Since I must practice what I preach, its only right that I share my own personal finance situation with you. My finances are divided into the 3 Major Categories: Retirement, Savings, General.
My retirement situation is still in the infancy stages. Being in my twenties, the balances of my accounts are relatively small. I take part in my company sponsored 401(k). Unlike many 401(k)s, this program offers access to a few great funds and serves my needs. I contribute the maximum need to get a full company match (which is provided in company stock). Complementing the 401(k) is a Roth IRA through a 3rd party. The provider is not the best and I am in the process of rolling the Roth into a better program. All together my contributions are about 15% of gross salary.
Savings can be more complicated than just the basic account. At any given time you could be saving for 4 different things, as is my situation. The solution: Multiple Accounts. ING Direct is my primary provider for savings, I have two accounts with them. The first is my Emergency Fund. This is money set aside with the hope I’ll never need it, it just sits there and grows. Whenever I experience a life change (moving, marriage, kids, etc…), the account will grow to reflect my new needs. The second account holds short term savings plans. At the moment, it holds cash for the next car payment, savings for IRA Rollover, and my most recent paycheck. The down payment on my car was house here as well. My employer, another bank, houses a third savings account. This account has existed since I was 10 and currently holds savings for a big ticket purchase in 2008.
My general accounts include: checking, brokerage, and debt. My checking account is linked with my employee savings account for overdraft protection. It is also the source of transferring funds to/from ING Direct and making credit card payments. I do not recommend a brokerage account for anyone without either years of experience or a professional education in Finance. I do have an account with Share Builder (recently purchased by ING) to test investing theories and strategies in conjunction with other Finance professionals to exploit market inefficiencies. Last and least is debt. The car loan is by far my largest debt. To learn more about my car loan see the entry regarding my car purchase. The only other debt I carry is a credit card. I endorse credit cards only for people with the means to pay the balance IN TOTAL every month. I have a Chase Rewards Card that provides cash back on all my purchases. Current legislation also offers greater consumer protection for credit card users.
I manage all my accounts online through Mint.com .
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. |
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