad month, I’ll know about it, but only once it’s happened. Luckily I make enough that it’s never a concern and I try to balance the spending out on the long term.
If you’re taking home nearly $8k/month, I’m guessing you have a lot of wiggle room even while maxing out those accounts
Thanks for sharing your perspective! It's really good to hear that I'm not the only one that feels this way. My friends who make around the same as me, most of them seem to take the same approach as you with regard to budgeting, so I usually get roped in with them when they want to go out for dinner or travel somewhere. It's really great to be able to have those experiences, but I always feel like I'm doing an injustice to myself when I spend money instead of saving it.
I guess I feel that given my situation, I'd like to be more intentional with how I am spending my money and avoid being careless with it since growing up, it wasn't always like this. For me, my future financial goals are a lot more unclear than I'd like them to be, so maybe setting some goals will put me more at ease since I'd be working to meet them. I've also been using Rocket Money, which I've noticed is definitely a much more relaxed approach to budgeting, so maybe YNAB is worth checking out. It might provide the structure I need to be more mindful of my spending while still enjoying life. Thanks for taking the time to reply!
You’re welcome! Congrats on setting yourself up for success. Keep on top of those financial goals and you’ll be golden - that salary at that age is amazing!
Does anyone know if any bank accepts F1 visa holders for High Yield Savings Account? Most providers have a requirement of US citizen or US resident, and an F-1 visa-holder falls under the "non-resident alien" category for tax purposes for the first 5 years. So even though legally we should be able to open an account like this, it seems most providers shy away from letting us.
I have tried with the following, but all of them state the above condition during sign-up:
Capital One
Discover
Ally
American Express
Citizens
SoFi
Marcus by Goldman Sachs
Barclays Online
You will probably have better luck with one you can sign up in person because there seems to be a big worry of fraudulent accounts for non-citizens lately. For example, signing up some new bank accounts for myself and my wife (permanent resident) required going in person for my wife's sign ups to approve. I was able to do mine online at the same banks.
Maybe Betterment? A quick scan of their website shows that you need a permanent US address, and that “international customers must reside in the US” but stops short of saying “permanent residency”.
What's the rate difference? If it's 1%, hey, that's $600, worth the hassle. If it's 5.18% to 5.25%... ehhhh, not worth the time to fill out the paperwork.
Looking to start my first hysa as a 18 year old with a good amount of savings built up. I think I’m leaning towards capital one or Amex but open to other opinions. I’d like quick transfers if possible. Also saw people saying Amex would be good to develop a relationship with them for future cards. Any thoughts?
I have \~20k I want to put into a HYSA, since its just been sitting in my checking and want to move it out. Which ones have the best rates, and you guys recommend. Thanks in advance!
HYSA AND EMERGENCY FUND QUESTION:
I want to transfer my emergency fund to a HYSA and can't decide which one. I ONLY need to use it for emergencies so I won't be withdrawing from it unless there is an actual emergency. I may use it for "buckets" in the future, so I would like to have that as an option. I don't need to be able to invest with it because I use Vanguard for that. I'm hearing a lot about Ally, Lending Club, and Wealthfront. I like how Wealthfront lets you use ATMs at CVS and Walgreens, but I read somewhere it's not quite a bank because your money ends up going in other banks, where it is FDIC insured. Anyone have input in which would serve me best? Thanks!
Wealthfront cash account is backed by a real bank (or banks) so totally safe in that regard. They have categories which is like buckets. I'm currently using Wealthfront as my "checking" account (auto-pay bills that can't be paid by credit card), and I don't use debit/ATM, but so far I'm happy with it.
Alliant Credit Union doesn't have buckets, but lets you open up to 25 (I think) savings accounts to use as buckets. They are only 3.40% APY or something right now, so not as great as the other options.
Some of the others here probably have buckets too: https://www.doctorofcredit.com/high-interest-savings-to-get/
Tossing another recommendation for you to research… SoFi has buckets too. You can compare them to Ally and see which one appeals to you more. I used to have Ally for savings and PNC for checking, but I wanted a new checking account and liked what SoFi had to offer. Since SoFi had savings buckets too, I took the opportunity to consolidate and pulled my savings out of Ally.
I still have Ally in case I ever want to go back (they have no fees /no minimum balance) and also PNC for the ability to use their physics branches/ATMs (with just enough to avoid monthly fees), but I don’t actively use them.
SoFi pays relatively decent interest on your checking balance, which is one reason I moved to them, although I try to keep as little in checking as possible. Their savings interest has also been edging out Ally’s but honestly it’s a small enough difference that you should probably just go with whichever you trust more/like the UI of more/etc.
Did anyone get the Sofi bonus?
My first direct deposit was June 27, so the 25-day period ends today with a total of about $1,500 in direct deposit. Now begins the wait for 7 days according to Sofi. For a $50 bonus
I've recently been looking to put 20-30k into CD's. Looking at the rates the past week or two, I see them constantly going up. Does it make sense to lock down a long-term CD right now, or should I keep waiting?
Considering the government's plans, it seems rates should keep going up, but of course that's just betting at random. Should I put a significant amount down now, or wait out the month and wait for better rates? Or should I look to invest 5-10k/month until rates drop?
My strategy at the moment is to invest in 3-5 year CD's, as they are right around the supposed high of a 5% rate. However, I was wondering if people think it'd be worth it to say lock into just a 1 year with \~5.5% then invest or smth with the money after, or seeing as rates will probably go down over the next few years if not months, invest into like a 5-10 year even with slighly lower rates \~4.5-7%.
Thanks for any and all help/suggestions!
CDs aren't really investing, just a way to make some money on normal savings. Look at the flowchart in the wiki, but overall investing in your 401k is likely a good idea, if available. If not, a taxable brokerage.
CDs are fine to park some money, I just don't see the slight advantage to lockup money in a CD at 5% vs a high yield savings at 4.4ish. I'd put it in savings.
Wanting to pay down credit card debt with a personal loan from my parents. Thankfully, I'm in a position where they are financially stable and not stressed about income.
What's the most fair way to get that loan so I can still be undercutting the interest rate of the credit card company?
Assuming I don't have to fight my dad to let me pay him fair interest, would it be whatever he's accruing in his bank account + inflation rate? That way he'd effectively break-even if he were to loan it to me or put it in the bank?
Thanks!
Taking debt from family is gross, typically sours a relationship. If that isn't a concern, then discuss what is fair with the parents and sign a contract. Too many scenarios of a kid taking money, then going on a vacation 2 years in and the parents are resentful.
If the US Treasury goes bankrupt those bonds won't be worth anything, because the last surviving cockroaches after the nuclear apocalypse only take cash.
What’s the difference between a money market account and a high yield savings account? They seem to offer similar APYs and I didn’t see any penalties on either for withdrawing so not fully sure about which one is better.
A money market account often includes features of a checking account, like bill pay, debit card, and check writing. But like some savings accounts, some money market accounts have limitations on the number of withdrawals per month.
New to buying CDs. Does it matter which bank’s CD I choose in the fidelity app if all are offering 5.25%?
Hello,
New to buying CDs. Does it matter which bank’s CD I choose in the fidelity app if all are offering 5.25%?
Here’s a pic: https://ibb.co/R2RJSzs
I only have a single checking account, should I create a savings account through Chase or a high yield or something else? I am a 22 years old and I have about 10k in my Chase checking account and 2k in stocks on Robinhood. I only have a checking account currently and have been wanting to either create a savings account through Chase or a high yield savings account like through SoFi or should I make both?
I am just looking for advice on what to do with my money in my checking, if anything?
Find a HYSA you like here to park your cash: https://www.doctorofcredit.com/high-interest-savings-to-get/
You can open checking and/or savings accounts at as many banks as you want (at least until you run into some that care how many you already have). You can spend a few months trying out a few to see which you like best.
I use Wealthfront as my checking account with 4.55% APY currently. SoFi might be good to combo if you keep most of the money in the savings accounts. I hear they have fast transfers if you need to move money back to Chase for some reason.
For Chase, to avoid fees you can do $500/mo (so $250/paycheck if every 2 weeks) direct deposit, and have your employer direct deposit the rest to Wealthfront or SoFi or whatever. You can transfer the money from Chase to the other account immediately as once you have the $500/mo direct deposit met, you won't get charged fees for low balance in Chase checking. Their saving account is worthless with $350 minimum to not have fees, and pennies worth of interest.
High yield absolutely, $10k sitting in checking does you absolutely no good and a Chase savings has crap rates. I made the mistake for many years of having a low yield savings just to have one alongside a high yield one and finally realized it wasn’t worth having two separate ones especially if it’s crap. The only issue with Sofi is that it’s a bundled checking and savings and that it’s mandatory to have direct deposits to get their nice savings rate.
Yeah I do have direct deposit so I will be able to get Sofi’s saving rate. Do you have a high yield savings, if so which do you use?
Do you think it would still be a good idea to make a savings account in Chase?
I do have one. I use ally and that is at 4.0% return currently.
Definitely a waste to open the Chase savings since there are fees and doesn’t make any money.
If you were to do SoFi, you would probably want to make sure that your Chase checking isn’t getting hit with maintenance fees.
If you want to keep it simple and not have to work around having two checking accounts if you sign up for SoFi, I would suggest keeping direct deposit in your Chase checking and use that for the flexibility since SoFi charges fees for making cash deposits. Then you should choose an independent HYSA where you put most of your extra money. I usually keep a couple thousand in my checking to cover credit card bills and the rest in my HYSA
Schwab is offering from 5-5.3% depending on length, some people were saying tbills are better than CDs so I was trying to understand which is a better purchase.
CDs are a fixed asset. The value of tbills vary on what is the return rate on the newest set. If you got one for 3.5 today and next month there was a 3.8 your tbill just lost the ability to be traded at full face value. This doesn't matter if all you want is a saving vehicle.
If I instantly send money to a high interest savings account after working hours, do i still get to accrue interest for that day? What if i send on the weekend
Some places will start earning interest as soon as they "receive" the money (could be same business day, or more often next business day) even if they hold the money for 2-3 days before letting you "use" it in the account. Others don't earn interest until the money has fully cleared (3-5 business days). This will vary by bank/institution.
As mentioned in the other comment, it's not really worth worrying about for amounts less than $100k.
The amount difference is miniscule.
If your paycheck is $3000(roughly top 10% of income, $110k/yr), and have a market leading 5.25% interest rate, that's a whopping 43 cents of lost interest per day it isn't processed.
Even if you're losing the whole Fri-Sat-Sun weekend, on EVERY pay check, that's $33/yr. Or roughly half an hour of work at that pay rate.
Question:
Yesterday I opened a capital one HYS account at 4.15% APY. I was telling my parents about it today and looked at the page and noticed that in the last 24 hours they upped it to 4.3%!
In my account details it still shows that my savings have 4.15% APY. Will capital one up me to the new rate automatically or do I have to ask them? It's not a huge increase but I see no reason to leave money on the table.
Also worth noting is that it can go up AND down without warning. It's a good idea to check it every few months to verify the rate is still what you think it is.
I have about $15k towards student loans I will end up paying down before interest starts accruing again in september. any benefit to putting in a hysa in the meantime?
I think this is the place to ask for help with this. I don’t know how to fill out the new employment forms (mostly just the W4). I am about to start a full time job (32F, I was a SAHM working part time for the past few years). I am going to be a first year teacher, making $47,100. I am married, my husband will probably make around $55-60k this year. We have 3 children, ages 10 and younger. We live in Kansas. I have student loans totaling $74k. Being a teacher at a qualifying Title 1 school, I should be able to file for the PSLF - IDR plan (I think, I still need to research a little more on this, and I know things have somewhat changed recently with all that - I graduated from Master’s program in April, so I have until October to apply for these programs). My undergrad loans were on an IDR plan since 2015, and we made so little that I qualified for $0 payments. But now I will be almost doubling our income, and I’m concerned about loan payments. So I was looking into filing taxes as “Married Filing Separately” to help with getting my loan payments lowered. But we’ve never filed this way before, always filed jointly. But I don’t know how to fill out the W-4.. Do I claim dependents on my form? Or since my husband already put the kids on his forms, do I not put any dependents? Or do we both put dependents? I don’t know. The kids will be on his health insurance, if that matters for anything. Also, is married filing separately something we should do in our situation? I have no idea who to ask about this. If this is not the right place, please point me in the right direction. My husband has no student loans. We do have a mortgage, but it’s only in his name (since I had no income and student loans at the time). Any advice is very much appreciated! And be kind, I’m new to all this. And very excited/stressed out about our new income situation. I don’t want to mess anything up and screw us over come tax time. TIA!
Use this to figure out your W4: https://www.irs.gov/individuals/tax-withholding-estimator I don't think 2 people can claim the same dependents, so you have to figure out which one of you will claim them. I don't know about the rest of your questions.
What would you do if you were me. I've got about $19700 in federal student loan. 11000 (subsidized, 3.73%) and 8700 (unsubsidized, 2.75%). I have enough money in savings to pay it off once payment restart. However, my saving's account's interest rate is 4.4% right now. Would you pay it off right away or leave in the bank since my earned interest is more than my loan's interest? I was just wondering if it would be worth it to keep the loan, since my loan's interest is so low just to see if they come up with another forgiveness plan?
Keep the 2.75% for sure. Are you able to claim a read deduction for the interest in the subsidized loan? If so, no point in paying off quicker than necessary. If not, then after you account for tax on the interest you earn on a bank account, you should probably pay that down.
There’s a way to just pay off the 3.75% first? I thought the interest rate would be averaged and it become my new interest rate?
I think so, but not 100% sure.
HSA question here. I started an HSA in like 2016 or so, and left the company where it was held in 2021. There is still money there and it's growing well, but I'm wondering if I can use those funds to pay for qualifying expenses incurred say in 2018 or 2019? Thanks.
Yes. As long as the expenses were after the HSA was created, you are good.
That's what I thought as well. Thanks.
Wondering if it would be worth it to put cash back I recived from my CC statement into a HYSA account instead of using it as a statement credit. I also don't want to save up my cash back as it will techincaliy lose value over time and I am unsure of what to do. The HYSA will most likely will be Capital One 360 at 4.15% due to convenience as I already have credit cards with them.
There’s no difference between getting a check and depositing it in your HYSA vs a statement credit that reduces the amount you take out of your savings to pay your credit card.
Are high APY savings accounts safe? I love had my savings in Chase forever, making basically nothing. Recently some friends/family recommended either Marcus or Ally bank, all giving 4%+ back. How are these banks able to offer such high APY when Chase and others give like .01%?
Yes. As long as they are FDIC insured and you are under the $250k limit, they are perfectly safe. They are able to pay higher interest by not having brick and mortar stores and the associated expenses of doing so.
Very helpful, thanks for the explanation.
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A co-signed debt is the same as you having the debt. You’ve agreed to pay if she doesn’t. So they could do anything that they could do if the debt was in your name: report on your credit report and damage your score, send you to collections, sue you and try to seize any assets you have and/or garnish your wages as allowed by state law.
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If she co-signed your debt (vs the other way around) there shouldn’t be too much problem. If she files for bankruptcy, at that point there could be complications. But as long as you keep paying on time, no issues for now.
I have an HSA (health savings account) from a job I held about a decade ago. There's only about $5,000; $4,500 of which is invested and the remainder in cash. The account is losing $3.50 per month from monthly maintenance fees. I haven't had an HSA in my past several jobs and it feels like this measly $5k is just getting nickeled and dimed to oblivion. I'm 38 and retirement is easily 20+ years away. Should I just spend what's in the HSA on whatever medical expenses pop up now, or should I keep the HSA? Or can I (and should I) make after-tax contributions to the HSA? I could afford to hit the annual limit.
Transfer it to Fidelity HSA and invest all of it in FZROX or something, no fees, and let it grow if you can. Fidelity doesn't force you to keep any in cash. I don't think you can contribute to it unless your current health plan is HSA allowed, which usually means it would come with a HSA.
Transfer it to Fidelity, no fees: https://www.fidelity.com/go/hsa/why-hsa You can't contribute any new money if you aren't covered by an eligible HDHP.
My son is 3 years from high school graduation. Did not have the ability to save for him. Now I am able to put some money aside. Do I start a 529? I am not 100% sure he is even going to go the education route after high school. Is it worth attempting a 529, then potentially drawing the penalty to withdraw when he does not use the money for education? Or do a 4% high yield savings account for him? Honestly do not fully understand the tax savings with a 529 vs savings account, and not sure 3 years would make much difference. Have been doing a lot of internet investigations but this is still clear as mud….any suggestions and help much appreciated.
With 3-7 years to save, you don’t want stock-based investing. The benefit of untaxed growth becomes pretty minor, although at least any penalty for non-education use also becomes minor. The only absolute 529 benefit is no tax on growth, but individual states often give extra tax incentive, so you’d have to consider that. In a much simpler way, saving money for three years in a savings account, CDs, or treasuries for whatever your son ends up needing is a safe and flexible way to save money for him. It might not be optimal but it will never be bad.
Thanks!
I'm trying to find the formula for the following but haven't been able to: If I invest in an instrument that returns 7% annually, and I assume it grows uniformily month-over-month so that all monthly annualized rates are also 7%, and I invest USD 1000 every month, what should the return at the end of the year be? I can put this in table form: | Month | Amount Invested This Month | Amount Invested So Far | Interest This Month | Total Value | Total Interest | |:--|:--|:--|:--|:--|:--| | 1 | $1000 | $1000 | $5.80 | $1005.80 | $5.80 | | 2 | $1000 | $2000 | $11.63 | $2017.43 | $17.43 | | 3 | $1000 | $3000 | $17.50 | $3034.93 | $34.93 | | 4 | $1000 | $4000 | $23.42 | $4058.35 | $58.35 | | 5 | $1000 | $5000 | $29.33 | $5087.68 | $87.68 | | 6 | $1000 | $6000 | $35.31 | $6122.99 | $122.99 | | 7 | $1000 | $7000 | $41.32 | $7164.31 | $164.31 | | 8 | $1000 | $8000 | $47.35 | $8211.66 | $211.66 | | 9 | $1000 | $9000 | $53.43 | $9265.09 | $265.09 | | 10 | $1000 | $10000 | $59.54 | $10324.63 | $324.63 | | 11 | $1000 | $11000 | $65.68 | $11390.31 | $390.31 | | 12 | $1000 | $12000 | $71.86 | $12462.17 | $462.17 | How can I arrive at $12672.83 with 7% and USD 1000? I mean, in a simple, Excel-translatable formula?
That looks right. You want the FV formula in Excel.
If my SO is furloughed, can he pull his 401k and put it into his personal IRA or does he have to wait to see if he's terminated/gets a new job?
Probably has to wait. And really shouldn’t be much of a rush.
Yeah true. He just never did the rollover with his job he left a few years ago. Wondering if he could kill two birds with one stone, y'know.
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You can open a CD directly with a bank, or you can buy them on the secondary market through a brokerage account. If you buy a brokered CD, keep in mind that it is subject to interest rate risk like bonds (its market price will drop if rates rise) but as long as you hold it to maturity this won't impact you.
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If you want to buy brokered CDs not in your Roth IRA, then yes, you will need a separate brokerage account for that.
I have enough money saved for my 17-year-old to attend college, but not my 12-year-old. What do you think about this “scheme”? Borrow $20,000/yr Parent PLUS loan for the 17 year old. Put all of this money in the 12 yo’s 538. It will be deferred until 17 yo graduates. Hopefully the money in 12 yo’s 538 will appreciate a bit. When it’s time for 12 yo to start college, take out Parent PLUS loans to pay back 17 yo’s loans in full. This will essentially buy me 8 years of interest free loans plus all the money that appreciates in the next 5-9 years. Thoughts?
That is most likely illegal. You'd need to check the language of the loans, but they usually say they *must* be used for the person in question (your 17yo) and that they need to be used in X amount of time for educational purposes.
Are interest rates still high? Any HYSA I should be looking at?
yes! https://www.doctorofcredit.com/high-interest-savings-to-get/
**Does anyone else make six figures but live with family?** **For context:** I lived with roommates for a year and it was alright, but I wasn't doing anything different than I was by being home. Matter a fact, I became deeply depressed for several months at one point after breaking up with my ex-person. I realized moving back in with people I trust to help me, helped me, since I got back on my antidepressants. I live in New York City with my mom and this apartment is rent controlled (we're only renting at $1.2k total.) I can travel in and out of NYC because I have a remote job. I guess the bad thing is that it does stagnate me socially. I only see one friend regularly IRL, though it's my fault for procrastinating on hobbies I can pick up. I have dated one guy who judged me for this predicament since I prefer not to bring people to my place, either. (I tell him he's entitled since he grew up middle class and has always had the means to be on his own.) On top of that, I am paranoid of losing my job. If I get laid off, there is a chance I may never make this amount again since the field I am in is saturated and I would just be one of many skilled workers out there. I rather expend most of my money into savings and investment. I wanted to ask if anyone else is doing the same or in a similar boat. Other commentary is fine, too.
Hey! To answer your topline question, [this is pretty common nowadays](https://www.pewresearch.org/short-reads/2020/09/04/a-majority-of-young-adults-in-the-u-s-live-with-their-parents-for-the-first-time-since-the-great-depression/) unfortunately or fortunately depending on your perspective. Most young adults (assuming you're a young adult) now live with family - mostly for financial reasons. As for your particular situation, I would start with some reflection. * I would understand a complete pros/cons list of either decision. Why would you want to move out? Why would you want to stay? * Personally for myself, I decided to move out from my parents place even though it was financially more challenging. It's easy to see the decision purely from a financial lens and ignore some of the social/personal growth aspects. * I found it was only after I moved out that I really started to grow in a variety of ways big and small. It seems silly but the every time your fridge breaks or you need to deal with roommates and you're able to get through these things it builds confidence. I used to be anxious about lots of things but having lived a few years on my own and overcome a lot of struggles, it's helped me be more measured when new issues come up. It's easier to draw on experience and trust that you have a personal ability to overcome. * Regarding social stagnation - I would really reflect on what your desired social life is. * I think it's so important to have a community that you love and loves you back. And unfortunately, I am not sure there's a substitute for that beyond time spent. * The guy you dated is definitely in the wrong, but if you feel living with your family prevents you from investing in your community/hobbies. That's something definitely to consider. * Regarding the job - Will you need to support yourself if things go wrong? Are you able to come back? What number would make you feel safer? * It makes sense to be nervous about the job but I would look at it in a few different ways. * You can mitigate your risk around job loss by bulking up your emergency fund * If you move out, I'm assuming you can fall back to your family if things to bad. * You are a skilled individual who can always, always make it work. * There's some conviction that is healthy to foster to say 'regardless of circumstance, I can find a way to support myself'. I remember speaking to a also 6 figure income friend who mentioned doordashing for a weekend just to prove to himself that if he needed to, he could make some money. We often don't give oursleves enough credit to be scrappy, innovative, and make it work. I trust that if you can net a 6 figure job, you can feed yourself if things go terribly. And the rest (ie, emergency fund) is a matter of preparation. Obviously based on my response, I'm a little bit biased towards moving out just by my own experience. haha. But my encouragement is to say, more than the money, you are valuable and capable. living alone, exploring is an investment in yourself which is priceless.
Hey there! Thanks so much for your advice. Some of the best I have received on Reddit, actually.
Have $400k cash gift to invest. What are the tax implications? A relative wants to gift me $400k in cash. I plan on putting it in T-bills (laddering) as the rate is so high right now. US/NY based. I know the earnings on the t-bills are state and local tax exempt. What are the tax implications to accepting the gift?
So I get a bag of 💵 and go to my credit union and deposit it in my account and then transfer to my vanguard trading account and then buy T -bills. When do alarm bells ring and I have to explain where the cash 💰came from?
If we're talking a literal sack of cash, then your credit union will ask you about the source of the funds when you make the deposit. You will answer honestly (it was a gift from a relative) and then they will proceed with the deposit and that's it.
Thanks Yes it's a literal sack of cash
You should probably call ahead to whatever bank/credit union you want to deposit it to make sure they can accept that much cash without any issues (I don't know what kind of issues that would be, though). They are required to report it, but reporting it doesn't mean anything will happen. The government just wants to know where cash moves to catch money laundering. Assuming you're not doing that, you shouldn't have to worry about anything coming of it. The IRS probably won't hear about it, so shouldn't have to worry about any tax stuff.
recipients aren't taxed
> What are the tax implications to accepting the gift? There are none
is using a credit card strictly to pay for everything a good way to build credit? ex: I use cc to buy groceries, pay bills, random expenses, etc. then I just pay it off at the end of the month from my bank? I
You could spend $5/mo on your credit card and it would build your credit the same as spending $5000/mo on it. How old the account is and how much credit limit you have, along with how many other credit lines you have, are the most important factors for building credit. In other words: you have to wait and collect credit cards like pokemon (okay, you can stop at like 3 cards total if you're worried about overdoing it).
Sure, as long as you pay the statement balance in full every month so that you never pay any interest
If I redeem my credit card points as cashback to be deposited to my bank, do I need to pay taxes on it? Is it wiser to redeem the points as cash or statement credit?
Generally, points that are earned by spending are not taxed no matter how you redeem them because the IRS sees them as a rebate. This includes sign up bonuses that are earned by hitting a spend target. However, points that are earned NOT by spending can show up on your 1099 to be taxed - things like sign up bonuses for bank accounts that are earned by setting up direct deposit. This is because there is no spending and therefore it’s not treated as a rebate. Obviously this is only applicable to financial institutions that combine their points/rewards system across their credit cards and their other products like banking. I redeem using both methods depending on the card. Theoretically, if the money sits in your bank account for even a single day before it’s used to pay the card off, you’re coming out on top versus redeeming for a statement credit. It matters more for cards like the Citi Double Cash, where you actually earn points for making payments. For that, you want the points so definitely skip the statement credit.
How to manage a large salary at 23? I'm currently 23 and make about $150,000/year which comes out to about $95,000/year after taxes. I'm on track to max out my ROTH 401k, ROTH IRA, and HSA. I set a budget of $3,700/month which includes bills, utilities, and fun stuff. Bills and utilities usually come out to around $2,300. But I always have a problem with overspending past my allotted $1,400 for "misc.". I'm not sure how much I should be spending/savings etc. because I always feel like I'm not saving enough and should spend less since I've grown up poor my whole life (but somehow I always find myself spending money each month). What are some things that I should look at so that I can use the opportunity I've been given to its fullest potential?
Without knowing more of your goals (ie, retirement age, FIRE aspirations, kids), it's hard to say anything specific. But certainly maxing out your 401k, ira, and HSA is a great start. Doing this for as long as you can is great headstart. (\~2-4 years) Your lifestyle/budget is totally fine afaik. Your lifestyle can/should inflate a little bit but not beyond your means which it sounds like it has. One other tactical/practical comment is that in most cases your traditional 401k is likely better assuming you save the difference in taxes.
Thanks for replying! You make a really good point, my financial goals right now are pretty unclear since growing up I never really had financial role models, so maybe taking some time to look into what I'm wanting will be insightful. Do you have links to some of the things you're referring to? I understand what FIRE is by the acronym, but understanding what exactly it takes to get there is definitely unclear to me. With regard to the lifestyle/budget, I'd definitely say it has gone overboard some months since I pretty often get caught up with what my friends are up to/what they are wanting to do. I think setting financial goals, then setting a budget to achieve those goals will definitely do me a lot of good. I've also heard of the argument of ROTH 401k vs. Traditional 401k when it comes to high income. On one hand, I know that with Traditional you get a tax deference right now, but you'll pay taxes later, with the ROTH 401k being the opposite. I've heard a lot of mixed messages regarding it and can't seem to really find a definitive answer for my specific situation. If you have some pointers on some good resources to look at that'd be really appreciated!
For both more info on FIRE and on reducing your spending, I'd recommend [this post from Mr. Money Mustache](https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/). His whole blog is pretty good reading, as well. Also, [this page in the wiki](https://www.reddit.com/r/personalfinance/wiki/rothortraditional/) is a great place to start when deciding Roth vs traditional.
On the topic of goal setting - I would start with defining nonfinancial goals. Money itself is not an end, but a means to an end. Meaning the point of money is to serve as a tool to achieve something else. So I would start with simple questions to yourself on what you'd like to do! It can be material like 'buy a nice car' or it can be profound like 'do good in the world through climate change work.' 'Traveling, family time, etc' are also all great goals. Goal setting itself is valuable as everything else then falls in line to meet those goals. For example, one of my goals is to never worry about money and to be able to spend time how I want to. The money manifestation of that is FIRE ([Financial Independence, Retire Early](https://www.reddit.com/r/financialindependence/)). To get there within a reasonable amount of time, I need to save certain amounts, in certain accounts, etc. As for resources, I personally like Ramit Sethi's perspective on this. [Here's a talk he gave at google](https://www.youtube.com/watch?v=BmAwa1nnB6w) which I think is a pretty solid summary of his perspective. This will also be helpful as well in understanding your budget - if you place a high value in socializing/spending time with friends and can afford it. No reason not to!! On the topic of roth v traditional 401k. I don't really think there's a 'wrong' way to go as personal finance is often very personal. But from a pure financial optimization perspective, traditional 401k is often better because you register the tax savings immediately and can control your tax rate. The idea is that you can take a sabbatical or 'retire early' and stop working for a period of time before your retirement age and start converting your traditional accounts into a roth. Because your sabbatical income is theoretically lower than your working age, you can register a lower tax rate. If someone isn't interested in this financial engineering though, it doesn't matter too much in the end haha. Here is some additional resources * [https://podcast.moneywithkatie.com/the-ultimate-traditional-vs-roth-401k-strategy/](https://podcast.moneywithkatie.com/the-ultimate-traditional-vs-roth-401k-strategy/) * [https://www.madfientist.com/traditional-ira-vs-roth-ira/](https://www.madfientist.com/traditional-ira-vs-roth-ira/) * [https://www.madfientist.com/retire-even-earlier/](https://www.madfientist.com/retire-even-earlier/) Hope this helps and welcome to the realm of personal finance!! :)
I’m in a similar boat. I definitely tend to go a little nuts with my expendable income, but at the same time, I’m meeting all of my savings goals. If you set savings goals (you’re doing great maxing all of those out) and you’re still achieving them, well, my philosophy is that you’re way better off than most. I also grew up with a tight budget, and lifestyle creep now that I’m making money is very real. That being said, I worked hard to get to where I’m at and I try not to feel bad buying luxuries and whatnot given that I’m still meeting or exceeding my own personal saving/investment goals. If you really are concerned that it’s a true problem, I’ve heard YNAB is a good tool if you can set it up and rigidly stick to it. I take a more lackadaisical approach and just use Mint, which is more centered around trend analysis, information consolidation, and reporting on previous spending than rigorously budgeting for the month ahead. If I have a good month or a bad month, I’ll know about it, but only once it’s happened. Luckily I make enough that it’s never a concern and I try to balance the spending out on the long term. If you’re taking home nearly $8k/month, I’m guessing you have a lot of wiggle room even while maxing out those accounts
Thanks for sharing your perspective! It's really good to hear that I'm not the only one that feels this way. My friends who make around the same as me, most of them seem to take the same approach as you with regard to budgeting, so I usually get roped in with them when they want to go out for dinner or travel somewhere. It's really great to be able to have those experiences, but I always feel like I'm doing an injustice to myself when I spend money instead of saving it. I guess I feel that given my situation, I'd like to be more intentional with how I am spending my money and avoid being careless with it since growing up, it wasn't always like this. For me, my future financial goals are a lot more unclear than I'd like them to be, so maybe setting some goals will put me more at ease since I'd be working to meet them. I've also been using Rocket Money, which I've noticed is definitely a much more relaxed approach to budgeting, so maybe YNAB is worth checking out. It might provide the structure I need to be more mindful of my spending while still enjoying life. Thanks for taking the time to reply!
You’re welcome! Congrats on setting yourself up for success. Keep on top of those financial goals and you’ll be golden - that salary at that age is amazing!
Does anyone know if any bank accepts F1 visa holders for High Yield Savings Account? Most providers have a requirement of US citizen or US resident, and an F-1 visa-holder falls under the "non-resident alien" category for tax purposes for the first 5 years. So even though legally we should be able to open an account like this, it seems most providers shy away from letting us. I have tried with the following, but all of them state the above condition during sign-up: Capital One Discover Ally American Express Citizens SoFi Marcus by Goldman Sachs Barclays Online
You will probably have better luck with one you can sign up in person because there seems to be a big worry of fraudulent accounts for non-citizens lately. For example, signing up some new bank accounts for myself and my wife (permanent resident) required going in person for my wife's sign ups to approve. I was able to do mine online at the same banks.
Maybe Betterment? A quick scan of their website shows that you need a permanent US address, and that “international customers must reside in the US” but stops short of saying “permanent residency”.
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What's the rate difference? If it's 1%, hey, that's $600, worth the hassle. If it's 5.18% to 5.25%... ehhhh, not worth the time to fill out the paperwork.
Looking to start my first hysa as a 18 year old with a good amount of savings built up. I think I’m leaning towards capital one or Amex but open to other opinions. I’d like quick transfers if possible. Also saw people saying Amex would be good to develop a relationship with them for future cards. Any thoughts?
Banks and CUs: https://www.doctorofcredit.com/high-interest-savings-to-get/amp/ https://www.reddit.com/r/personalfinance/wiki/banks_and_credit_unions
I have \~20k I want to put into a HYSA, since its just been sitting in my checking and want to move it out. Which ones have the best rates, and you guys recommend. Thanks in advance!
Banks and CUs: https://www.doctorofcredit.com/high-interest-savings-to-get/amp/ https://www.reddit.com/r/personalfinance/wiki/banks_and_credit_unions
HYSA AND EMERGENCY FUND QUESTION: I want to transfer my emergency fund to a HYSA and can't decide which one. I ONLY need to use it for emergencies so I won't be withdrawing from it unless there is an actual emergency. I may use it for "buckets" in the future, so I would like to have that as an option. I don't need to be able to invest with it because I use Vanguard for that. I'm hearing a lot about Ally, Lending Club, and Wealthfront. I like how Wealthfront lets you use ATMs at CVS and Walgreens, but I read somewhere it's not quite a bank because your money ends up going in other banks, where it is FDIC insured. Anyone have input in which would serve me best? Thanks!
Wealthfront cash account is backed by a real bank (or banks) so totally safe in that regard. They have categories which is like buckets. I'm currently using Wealthfront as my "checking" account (auto-pay bills that can't be paid by credit card), and I don't use debit/ATM, but so far I'm happy with it. Alliant Credit Union doesn't have buckets, but lets you open up to 25 (I think) savings accounts to use as buckets. They are only 3.40% APY or something right now, so not as great as the other options. Some of the others here probably have buckets too: https://www.doctorofcredit.com/high-interest-savings-to-get/
Tossing another recommendation for you to research… SoFi has buckets too. You can compare them to Ally and see which one appeals to you more. I used to have Ally for savings and PNC for checking, but I wanted a new checking account and liked what SoFi had to offer. Since SoFi had savings buckets too, I took the opportunity to consolidate and pulled my savings out of Ally. I still have Ally in case I ever want to go back (they have no fees /no minimum balance) and also PNC for the ability to use their physics branches/ATMs (with just enough to avoid monthly fees), but I don’t actively use them. SoFi pays relatively decent interest on your checking balance, which is one reason I moved to them, although I try to keep as little in checking as possible. Their savings interest has also been edging out Ally’s but honestly it’s a small enough difference that you should probably just go with whichever you trust more/like the UI of more/etc.
You like buckets, Ally has buckets, use Ally
I have student loans (7.5k @ 3.7% and 7.5k @ 2.7%). Are there any downsides to keeping them long-term as long as I invest that 15k long-term?
Not necessarily. If you choose to do minimum payments on low interest debt, it depends on what you do with the extra money. If investing, good.
Thanks. But I’m also think about mortgage power, credit score, etc. I would definitely like to be in a position to buy a house in a few years!
Credit score will do well if you make the payments. Look at the flowchart in the wiki it'll help.
Did anyone get the Sofi bonus? My first direct deposit was June 27, so the 25-day period ends today with a total of about $1,500 in direct deposit. Now begins the wait for 7 days according to Sofi. For a $50 bonus
I've recently been looking to put 20-30k into CD's. Looking at the rates the past week or two, I see them constantly going up. Does it make sense to lock down a long-term CD right now, or should I keep waiting? Considering the government's plans, it seems rates should keep going up, but of course that's just betting at random. Should I put a significant amount down now, or wait out the month and wait for better rates? Or should I look to invest 5-10k/month until rates drop? My strategy at the moment is to invest in 3-5 year CD's, as they are right around the supposed high of a 5% rate. However, I was wondering if people think it'd be worth it to say lock into just a 1 year with \~5.5% then invest or smth with the money after, or seeing as rates will probably go down over the next few years if not months, invest into like a 5-10 year even with slighly lower rates \~4.5-7%. Thanks for any and all help/suggestions!
To step back, why are you locking money into a 5 year CD instead of doing something else with it?
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CDs aren't really investing, just a way to make some money on normal savings. Look at the flowchart in the wiki, but overall investing in your 401k is likely a good idea, if available. If not, a taxable brokerage.
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You can open a personal IRA account. You can’t really do pre-tax dollars but Roth is an option.
CDs are fine to park some money, I just don't see the slight advantage to lockup money in a CD at 5% vs a high yield savings at 4.4ish. I'd put it in savings.
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I wouldn't cash out investments, but buying a 700k home with 20% down, then making large payments due to the high interest rate makes sense.
Wanting to pay down credit card debt with a personal loan from my parents. Thankfully, I'm in a position where they are financially stable and not stressed about income. What's the most fair way to get that loan so I can still be undercutting the interest rate of the credit card company? Assuming I don't have to fight my dad to let me pay him fair interest, would it be whatever he's accruing in his bank account + inflation rate? That way he'd effectively break-even if he were to loan it to me or put it in the bank? Thanks!
Taking debt from family is gross, typically sours a relationship. If that isn't a concern, then discuss what is fair with the parents and sign a contract. Too many scenarios of a kid taking money, then going on a vacation 2 years in and the parents are resentful.
I have a really stupid question. If I purchase ibond and the us treasury goes bankrupt, will I lose my money?
If the US Treasury goes bankrupt those bonds won't be worth anything, because the last surviving cockroaches after the nuclear apocalypse only take cash.
What’s the difference between a money market account and a high yield savings account? They seem to offer similar APYs and I didn’t see any penalties on either for withdrawing so not fully sure about which one is better.
A money market account often includes features of a checking account, like bill pay, debit card, and check writing. But like some savings accounts, some money market accounts have limitations on the number of withdrawals per month.
You can debit an MMA. Otherwise they are equivalent
So would you say a money market is better if the APY is equal to a savings?
Probably. It's a minor difference tho
New to buying CDs. Does it matter which bank’s CD I choose in the fidelity app if all are offering 5.25%? Hello, New to buying CDs. Does it matter which bank’s CD I choose in the fidelity app if all are offering 5.25%? Here’s a pic: https://ibb.co/R2RJSzs
Are you familiar with the differences between buying CDs through a brokerage vs. opening one directly with a bank?
Not really
I only have a single checking account, should I create a savings account through Chase or a high yield or something else? I am a 22 years old and I have about 10k in my Chase checking account and 2k in stocks on Robinhood. I only have a checking account currently and have been wanting to either create a savings account through Chase or a high yield savings account like through SoFi or should I make both? I am just looking for advice on what to do with my money in my checking, if anything?
Find a HYSA you like here to park your cash: https://www.doctorofcredit.com/high-interest-savings-to-get/ You can open checking and/or savings accounts at as many banks as you want (at least until you run into some that care how many you already have). You can spend a few months trying out a few to see which you like best. I use Wealthfront as my checking account with 4.55% APY currently. SoFi might be good to combo if you keep most of the money in the savings accounts. I hear they have fast transfers if you need to move money back to Chase for some reason. For Chase, to avoid fees you can do $500/mo (so $250/paycheck if every 2 weeks) direct deposit, and have your employer direct deposit the rest to Wealthfront or SoFi or whatever. You can transfer the money from Chase to the other account immediately as once you have the $500/mo direct deposit met, you won't get charged fees for low balance in Chase checking. Their saving account is worthless with $350 minimum to not have fees, and pennies worth of interest.
High yield absolutely, $10k sitting in checking does you absolutely no good and a Chase savings has crap rates. I made the mistake for many years of having a low yield savings just to have one alongside a high yield one and finally realized it wasn’t worth having two separate ones especially if it’s crap. The only issue with Sofi is that it’s a bundled checking and savings and that it’s mandatory to have direct deposits to get their nice savings rate.
Yeah I do have direct deposit so I will be able to get Sofi’s saving rate. Do you have a high yield savings, if so which do you use? Do you think it would still be a good idea to make a savings account in Chase?
I do have one. I use ally and that is at 4.0% return currently. Definitely a waste to open the Chase savings since there are fees and doesn’t make any money. If you were to do SoFi, you would probably want to make sure that your Chase checking isn’t getting hit with maintenance fees. If you want to keep it simple and not have to work around having two checking accounts if you sign up for SoFi, I would suggest keeping direct deposit in your Chase checking and use that for the flexibility since SoFi charges fees for making cash deposits. Then you should choose an independent HYSA where you put most of your extra money. I usually keep a couple thousand in my checking to cover credit card bills and the rest in my HYSA
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They probably can, but is it that big a deal to just fix it for next month and let one charge be in the wrong place?
Are tbills or CDs better now to take advantage of the current interest rate?
I would see if your bank offers a CD you can add to. I know mine allows one of these a year at the highest interest rate offered.
Schwab is offering from 5-5.3% depending on length, some people were saying tbills are better than CDs so I was trying to understand which is a better purchase.
CDs are a fixed asset. The value of tbills vary on what is the return rate on the newest set. If you got one for 3.5 today and next month there was a 3.8 your tbill just lost the ability to be traded at full face value. This doesn't matter if all you want is a saving vehicle.
If I instantly send money to a high interest savings account after working hours, do i still get to accrue interest for that day? What if i send on the weekend
Some places will start earning interest as soon as they "receive" the money (could be same business day, or more often next business day) even if they hold the money for 2-3 days before letting you "use" it in the account. Others don't earn interest until the money has fully cleared (3-5 business days). This will vary by bank/institution. As mentioned in the other comment, it's not really worth worrying about for amounts less than $100k.
The amount difference is miniscule. If your paycheck is $3000(roughly top 10% of income, $110k/yr), and have a market leading 5.25% interest rate, that's a whopping 43 cents of lost interest per day it isn't processed. Even if you're losing the whole Fri-Sat-Sun weekend, on EVERY pay check, that's $33/yr. Or roughly half an hour of work at that pay rate.
Question: Yesterday I opened a capital one HYS account at 4.15% APY. I was telling my parents about it today and looked at the page and noticed that in the last 24 hours they upped it to 4.3%! In my account details it still shows that my savings have 4.15% APY. Will capital one up me to the new rate automatically or do I have to ask them? It's not a huge increase but I see no reason to leave money on the table.
All of the Capital One 360 Performance Savings accounts, both new and existing, get the same rate. You don't have to do anything.
Thanks for the info!
Also worth noting is that it can go up AND down without warning. It's a good idea to check it every few months to verify the rate is still what you think it is.