It’s OK If Your Savings Account Doesn’t Make You Money

One of the basic pieces of advice is to make sure that your money is working for you.  And of course you want that work to yield maximum returns.  Finding good investments at low cost is a perfect example of a way to make this happen.  While you definitely want to make your money work for you, don’t get carried away.  See, some people fall into the belief that every single dollar has to make money.  While this would be nice in a perfect world, it isn’t always possible.  This is no more true than with a savings account.

The Savings Account: Then And Now

Until the recession that started around 10 years ago, a savings account was a great way to earn a little money.  You could stash money away, risk free, and still earn some interest.  It wasn’t a whole lot, but it was generally enough to keep up with inflation.

Then, the recession hit.  In order to spark the economy, interest rates fell to all time lows.  This was great for borrowers, but for savers it meant that interest rates on savings accounts fell to zero, or pretty darn near that level.  While interest rates have creeped up a tad, they still remain at practically historic lows.  Again, it’s great if your borrowing, but not so much for savers.

Should You Ditch The Savings Account?

With savings accounts paying nothing or close to it, the money you keep there isn’t earning you anything.  In fact, when you factor in inflation, a savings account could actually be costing you money.

So the logical question becomes whether it is time to get rid of the savings account.

To that, I say, take a deep breath, relax, and hold on to your savings account.

In short, no.  Don’t get rid of the savings account.

Why A Savings Account Matters

The fact is that a savings account still holds value in the personal finance world, and should be part of almost every household.  The value, however, isn’t in the interest it pays.  Savings accounts provide value in the easy access to money and the security in knowing that you have money available quickly.

Think of some of these possible scenarios:

  • What if your credit cards get stolen and you need to pay for stuff before new ones come up?
  • What if you have a natural disaster strike and cash becomes the only way to get goods?
  • How about if an unexpected bill comes your way?

In many cases, the window for getting access to money held in different types of accounts is shortening.  Without a savings account, you could theoretically sell an investment in a brokerage account, and transfer the money over within a day or two.

That’s all and good, but that’s still an entire day or two that you have to wait.  Is that a matter of life and death?  I certainly hope not!

Keep A Nominal Amount In Savings

The smartest strategy is to keep a small amount in your savings account.  If you have $100,000 in savings, chances are you won’t need access to that amount, and the potential lost earnings is meaningful.

But $2,000.  That’s certainly manageable.   And if that costs you, say, 2% a year, that amounts to $40.  I think that little bit of lost income is worth the peace of mind of knowing that you have quick access and are covered for anything that comes about that might require up to $2,000.

Don’t you?

Readers, what do you think?  Do you think savings accounts are obsolete?  Do they still hold value?  What is your strategy with a savings account?  Let me know in the comments below.  Thanks so much for reading!

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

The Best Digital Tools for Saving Money

In our increasingly digital world, there’s an app, website or browser extension for just about everything, including money management and shopping. It’s easy to do all your banking online, transfer money to and from accounts, and review and make adjustments to your investments. As for couponing, cash-back programs and digital promo codes make savings instant and accessible without clipping or storing.

Since most of us never leave the house without our smartphones and spend much of our time in front of a computer, using these tools is all the more effortless. Read on for the best digital tools to streamline your finances and savings potential!

Money Management Apps

 

budget.jpg

Mint. This all-in-one money manager helps you budget and track expenses. View your accounts, credit card statements and recent transactions, and keep track of your upcoming bills on one easy-to-use interface. Mint also allows you to view your credit score, and facilitates management for your investment accounts. Mint is available on desktop and mobile devices, so you can stay on top of finances no matter where you are. It’s free to create an account, and your security is always guaranteed.

Level Money. One of the hardest challenges of budgeting is knowing how much you can properly put aside each month for fun spending. Level Money helps by creating a budget for you to determine how much per month you can use for splurging after taking care of rent and bills. Their app tracks your spending and keeps your balances and totals easily viewable so you don’t lose track. Set savings goals, view all your bank and credit card accounts and even get bill predictions for the next month.

Wally. Say goodbye to overstuffed wallets full of disorganized receipts. Wally’s personal finance app not only keeps track of every purchase you make, but allows you to scan and store receipts. With a colorful and orderly interface, this app makes it easy to track how much you have and how much you’ve spent. You can also categorize expenses with customizable fields, which helps organize your budget better.

Digit. Stashing away money for savings every day isn’t an easy task. The days of collecting spare change into jars are dwindling, but as per the new norm, there’s now an app for that. Digit works with your bank account to analyze your daily spending and calculate an amount that can be put into savings every few days. With no account minimum required, unlimited transfers and a no-overdraft guarantee, this app is a smart choice for a risk-free way to start saving.

Shopping Tools

Application_for_online_shoppers.png

Coupon Sherpa. The purpose of the coupon is to save you money, but you don’t have to dedicate hours to clipping, stashing and saving them. Getting in the habit of checking for coupons for specific stores you plan on visiting is easy with savings sites like https://www.couponsherpa.com/. This site and app has a huge selection of online coupon codes, in-store offers and even grocery coupons. Their search interface makes it easy to look for specific stores, even if you’re already in the checkout lane.

Honey. This browser extension does the couponing for you. Whenever you shop online, Honey scours the internet for coupon codes or discounts that are applicable to your order and automatically applies them. Honey works with popular online merchants like Amazon, Expedia and Groupon, but also for restaurants and clothing retailers. Plus, you can also earn cash back for shopping with this extension. You can install Honey for free on all major browsers through https://www.joinhoney.com, including Chrome, Firefox and Safari.

Group Buying Sites. One of the best ways to save while still enjoying local activities and dining out is to check out group buying sites like Groupon or LivingSocial. These sites feature new deals every day for restaurants, activities or products near you. Often the savings are up to 70% off, with coupon codes making the savings even more considerable. Most group deal sites are available as mobile apps, too.

Rewards and Cash Back Earners

15816574788_c6fd1defc1_b.jpg

Ebates. Ebates is a popular cash-back shopping portal that helps you earn extra income every time you shop online. What shoppers may not know is they also have a browser extension that, like Honey, scans sites where you shop online for cashback offers and automatically applies promo codes to your purchases. You must be a member to earn rewards through Ebates, but it’s free to join and use.

Paribus. How many times have you made a purchase one day, only to discover the price on the item drops a few days later? When you use Paribus, you receive a price adjustment without any extra work! Paribus tracks your online shopping receipts and seeks price adjustment refunds when an original price drops. The service takes 25 percent of what you receive if they successfully find you a refund (and nothing if they don’t). If you don’t track prices after you make purchases, Paribus is a no-brainer way to get a little money back with zero effort.

Shopkick. The Shopkick app lets you earn rewards points, or Kicks, when you shop at participating locations. You earn Kicks just for walking into a store, and then on every item you purchase. The Kicks can later be redeemed for gift cards to a variety of popular stores or even restaurants like Starbucks. It’s comparable to a credit card rewards program (without pesky balances and APRs), and the app is completely free.

Ibotta. This handy rebate app allows you to scan barcodes, upload receipts and earn cash back for shopping at popular grocery stores, gas stations, pharmacies and even specialty stores. Your earnings go into an Ibotta account which can then be transferred to Paypal or converted into gift cards. The app also allows you to earn bonuses and works with many popular rewards programs to ensure maximum savings and cash back.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Planning Our Spring Break Trip To Madeira Beach, FL

Our last big family trip was to Disney World in November 2015.  It was great and we had a great time.  As soon as we were done, we started thinking about our next trip.  We didn’t want to do anything as big as Disney, but we wanted to do another trip to Florida.  This time we were thinking Spring Break.  In order to give ourselves time to catch up financially, we targeted the spring of 2017 for our trip.

Well, spring break is almost here, and we’ve gone ahead and planned most of our trip.  Here are some of the details.

Picking Our Spring Break Destination

We knew that we wanted to do a beach trip.  Our family loves camping in the summer and most of our trips seem to be centered around the beach.  We both have had various trips in the past to Florida, so we initially looked at two locations.

  • Panama City Beach. I did a six month assignment in 2005 down in Panama City.  During this time, I fell in love with the beaches and knew that a vacation there would be awesome.  I had a good feel for many of the areas and was able to get a good start on looking for places.
  • Tampa Bay area (Maderia Beach, to be exact).  When my wife was younger, they did family beaches to this area.  We actually went a few years back with my in-laws.  My son was only a baby and my daughter hadn’t
    Image from MorgueFiles courtesy of Lash.

    even been born yet.  Still, with us having been down (my wife many times), we again knew the ins and out.

We actually started planning last fall and the price comparisons weren’t even close.  Since we were limited to the week that the kids are off for spring break, we knew we’d be hitting peak times.  The pricing for comparable units (we planned on renting a condo) was about 30% different.

So, Madeira Beach it was!

Lodging

Our lodging was the first thing we addressed.  We knew that things would be pretty full with us competing with peak spring break times. There were a few different options along the beach and near a popular boardwalk and started contacting owners or managers.  We ended up finding a unit in the same building where we took our last trip.  The pricing was pretty high, but we knew that it would be going in.

We put a deposit down and were able to cross a big item off of our checklist.

Transportation – Driving

When we started planning the trip, we said that we would drive down. With every 4-5 hour trip we took, we lamented on how things would go for a 19 hour drive, which is about what it would take.  Our plan was to do a considerable amount of driving at night, splitting time for the overnight hours.

Our driving options would likely be centered around renting a minivan or SUV to get down there.  I have a pickup truck and it would be ill suited to drive down with all of our stuff.  My wife does have an SUV but we are leasing, and putting the miles plus the wear and tear were just not something we wanted to do.

Renting a minivan or big enough SUV looked to be around $700-1000 for the time we were looking.  Additionally, we factored gas to cost at least another few hundred.

Transportation – Flying

We started looking at flying.  For our last two trips to Florida, we’ve flown Delta.  Their prices were ridiculous.  It would cost around $3,000 to fly down there.

Then we found Southwest Airlines.  We’ve never flown but have heard great things.  They’re cheaper.  You don’t pay for bags.  And, the prices were a lot more reasonable.  Still, flying down from Detroit would cost around $2,000.

My wife did some reading and someone suggested checking different airports.  We looked at the other airport in Michigan that they fly out of and the pricing was no different.  However, we started looking at airports in neighboring Ohio and the difference was staggering.

We ended up finding a deal where we fly in and out of Columbus (about a four hour drive) for a total cost (with all taxes and fees) of $1,220.  This is a non-stop flight there and a quick (1-hour) layover on the way back where we don’t even switch planes.  All at times that were ideal.

We decided to do this and sign up for a Southwest Airlines credit card that will give us 50,000 free points.  This, combined with our mileage, will likely earn 1-2 free flights the next time we want to fly down to Florida.

A Night At A Luxury Resort

The pricing on our flight had us flying down one day earlier.  If we would have flown down on the original day we’re staying, it would have cost around $300 more.  So what are we going to do for a day?

Stay at a brand new 4-star resort for a night.  The room we’re staying at would normally go for $475.  How much are we paying?  Not a penny.

Last spring we surprised my son with a one night trip to Great Wolf Lodge for his birthday.  It was just for him and he loved it, as this is about his favorite place in the world.  We stayed one night and we were having such a good time that we decided to rent a room at a nearby hotel so we could stay at the water park until the end of the day.  We booked online at a Howard Johnson a couple miles up the road.

When we got there, there were huge problems.  The manager was rude to us, rude to his employees (he made someone cry in front of us) and the place was filthy.  We ended up walking out.  I contacted Wyndham, the parent company, and explained what had happened.  They provided me a free night at any Wyndham location in the United States.  So, when we found that we could use the points on our early arrival at a 4-star high rise on Clearwater Beach, we jumped.

Other Costs

We won’t have a car while we’re down there, but that shouldn’t be a big deal.  We’ll take Uber rides from the airport to the hotel to the condo and back to the airport again.  We can probably use them to go out and make a grocery store run when we get to the condo.  Everything else we need is within walking distance.

We’ll have to pay for parking at the Columbus airport, which is around $7-10 per night.  This is a welcome surprised since Metro Airport (Detroit) is at least double that.

All in all, we are really looking forward to our vacation.  We love the beach. The kids do as well and we’re excited to show them the ocean, as well as build some more great family memories.  Since we’ve worked hard to find savings in multiple areas, we’re excited to have a great time on what looks to be an affordable budget.

Readers, do you have any spring break plans or big trips planned?  How have you saved money?  Share your thoughts in the comments below.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

3 Ways We’re Streamlining And Saving On Christmas

The Christmas season is fully upon us.  We have finished our decorating and are getting ready for all the shopping, family gatherings, and seasonal activities.  A big part of Christmas has become gift giving.  This is true for us, especially with younger children.  Although we have our Christmas gift fully funded, we came up with some ideas to save us time and money.  Here are thee ways that we’re streamlining and saving on Christmas this year.

Saving Time And Money On A Gift Exchange

On my wife’s side, there are six adults that exchange gifts.  Traditionally, we had a budget and list for both of my in-laws, plus my sister-in-law, as well as her boyfriend.  That was four people to buy for.  This year, we all agreed to a system where we drew names and each person will buy for one other person out of the four people not in our household.  This means that between my wife and I, we’ll only have two people to shop for instead of four.  This is also less gifts to wrap.  We also put a cap on the budget, which will save us around $50 versus the budget we had previously in place to cover all four people.

Using Gift Cards

When we signed up for our new cell phone plan, we got lots of Best Buy gift cards as we traded old phones in and signed for new plans.  We used a lot of these up front, but still ended up with some left over.  We plan on using these for some stuff for each other that Santa might get.  This will basically be allowing us to buy gifts using money we’ve already spent!  This will probably save us around $100.

Cutting Back On Each Other

My wife and I always joke about couples that have been married a long time who don’t get each other anything.  It

The holidays are here.  We're saving on Christmas putting time and money back in our court. Image from Morguefiles courtesy jzlomek
The holidays are here. We’re saving on Christmas putting time and money back in our court.
Image from Morguefiles courtesy jzlomek

always seems to happen, but so far, we have stuck to buying each other a number of gifts.  Although we’re not giving up all gifts, we decided to both scale back.  This will allow us to start setting money aside for other long term goals.  It’s nice to give each other gifts, but we’re both realizing that having the money ready for other things is just as fulfilling.  This should save us at least $200.

Saving On Christmas: Time And Money!

We’re looking forward to just these three things making a difference on Christmas.  Together, this would save at least $350, and maybe more.  It’s also less time spent on looking for gifts, wrapping gifts, and tracking the gift buying list.  That’s less stress, more money, and extra time.  For my money, those are some pretty worthwhile benefits.

Readers, are you doing anything different this year to save money or time?  How have your shopping and gift giving habits evolved?  Please let me know your thoughts in the comments below.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.