Archive for Finances

The savings game.

I’ve received about $40 in referral fees from ING Direct (use my referral orange code and both of us receive a bonus $13 when your account balance exceeds $100). That’s cool, free money is always good and I have no trouble (money or no) recommending ING Direct to those trying to save, here’s why.

  1. There are no fees – Yes, perhaps the most important reason to use them is that they charge you NOTHING. So if you save only a little bit of cash each payday your savings won’t be eroded by the usual list of fees charged by the big banks.
  2. They pay relatively high interest (currently 3% but better than the big banks). There are online or virtual banks that pay slightly higher interest rates, but they are not as user-friendly as ING and are not recommended for the less techno-savvy.
  3. Their online banking interface is user friendly, intuitive and allows you to push/pull money into other (less user friendly) high-interest accounts with ease, even for the less computer savvy.
  4. They unlimited accounts within your main account to sub-divide your money, and each account can be “nicknamed” so it’s purpose is clear.
  5. Automated savings plan – have them withdraw a specified amount from your main account at specific intervals (bi-weekly, weekly, monthly or daily), make this coincide with your payday and you won’t even notice the money disappearing from your main account.

Most importantly you can use the online banking system to increase, decrease or cancel the automated savings plan at any time (with a few clicks of the mouse). I usually contribute more mid-month than I do at the end of the month simply due to the bills I pay, but your mileage may vary.

You will also receive a bank card for this account, although if you are serious about saving I recommend that you cut it up. It’s important not to think of your savings as money waiting to be spent, and accessing it should be just difficult enough that you don’t explore that option each time you see something shiny.

The money takes time to build, for example $25 saved every paycheque will add up to $600 in one year, hardly enough to retire on but $600 more than you would have saved without it, and at the cost of $25 every two weeks it is hardly lifestyle changing.

More later….