Tales from the Wallet: How to Manage Many Financial Accounts

kate spade new york 'signature spade - quilted lacey' zip around walletHow do you manage your money without getting stressed out with a million accounts? When we talked about automatic investments a few weeks ago, some readers noted that having too many accounts was stressful to them. So let’s talk about some easier ways to manage the money, how to get a bird’s eye view of your holdings, and some tips to make your general financial life easier.

First: I hear the stress! My husband and I currently have:
– Two checking accounts (personal and business)
– Three savings accounts (personal, business, and online-only long-term savings with Capital One, our emergency fund)
– A money market fund at Schwab
– Investment accounts at Schwab (from my single days) as well as at Vanguard
– FOUR retirement accounts managed at Fidelity, ING, American Funds, and Vanguard: my old rollover IRA from my law firm days, my 401K from my non-profit days, my husband’s 401K, and my SEP-IRA now that I’m self-employed
– A leeetle bit of money in treasury bonds (through Treasury.gov)
– My son’s 529 account (through Vanguard)

On the debt side:
– Three credit cards (two personal, one business, all through Visa/Chase). (In theory, I have lots of store-specific cards as well — Macy’s, BR, etc — but I never use those unless there’s some big savings to be had.)
– Mortgage (managed through Wells Fargo).
– One final student loan for my husband (2.5% interest) (managed through Sallie Mae). (We paid off everything that was higher than the interest on our mortgage payment.)

- Get a bird’s eye view of things.  I manage everything through Mint, but I also have Quicken (which I’ve been too lazy to set up) and, years ago, I used Microsoft Money. I highly recommend you use *something* to give you a “bird’s eye view” of things, whether it’s just an Excel spreadsheet or more. I think Mint is easiest, but I know some people are uncomfortable putting their information (account numbers, passwords, etc) in the cloud. I’ve read enough about Mint’s security to believe that my money (i.e., the thing behind all the passwords and info) is secure, but I’m the first to admit that it’s a leap of faith.)

- If you have duplicate accounts (e.g. for me, the two personal credit cards or the multiple savings accounts), have a reason for it. For example: we use my husband’s old credit card for very limited, usually automatic payments that we want to keep track of — right now we use it for Seamless Web, Zipcar, and Fresh Direct. It helps to focus our attention on those expenses every month, and if anything is unusual or egregious we take a closer look. Similarly, one might say we have too many personal savings accounts right now — one at Chase, one at Capital One, and the money market fund at Schwab. But: Chase is easy access, but at a very low interest rate, so we only keep a small amount in there. Similarly, the Schwab money market fund has very low interest, so we only keep a small amount in case we want to make any sudden investments in the stock market. (About five years ago I used the Schwab money market fund as my emergency fund because it had 5-7% interest — but those days are long gone.)  Interest rates are still lousy right now, but Capital One offered a decent amount a while ago so we decided to use it as our emergency fund. (I don’t think it’s the highest interest rate you can get any more, but it’s not so low that it’s worth it to change.)

- Limit what you’re logging into. Another way to simplify your task to manage the accounts is to be able to see as much of it as possible from one log-on.  I have the majority of my checking/savings/credit cards with Chase, and I can see a lot of the information (and move money around) very easily with one log-on. I can move money into or out of our emergency fund with Capital One through the Chase logons as well.

- Know when things are due. Mint tells you when your payments are due, but it doesn’t seem to notice if you’ve already paid the bill, so I use “Remember the Milk” to remind me of the monthly due dates for our three credit cards, and as soon as I pay the bill in full I check it as “done.” Even though the student loan payments are automatic deductions, I have that as a repeating reminder in RTM as well — then when I see that it’s posted I check it off. This is a big reason I like to put all of my charges on my own Visa card rather than store-specific cards — I know when it’s due, and I can see it all in one place.

- Know what’s off your radar. For example, Mint can’t track the value of treasury bonds any more. So I have no idea how much they’re worth right now. It’s enough for me to see the line item in Mint that says it was worth $X a million days ago, but I know that it’s off my radar. Similarly: I find Mint to be kind of useless for tracking individual investments like stocks and mutual funds. I don’t know if it’s a glitch unique to me, but the big “investment” chart in Mint shows the same stock on different lines, for different prices, and it doesn’t remove stocks that I’ve sold. So I keep an eye on the big picture (what the total account is worth) and only check how individual stocks and funds are doing about twice a year.  I definitely need to go into my various investment accounts and do some pruning — figure out my percentages, re-balance, maybe sell some under performers — but that will have to wait for another day. (And yes, I’ll write about it when I do it — if anyone has any tips on balancing your various portfolios for the first time, I’d love to hear ‘em.)

Readers, do you juggle a million different accounts? How do you keep track of everything? What ways have you found to reduce the stress of managing your own money?

Comments

  1. Link to yesterday’s WSJ story on the best apps for managing finances. http://tinyurl.com/96kcq8o

  2. 401(k) for the Self-Employed :

    Kat,

    Yesterday, the Mint blog ran a story on 401(k)s for the self-employed. It seemed like a better option than the SEP IRA. Just FYI.

  3. Callmemaybe :

    Threadjack…looking to purchase my first home in NY, but first want to get a better handle on the buying process. Are there any steps my husband and I should be taking before we get pre-approved for a mortgage? Then, does it matter where you get pre-approved? Are there benefits to getting pre-approved through a bank vs. through a mrotgage broker?
    Also, are there any resources (websites or books) that you could recommend about the whole home buying process?
    Thanks so much!!!

    • We were told to “consolidate our money.” Meaning, between DH and I, we probably had 8 different accounts that we cobbled together to give the mortgage folks an overall financial picture. Our mortgage guy asked us to put all the money we’d be using for the down payment in one place.

      Get a really good home inspector. Ask for recommendations. If you don’t get a VERY DETAILED report, you got a crappy one. (We bought an older house so we were extra careful…but this applies to all homes).

      One other random thing–depending on your income, you may want to plan ahead for taxes. In our case, writing off all the mortage interest and closing costs gave us a big fat refund check. We could have/should have adjusted our withholdings.

      • karenpadi :

        Second consolidating money. It’s a pain to have all kinds of far-flung bank accounts when it’s time to approve the mortgage and write letters to the lenders explaining why you are only now moving all the money around.

    • Glink’s “100 Questions Every First Time Home Buyer Should Ask” was very informative when we were buying. I believe she also has a syndicated finance/real estate radio show (or regularly shows up on someone else’s).

    • I bought “Home Buying for Dummies” at my local bookstore. It was actually a great help.

    • Are you in NYC? Real estate here is crazy, but given the number of times we had to submit and update our mortgage application, REBNY statements, co-op applications, etc., I can say that the more you can consolidate your money the better. We closed on a co-op in Brooklyn in March, a year and a half after we started looking. In that regard, it wouldn’t really have mattered who we got pre-approved with since the interest rates had changed so much. We got pre-approved through Citibank because it’s where we bank. Once our offer was accepted on this apartment, we called a bunch of other banks and brokers to get rate quotes. They were all pretty close to what Citi offered, we liked their responsiveness over that year and a half, and they gave us a Mortgage Rate Protection Plan in the event rates dropped within x months of our closing, so we went with them.

      Amazingly, I kept checking their rates and the interest on a 30-year dropped .75% by the end of July, so I called them up and they adjusted our rate just like that – without any need to refinance.

    • This may be too late on this post, but what are you (or do others recommend) doing with the amount you have saved for a down payment? In NYC, a down payment and closing costs are a large chunk of change that I feel silly leaving in a liquid account earning close to 0% interest. But, I don’t want to tie it up just in case the right home comes along and we need to act fast . . .

      DH and I were looking last winter but then decided to wait a year to give our savings an extra bump to let us look at a slightly higher price range. Now we have our down payment sitting in an online account making nothing for another 6-12 months.

      • We had ours in an ING savings account for the same reasons. Luckily, a down payment and closing costs in NYC is large enough that even though it wasn’t making as much as if it were invested, at least the interest payments were noticeable. Having it readily and quickly accessible was helpful, as was not having to transfer funds from investments, thus spurring another round of requests and affidavits for the bank.

  4. I use Vanguard to keep track of all our investment accounts because they are our primary investments (SEP-IRA, his Roth, her Roth, our taxable). There is a line item which is kind of clunky that lets you enter outside investments. Once a quarter I will update that line item with his 401k and her 401k. The 401k’s only have 1-2 investments in each so it only takes a couple minutes to update the number of shares and in the meantime the website keeps track of the daily fluctuations in share price.

    Vanguard’s website will then output the stock/bond ratio and let me know if I need to rebalance. I also like Morningstar’s portfolio X-ray feature for a more detailed view of international/domestic, corporate/gov bonds, small/mid/large etc. but these days I mostly use my own spreadsheet to rebalance once a year.

    Our money market, checking and savings are all at 1 credit union so we keep that simple.

  5. I really appreciate that this site has these posts and I always read them, but am I the only who feels seriously delinquent about how I manage my money after reading them? I know this is not a fashionable thing to admit, but, honestly, I just want to not think about any of this, ever.

    I’m not totally irresponsible – I never carry a CC balance and I contribute to a pre tax retirement account, but beyond that I just find all this insanely overwhelming. I think if I am being totally honest, my life’s goal is to just make enough money to never have to think about money. Obviously, this is not a very practical goal.

    • I completely agree. I do pretty much the same thing, too. I hate having to think about it — I find it very stressful. It’s not so much confusing as just … argh.

      • karenpadi :

        What really helped me was taking a 6-session community adult education class on personal finances. It was taught by a Morgan Stanley adviser and we talked about many of these topics.

        It was ungraded but part of our “homework” was a financial inventory, define a personal financial “goal” (I call mine a philosophy) and to make a financial plan. It was the best $42 I’ve ever spent on education.

    • Same here. I’m responsible with money and very good at squirreling it away, but not so good at investing. I also have 3 existing 401Ks and really should consolidate, but I just get overwhelmed and bored when thinking about it.

      I do like Vanguard – they helped me move another 401K and were very nice. I have a lifecycle fund with them too, to which I automatically add money every month. But I totally feel like I am not being a very good adult women of the 2010s because of my lack of interest in financial matters.

      My other I-am-so-uninformed-about-finances-confessions:

      Credit cards – Basically I pay off my credit cards every month because I am really not sure how the interest works (only on the purchases you’re late paying? On new purchases the next cycle? What about the cycle after that? When does it end??) except that it can make your credit card balance grow apparently exponentially.

      401K fees – A colleague at my previous company did an analysis of the fees our 401K plan was charging and they were astronomical, so I know the effects fees can have but don’t pay much attention to them now (fortunately I am in the federal TSP which has low fees).

      Debit cards – I really don’t understand debit cards. They scare me and I refuse to have one. I have an ATM card that I can use at the grocery stores and Target and get cash back, but you have to enter the PIN. I am scared to have something linked to my checking account that would just require someone to forge my signature. I know that you are (allegedly) not responsible if your account is compromise, but this happened to a friend of mine and she basically could not use her checking account (i.e., all her money) for a couple of weeks while they straightened things out. Not sure what she was supposed to do if she had bills coming due. Meanwhile I’ve never had a problem contesting a fraudulent charge on a credit card, so I’m inclined to think of credit cards as much safer than debit cards.

      I’m not proud of any of these things – I really need to learn more about finances.

      • I highly recommend “The Money Book for the Young, Fabulous and Broke” by Suze Orman and “Nice Girls Don’t Get Rich” by Lois Frankel (a follow-up to NGDGTCO).

        Debit cards are like the ATM card that you have. Your ATM card is a debit card. Debit cards make you enter the PIN. If it has a MC/Visa symbol on it, then you can opt to run it through “as credit”, and then just sign instead of using the PIN. This is more expensive for merchants, so they prefer you use it as debit.

        With credit cards, you’re right on the money. Paying it off every month is the wisest. Interest is charged on any past-due balance, i.e., what you don’t pay off. It never goes away until you pay it off. If you carry a balance (i.e., don’t pay it off), then the credit card company can often increase your interest rate. This can also happen if you miss payments.

    • I love these posts as well, but I find that I have a somewhat “play it by ear” approach to managing my finances. I have certain debts to pay down and savings to accumulate, and nothing else is really on my radar right now. I sometimes do have a bit of anxiety that I’m “doing it wrong,” especially when all these other women seem to have it together!

    • I recommend Mint dot com to get started. They make it so easy.

      • Honestly, I kind of agree! The last time we did a survey (I need to get another one ready) everyone said they wanted more financial stuff, and one can only do so many “how to open an emergency fund” posts, so I try to branch out, sometimes based on stuff I’m curious about, sometimes on things I heard readers asking about. Rebalancing my portfolio (and possibly consolidating my various retirement accounts) is going to be a huge headache, but I figure a) I’m doing something I’m “supposed to” and b) then I can write about it for you guys. :) We’ll learn together.

        • “We’ll learn together.”

          Kat, I love your attitude about this. It’s one of the many reasons why I keep reading this site.

          • I love the “We’ll learn together” attitude. Kat, maybe you could get a personal finance/debt blogger to go over some of your finances with you and write a guest post, then you could help them a wardrobe or “how to buy clothes that last” type post for them?

    • TO lawyer :

      I feel like I’m missing something. I track most, if not all of my expenses (on an excel spreadsheet), but some (most) months, I’m just not sure where my money is actually going. I’m saving some, but I feel like I should be saving more given how much I’m making versus my expenses.

    • I feel the same way. I was actually thinking about asking the hive how to manage money because I have a lot of these concerns. I feel stressed out and overwhelmed by multiple accounts, for example, and also just keeping an eye on things (my parents are big fans of Quicken, but honestly, I hate it). That said, I’m not a total financial mess – I always pay my bills in full and on time, have never overdrawn an account, save for retirement, etc. I just struggle with the management of it all, and I’m not even sure this is something that calls for an actual financial planner. I just find all of this personal financial management very, very stressful.

    • long-time lurker :

      Yeah I violate the having too many accounts rule and others and generally do everything in my head and don’t balance my checkbook, but it works out for me. It sounds dumb but sometimes if I am acutely aware of my exact funds, I’m tempted to spend more vs. save. I try to make the savings on autopilot with auto transfers (to multiple accounts that I do not know the exact amounts of at this moment) and just live on a general rough, much smaller amount each month. H and I pay extra to the mortgage when the quarterly statements arrive in the mail with the little envelope for extra principal. Every now and then I will look at my 401K and brokerage account and assess if I’m losing money/gaining money and what is doing well and add more to that, and I pick stocks by googling “10 best stocks” and similar and running them by my uncle who is a financial planner. Any stocks or funds I’m holding is for the long term. My H and I have separate finances for the most part which many people think is odd, as well. But it works for me, which is the point I think in all of this.

    • I really like LearnVest. It’s very similar to Mint, but geared to women. Some of their articles are annoying, but overall I find it helpful. Plus, I like the fact I can choose to pay a small fee (or more) to have one of their financial planners help me out with this sort of stuff. You can also as friends for a recommendation for a local financial person. Once I deal with a few obvious issues (debt from an emergency, more money in savings), I’m planning on setting up an appointment. I figure I will be overwhelmed now or later, might as well try to figure it all out now and hopefully save more for the future.

    • One way to not have to think about money is to make as many of your savings and bills as you can automatic. Here is how my husband and I handle it:

      We have 2 checking accounts, an “everyday” account and a “fixed bills” account, as well as a savings account and a retirement fund. My job allows me to split my paycheck direct deposit between multiple accounts, so that is how we fund the different accounts. The everyday account is for groceries, credit card bills, bills that change every month (gas bill = $400 in winter, $20 in summer, for instance) and anything else we want to pay close attention to. The fixed bills account is at the same bank where we have our mortgage, and it is also the account that we pay our student loans, car payment, daycare bill, etc. To set it up, we took each bill, rounded up to the nearest $50 (to make it easier to do the math and give us some buffer) and added it all up – that is our monthly requirement for that account. Then since I get paid every 2 weeks, I divided that monthly requirement in 2, added a little bit extra to use as an emergency buffer, and set that as the amount to be direct deposited each paycheck. Then we set all the bills to be automatically withdrawn, and that account is now on autopilot.

      There are 3 really nice things about this system – 1) I never have to worry that we won’t have enough in our regular checking for our mortgage or other bills, and its all automatic – they are never paid late, and there is always enough money in the account. 2) We don’t have a checkbook for our fixed bills account, and we keep the debit card in our safe, so while we can get money out if we need to, its just enough of a pain that we don’t dip into it unnecessarily 3) Since I have 26 paychecks a year, there are 2 “extra” paychecks that go into the account, plus the extra buffer that we add in. This is our “life happens” emergency fund that we can use when have unexpected expenses like needing car repairs or a new washing machine or finding out we underpaid our taxes (oops), and I generally use the extra as a Christmas presents fund if we haven’t had too many unexpected expenses that year.

      I hope I explained this clearly enough, let me know if not and I can try to put some actual numbers to it. Its great to not have to worry about more than half our bills, I just login to the fixed bills account once a month to make sure the money is all rolling in and out the way it is supposed to.

    • Don’t worry, you’re not the only delinquent one about money management.

      Signed,
      A banker who kept the bulk of her savings in a cheque account for the first 20 years of her career.

  6. Retirement :

    Sort of on topic TJ: Anybody mind sharing what they have socked away for retirement, and the general financial profile? I can’t tell if we’re anywhere near “normal” for our age.

    DH and I are both 28, with two MBAs and a JD between us. I’ve been making “real” money for the past two years; he’s been in school until this past summer. We have savings, and own our house, and have about $100k set away for retirement. That seems like enough for now, but I get a very nagging feeling I will be 60 before I know it.

    We don’t have kids, and i know college savings will also come around quicker than we know it once we do. Is it worth it to squirrel away more $$ into various vehicles now, or enjoy our last few child-free years with the extra cash? (We’re already aggressively paying down the student loan debt, don’t know that we’d put any more toward it at this point).

    (FWIW, we’ve done the “retirement calculator” thing and it’s very confusing since we have all kinds of accounts, both pre- and post- tax. Plus, I don’t believe them.)

    • When it comes to retirement planning I need people to break things down in the simplest way possible. I would recommend finding a financial planner in your area (maybe like an Edward Jones or something) that can do an analysis for you on your expected needs during retirement.

      Oftentimes this will segue into how you need to put money in the stock market because it will grow at a faster rate. My husband and I had this done and found it helpful, and as “compensation” I transferred an IRA over to our planner. For us it was nice because it was like, “to maintain your lifestyle you need to save X every year from now until you retire *on top of* your 401ks and existing investments.” We don’t want to invest money with him yet because they had a 50k “floor” before they would actively manage our portfolio, and we’re not there yet.

      • A $50K floor? My Edward Jones person was happy to take a few thousand dollars when I started with him.

        • My guy wasn’t with Edward Jones – he was with a different, smaller firm, associated with a large company. So maybe they had different rules? I couldn’t find an Edward Jones that was convenient for me to get to.

    • emcsquared :

      DH and I are a year or two older than you, both with JDs, both practicing for 4 years. We’ve got between us (1) three 401(k)s totaling $140K; (2) one TSP totaling $4K; (3) two Roth IRAs totaling $30K. And then some general savings and investments that aren’t earmarked for retirement.

      DH wants to retire at 55, and I’m not sure I want a high-paying/high-responsibility job long-term, so we’re trying to be a bit more aggressive in our savings now. He plans to make partner in his law firm, and those pensions are awesome, so we might not even need our current savings.

      • Retirement :

        What is a TSP? ________ savings plan?

        • emcsquared :

          Thrift Savings Plan (I think) – it’s the federal government’s version of a 401(k). I worked for the feds for a year and haven’t figured out how to roll it into my Roth yet.

        • Anastasia :

          Thrift Savings Plan. It’s a government retirement account.

          DH and I are 28 and 29, rent, no student loans, no kids (yet), both making low 6-figure salaries. I have about $100k in my retirement accounts. I opened my Roth when I got my first high school job at McDonalds, and have about $45k in Roth and another $60k in rollover IRA and 401k. DH got a later start than I did, and has about $40k between Roth and TSP. We also have a 6-month+ emergency fund, and we both have individual investment accounts

          This year I finally started socking away the full $17,500 of tax-deferred retirement funds, and I’m encouraging DH to do the same. Currently, he is only deferring enough to get his full TSP matching funds. I think you could make an argument both ways for enjoying your child-free years flush with cash or saving more aggressively. There’s a minimum amount of saving I’ve always done just because I’m paranoid like that, but the last couple of years we traveled quite a bit and rented a nice apt in the middle of downtown so we could live it up while we’re young. I don’t regret it at all, but about 6 months ago I had the same kind of “omg I’m almost halfway to 60″ moment regarding retirement… hence the ramped up savings. :)

          • Holy !(#$%* I am behind. This is awesome.

          • emcsquared :

            Haha, I was impressed with myself too until I realized that our student loans are only slightly lower than our 401(k) balance…

    • Anon for This :

      I am 39 and hubby is 36. I just got a law degree 3 years ago, and he is an unemployed teacher.

      He has a small teacher pension account, with maybe $8K in it. I have a 401(k) with only $7,000 in it. My job doesn’t contribute anything to retirement and I make less than $50K a year. We are broke, and I am terrified about what is going to happen in 25 years when I will want to retire.

    • Re: kids and college savings – I have friends who started 529 college savings accounts for “child A” and “child b” prior to have conceived any children. If you want to start saving for that now, you can.

    • Diana Barry :

      We are early-mid-30s and have about $550K in our retirement accounts. (Emergency fund has 30K, various business/personal checking accounts have about 25K.)

      We have a giant mortgage but no other loans and 3 kids, and are saving only a little for college, far more for retirement.

    • I go back and forth on if I’m ahead of the curve or behind–I feel behind when I read this site, but know I’m better than a lot of my friends!

      I also feel very apropros because just this week I got checks from my two old 401ks (former employer changed plans, so had two) and today bundled them up with the paperwork to transfer it into my new one (new employer I’ve been at for six months), so it’s all in one place! Sadly I liked the website interface of one of the old ones better, but it’s just easier to have it all under the current employer’s plan.

      I’m 35, single, and basically starting to suspect I will never have kids (see: age), even if someday I manage to find a partner. Total I have about $70K in the retirement accounts (I was bad and didn’t do them for the first four years or so I was working–oh, if only!) and contribute 10% these days (employer only adds 2% to that–and it takes 4 years to vest, yeesh). Plus some cash savings in ING and my regular bank. My industry can be a big volatile (I’ve been laid off three times) so I get a bit freaked if I don’t have a big fallback, even though it’s not been a problem finding a job ever. I do think I need to refinance my mortgage, even though I haven’t had it long.

      Anyone have mortgage refinancing suggestions? I currently have a 5% fixed, and know I could get something better, but have no idea where to start!

      • get referrals for a mortgage broker in your area and get a basic sense of what you would qualify for. My broker will run the numbers based on a set of assumptions before he pulls a credit report and gets actual statements. That allowed me to check against some online calculators and ask my current mortgage if they could do anything better. I ended up using something the broker found, but only because he had cheaper closing costs.

    • anon for this :

      I am 35, single, no kids, and have $120K of my own savings in my retirement account, plus a pension from my employer (dual-contribution). I should have made better efforts to save when I was younger, and also made some unwise decisions wrt the pension at that time…but I was young and inexperienced, so whatever, what’s done is done. No debts, but no house.

    • I think you are kicking butt! I’m single, 27, making $90k in NYC and have about $40k in my retirement accounts (all Roth). The calculators say that I’m on track, with saving 12% into post-tax accounts.

      I say enjoy half of the extra cash, maybe for travelling pre-kids, and then sock away the rest. If you are planning on having children, you can start investing in a 529 account to save for college even when they are just a “sparkle in your eye”

    • Anon For This :

      I’m 24, single, and I have $21k saved for retirement, split between my 401(k), an IRA, and a pension from my previous employer. The best thing I ever did was intern in a financial services office specializing in retirement when I was 20. Learning about how many people are so woefully under prepared for retirement scared me into starting to save for retirement as early as possible (even when I was fresh out of undergrad and just scraping by).

      In addition to my retirement savings, I save 15% of my take home pay in an emergency fund and a fund earmarked for replacing my current car in a couple years. I am fortunate enough to have no debt, so sometimes I feel guilty and think that I should save more aggressively than I do, but I do have a bit of a weakness for shopping.

      I am approaching the $20k mark in my emergency fund, which is 5-6 months living expenses for me. I should probably start funneling funds elsewhere, as that account earns a painfully low interest rate. The only problem is that I’m not entirely sure where to put that money next! Any ideas?

      • financialfashionista :

        +1

        I am 24, and right out of college I started working as the assistant to a financial advisor. Best life skills job ever…

        “Learning about how many people are so woefully under prepared for retirement scared me into starting to save for retirement as early as possible.”
        So spot on!

      • emcsquared :

        Not sure if you are currently contributing to both an IRA and 401(k), but if not – our financial advisor told us that we could put $5K per year into an IRA on top of our 401(k) contributions, and then roll it into a Roth IRA so the growth is tax-free.

        Assuming you are already doing that – we opened a Fidelity credit card that gives us 2% cash back (1.5% until we hit a certain dollar threshold, and then 2%) and deposits it directly into an investment account. I think the minimum to open the investment account was $2,500. We use it for long-term investing only (no day trading for me), and it’s kind of fun to review the funds and ETFs and pick which ones to invest in. We’ve made about a 7% return over the last 12 months, which I consider pretty good since I’d never picked stocks before. You can do an internet search for stock allocation suggestions – there are lot of schools of thought, we just picked one that seemed reasonable and went with it.

    • lucy stone :

      I’m 29, husband is 35, both attorneys. I’m government and he’s self-employed and we earn about $110,000 combined. I have a 12% pension at work where I pay half and my employer pays half. I also contribute another 10% of my pay to our state deferred compensation account. Between that and my husband’s retirement account, I think we currently have $50,000 saved not counting my pension. I’d like to save more aggressively but until we get the student loan beast off our backs, there isn’t much room. We own our house and have about $20,000 in savings.

  7. Divaliscious11 :

    Mint.
    It gives me visibilty into almost everything in one sign on…..

    • Cornellian :

      i logged in to mint yesterday for the first time in *cough* a year, and it told me I spent 15K on clothing!

      It turns out everything that went on my BR visa they thought was BR clothing. Phew!

  8. Sydney Bristow :

    I feel like I’ve just gotten a handle on my financial situation over the past year or so, so I apologize if you’ve seen me post all this before. It’s exciting to feel like I’m finally getting it though.

    I have one checking account and 4 online savings accounts (3 at ING, so they don’t really seem like separate accounts, and 1 at Tiaa-Creff). I also have 3 credit cards, 2 at the bank where my checking is and 1 at a different bank. On top of that, I don’t currently have a retirement account and I have 6 student loan lenders.

    I use the software You Need A Budget. I swear it has turned everything around for me. I think a lot of it is because it isn’t linked with my accounts so I have to take the time manually to input each transaction. I have a shortcut for things that are inexpensive that I just pay cash for and I consider it my grocery money since its usually food while I’m working. So whenever I get cash from the ATM, it’s categorized as groceries and I don’t track each of those purchases individually.

    All of my accounts are loaded in the software. My student loan accounts are set up so they don’t affect my budget at all, but I can show my payments and see the balance change because the transaction shows up as a transfer from checking to the loan account. All the other accounts do affect the budget. The interest is a little more difficult to track, so I just add a transaction called “interest” every month when I pay that bill so my total amount isn’t always exact to the last penny every day but it is once a month.

    I have 3 ING accounts, but I really only need and use 2 of them. I keep $1000 in one of them as my backup money for any given month that I go over budget. I put the amount I have budgeted for a month in checking at the end of the previous month. If I’m getting close to spending over that amount, I’ll pull from the $1000 ING account. I deposit my paychecks every week into the other ING account and that is what I pull the monthly budget amount from each month. After I do that, I transfer whatever is leftover in that account to my Tiaa-Creff account which earns more interest and is my emergency fund (currently 5 months of savings!). The third ING account is really for things I want to save up for, like an overseas trip, but I have been trying to build up my emergency fund and pay extra on my loans right now so I’m not saving for anything fun like that right now.

    Since all of the accounts are in one place, they are really easy to keep track of. I can add a transaction that I make n my credit card so that it affects the budgeted category and then when I make my credit card payment from my checking account it will show up as a transfer to that credit card and I only have to enter it once but can see it in both accounts.

    There ar all sorts of reports and stuff you can run to show you what categories your money is going to. I don’t really use those because I’m comfortable with how I’m spending my new right now. For what it’s worth, the way that I set up my budget in the first place was to guess what each category was and then track my transactions for about 2 months. I realized I spend $100-200 more on groceries and eating out than I thought but less in other areas like miscellaneous stuff from Target. I just set my budget going forward to be approximately the amount that I was spending in each of those categories and then I adjust the amounts if necessary. I’ve added a clothing budget recently and cut some extras like the DVDs on my Netflix account, my gym membership, and groceries. It’s been easy to adjust as things come up. I really really love the software and highly recommend it.

    • We cut cable back in 2007 when I went to grad school and haven’t had a need to turn it back on! Five years of $60/month = $3600!

      • Sydney Bristow :

        Isn’t that crazy? 2007 is when I quit paying for cable too, although it was included in my ridiculously cheap rent for about 3 years. I very rarely miss it and Netflix/Hulu pretty much covers what I want to watch when I have time to sit and watch it.

    • mvelopes.com does envelope budgeting like YNAB too, but online like Mint. I used it a few years ago when it had a fee, but I stopped and I haven’t tried it again since they made it free, although I keep trying to convince myself to do it.

    • My BF loves You Need A Budget, too. Good program.

  9. Anastasia :

    Good advice, Kat! I really like the Tales from the Wallet posts.

    I’ve consolidated my rollover IRA, my Roth IRA, and my investment account into TD Ameritrade. Even though each of these is technically a separate account and I can’t move money among them, the site lets you “link” separate accounts so you can toggle between them in a drop down menu with one login. Very convenient!

    Also, I have the exact same asset allocation in my Roth and my rollover IRAs – yes, I know the tax advantages are different and I could maximize them with different investments, but I don’t do short term trading, and at this point it’s more important to me to have fewer ticker symbols to pay attention to (I use that loosely). Plus, I only have to look at one of the accounts to know whether my entire non-401k retirement portfolio is up or down, and it makes rebalancing easier.

    Similarly, DH and I have combined savings and checking accounts, and they’re all with the same bank so we can see those with one login, as well. We buy almost everything on a joint credit card through the same bank that we pay in full every month, so it’s really easy to quickly scan through spending every month before we pay the bill.

    I copy overall account numbers + each of our current 401ks into Excel every couple of months to make sure we’re generally on track, but I only do serious budget analysis a few times a year… and then, since almost everything is on the same credit card, I only have to extract one set of statements to get all my data.

  10. Threadjack on maintaining emergency funds – my DH and I want to have a certain number of months of expenses in an emergency fund. We’re not fully there yet, but we will eventually reach a point where it’s ridiculous to keep all that money in an ING account. Where does everyone keep their “excess” emergency fund money?

    • Sydney Bristow :

      Mine is in a Tiaa-Creff account earning something like 1.025% interest. I’m a document review attorney though, so my job can literally be done any day and there could be a stretch of time where I’d actually need access to the money so I haven’t wanted to move it anywhere else. My goal is 12 months of savings though, so maybe I’ll keep 6 in the online savings and anything above that somewhere else.

      • I’m just about to do this – 6 months completely liquid, and earning pitiful interest, but I’m going to start channeling my automatic savings into a higher-risk mutual fund with Vanguard to keep up with inflation, at least.

    • emcsquared :

      DH and I keep our “emergency fund” at our bank in a savings account bearing a (pitiful) interest rate. I have a personal emergency fund with Ally so it’s hard to access, but still accessible if something awful happened. My philosophy is that an emergency fund doesn’t really need to grow; it just needs to be accessible in an emergency.

      I’ve also heard of people building “CD ladders” – buying a set dollar amount of 1-year CDs each month, so that they mature monthly and you would get spread-out cash over an entire year if you lost your job. While it’s a nice idea, I expect that I would use my emergency funds for a big, unexpected expense (like medical expenses as DH and I debate politics this fall – grr) and the CD ladder doesn’t give the flexibility for something like that.

    • Anastasia :

      I do a CD ladder set up so one matures every 6 months or so… that way if the emergency fund gets severely depleted, you can back-fill it.

      Rates are pretty low right now, but once you have it going, you can buy the long term CDs (multi-year) which are slightly better.

    • I have my emergency savings in my ING account. It’s the one earning the most interest right now.

      The ladder CDs at ING (I think the shortest one is 3 months) aren’t earning more interest than the savings, so I say just stick with the ING savings account.

    • We reached a point where we started adding the extra emergency funds to our overall investments. Before that it was in muni bonds.

  11. We keep ours in a money market fund . It’s a little riskier than some financial planners recommend, but it isn’t something we’re uncomfortable with (young, no kids, lots of easily liquidate-bale assets in case of a true emergency)

    If rates were better, you could put it into a CD.

  12. So, really dumb question. What is an “investment account”? Is this stocks? How easy is it to take out/put in money? My grandparents said they were going to start an investment account for us as a wedding present, but I truly have no idea what it all means in practice.

    • They mean a “brokerage account”. Used for investing in stocks, bonds, or other financial instruments.

    • It means it’s an account with a financial planner or stock broker. It’s managed by that person. Your money in that account could be in a combination of “funds” – could be stocks, mutual funds, bonds, whatever. You and the financial planner/stock broker/portfolio manager/whatever they call themselves decide together what places your money should be invested.

    • emcsquared :

      It can mean a lot of things – something as simple as a Fidelity or eTrade online stock trading account, or something as personal as a relationship with an investment manager who either helps you pick stocks or picks stocks for you. I think an IRA or Roth IRA could also be “investment accounts.”

      I’ve got an investment account at Fidelity and an IRA at Schwab; once we set up the online interfaces, it is really easy to transfer money from our bank account to the investment accounts. No idea how easy it is to transfer money out, though I expect it wouldn’t be hard (as long as they aren’t tax-favored accounts like IRAs). Transferring money is a lot like using an online bank account.

      You might want to talk with your grandparents about what kind of investment account they are setting up and when you’ll vest in it. For instance, are they using it as an estate planning tool and you might not have access until they die? Or is it in a trust and they are trustees? Will you be taxed on dividends, etc without having access to the funds in the account? And make sure you know if it will be set up overseas – there are crazy tax reporting rules for U.S. taxpayers with overseas assets.

  13. This is rather morbid, so I apologize, but since I’ve started working in the estate planning field, I’ve learned: (1) Know where your finances are, and (2) make it fairly easy for someone else to figure out. When someone dies, the last thing the family wants to do is try to sort through decades-old statements in a file cabinet and try to figure out what needs to be probated. It’s time-consuming, frustrating, and expensive to try to hunt down the value of tattered stock certificates for companies that have merged or been bought or sold 8 times, much less figure out how to transfer ownership. If you have certificates, please please please put them in a brokerage account, or at least convert them to book entry. If you have multiple bank accounts, have them at the same bank. Even better if they all show up on the same bank statement. If you have life insurance policies, keep them together, and up to date so you can tell what’s still good.

    Kat, is a “from the wallet” about estate planning too morbid? It’s something we all know we _should_ do, but few of us think about (myself included), especially while we’re relatively young. Guest post?

    • I actually think that would be a wonderful idea!

    • A friend of my sister’s dropped dead suddenly at age 42. She was a SAHM and did all the banking and bill paying, and thus had all the login and password information. It was a bit of a scramble for her husband to find the information he needed, and at a very terrible time.

      It is morbid, but definitely something to think about. I have the very half-a@@ method of keeping most of my logins and passwords on a piece of paper (not secure, I know!!), but I really think I need to do something more organized.

      • Yeah, I hate to think about it, but death or incapacity isn’t something that only happens to those over 85, the way we’d like to pretend. A lot of people find some peace of mind just knowing all that’s in order, whether they’re 30 or 90.

      • That would be awful. My husband and I joke about how much of a mess it would be, as now most of our banking is paperless, so we don’t even get bank statements in the mail. I’ve started making a point of keeping all my passwords in LastPass (its an app you can add onto Firefox/Chrome/IE) and making sure my husband knows the password so that worst case he could work his way through that. And it also helps with the P-I-T-A mortgage account that makes me change the password every 3 months – yeah, that’s secure, since I have no idea what the password since you make me change it so often! Sorry,

    • Another vote for an Estate Planning post!

    • are you offering to guest post, Midori? That would be great. I do everything for our family too but got my ducks kind of in a row the weeks before I gave birth, just in case something went horribly awry during delivery. THAT was fun.

      • I’d consider it, Kat. I can’t claim to be an expert by any stretch, but I could probably hammer out a bullet list of basics and run it by my very knowledgeable partner for comment. She’s really big on public education in these matters and would probably be happy to help. If you don’t have any other contacts who would be well-suited, shoot me an email.

        I used to think of things like powers of attorney, wills, and living wills as old people or sick people stuff. But I’m seeing a lot of new parents and young business owners wanting to set things up, too, and it’s making me realize how important it can be.

    • Former Partner, Now In-House :

      Would one option be to write down your passwords/account numbers/logins on a piece of paper, put it in an envelope, seal the envelope, sign your name over the back flap, and put it in your safe deposit box?

      My fiance and I have not combined finances (met late in life, former spouses abound etc). We have a cohabitation agreement, the original of which is in the safe deposit box, as are our respective wills and trusts. We are each other’s executor/rix and we both have access to the safe deposit box.

      Anyone see anything bad about this plan?

      Third the request for an estate planning post that covers:

      * what if you are single, married, married and kids, married not for the first time (with or without kids)
      * leaving money to charity in your will
      * logistics (see above re passwords)

      • My grandparents had their wills in their safe deposit box. When my grandfather died, it was fine. But my grandmother passed away within the year. She hadn’t added anyone else to the safe deposit box during that year. So when she went, we couldn’t get into the safe deposit box for probably a month. (The bank required a death certificate, which didn’t come for quite some time.)

        I think a lot of estate planning attorneys advise having a copy of the will in a sealed envelope in a file cabinet at your home. That would be the first place I would look if my parents or loved ones passed away.

      • I’ve looked into the issue of access before, albeit for non-US jurisdictions (at least I think access is what you’re getting at with the log-ins etc ?)

        Most financial institutions are required to seal customer accounts pending probate upon receiving formal notice of their decease. The process of obtaining probate can take months, even for simple wills in jurisdictions without estate duties, during which accounts cannot be accessed by survivors.

        This may not seem immediately material for you if you have your own finances and are not dependent on access to your partner’s accounts for daily expenditure. But also consider situations where market conditions are undergoing rapid change – I know many people who felt the need to exit risky investments and/ or shut down all but the safest bank accounts in the immediate aftermath of Lehman’s collapse in 2008. I am also aware of some Madoff claims in limbo because the original investor has since passed away and the authority of the estate to pursue claims are unclear.

        Holding joint accounts is a possible work-around although you’ll need to do some homework to verify if it works for you, and of course it may require a mental adjustment for you and partner. For at least some jurisdictions, joint accounts are unaffected by the decease or incapacity of one account-holder. The remaining balance is a deemed gift to the surviving account-holders and banks may use this as a basis to allow continued access (I’ve been told this approach may be subject to challenge though).

        Fourth the request on an estate-planning post. It’s an area I’ve had to learn up a lot in the last 5 years for personal reasons, and have been taken aback at how much planning and professional consultation has been required, even for my relatively simple intentions.

  14. This is a great topic. I love personal finance, although I wish I had more finances to plan with. :) I have two checking accounts (one at Chase that still gets my direct deposit and is easy to withdraw from and one at Ally that I am slowly transitioning to), one emergency savings account with six months of expenses, a Fidelity Roth 401k with work and Fidelity Roth IRA. In the next two months I plan on opening a Fidelity brokerage account for any money greater than 6 months worth of expenses now that I’ve hit that savings goal. The investments are all with the same company, because it is easiest for me to sign on to one website.

    I would also highly recommend Mint. I enjoy watching my net worth increase and tracking how much I spend in each area a month. Budgeting seems like too much of a hassle to me, but if one month looks high for clothing or eating out, I try to cut back the next month.

  15. financialfashionista :

    I love money posts!!! :)

    I’m another Mint fan – it’s very easy, and visually eppealing which is a nice touch. I like being able to see all my spending from all cc/checking accounts consolidated into one spot so I really know how much I’m truly spending, and I just love being able to categorize and have budgets. I’m a tad bit type A…..

    As far as accounts, I have 1 individual checking/savings, 1 joint checking/savings with the husband, and a 401k. He has 2 checking, 1 savings, 1 Roth IRA, and another investment account the husband that’s reserved for a down payment on a house….someday.

    I’m a big advocate of having someone help you with finances, and not just because I work at a financial firm. This is how I think of it…..many women on this site spent a lot of time and money obtaining a law degree, and so you know your stuff! The same can be said about an experienced financial advisor – a good one has a great deal of knowledge, experience, and willingess to help clients with holistic financial planning. So, talk to your friends/family/retired parents/co-workers. Find someone to help you so you don’t feel so overwhelmed!!

    Personally, I sock away 10% of my income in a Roth 401k – It automatically comes out of my check so I never see it. I also have automatic bill pay on most of my bills, and automatic bi-weekly transfers to my checking account. I currently pay $10 extra on my student loans every month – doesn’t seem like a lot, but I know how compounding works over time and a little bit goes a long way. When the hubs graduates (this spring!!!) We will be focusing on paying down my student loans, then his and are hoping to pay it all off in 7 years (about $100k).

    I think the biggest thing with personal finances is to start small. When I graduated, I signed up for 401k contributions when I filled out my hiring paperwork. After a few months, I focused on consolidating my loans, and decided I could sacrifice a few lattes a month to come up with $10. About a year out of school I started regular savings contributions.
    Baby steps!!!!

  16. Anon for This :

    I feel like I’m totally f’ed. I’m 32 and DH is 38. I make a healthy salary but he is a teacher and makes a lot less. My main debt is my student loan which is approximately $58k (low 2.5% interest though) and about $6k in credit card debt that should be paid off by the end of the year (a year and a half ago I had about $20k so I’ve been steadily paying it off). He has about $35k in high-interest personal debt that he only told me about 5 nights before our wedding (lol, he was terrified to tell me and I can shake my head about it now but then I wanted to absolutely strangle him). I have about $8k in savings, $8k in brokerage, and $15k in my Roth IRA. I don’t invest through my firm’s 401k because they do not contribute/match/anything. DH has zero savings and does not really contribute to his retirement so he has something ridiculous like $3k saved. He always lives paycheck to paycheck basically. We never consolidated our financial accounts and pay bills separately. Whenever we talk about money he gets really really upset and totally shuts down (and always later admits it is because he is embarassed, etc.) or agrees with everything I say and then never follows through on the “plan” I suggest (e.g., brown bagging it some days, cutting up cc’s after they are paid off to reduce temptation, increase retirement contribution). I’m not a saint when it comes to money because I certainly was spend happy when I first started working but I’ve changed alot in the past few years (a national economic crisis will certainly do that to you) and am trying to save more and more. Does anyone have any advice for how to deal with a husband who is HORRIBLE with money???

    • Can you find a financial counselor to help you come up with a joint plan? Then it isn’t YOU telling him what to do, its the counselor laying out a payment plan.
      Also, as a teacher your husband probably has money taken out of his paycheck automatically (no choice) to put into a public employees retirement fund, thats how it works in Ohio. Most teachers actually have a really good retirement package when compared to other people making a similar salary.
      If you ever want to buy a house or other plans together, you need to start looking at your debts TOGETHER and deal with them as one, not as my debt vs his debt. I would recommend Dave Ramsey’s Debt Snowball plan as a way to prioritize paying off debts (google it).
      Last, cut up any high interest credit cards NOW. You don’t need to pay them off to cut them up so you can’t use them anymore. Start “his” “hers” and “ours” accounts, using the “ours” accounts for daily bills and savings and the “his” and “hers” accounts for your own personal fun money.
      I would also second PollyDs recommendations “The Money Book for the Young, Fabulous and Broke” by Suze Orman and “Nice Girls Don’t Get Rich” by Lois Frankel (a follow-up to NGDGTCO). Good luck!

  17. kenshaw jeanne :

    If u need a reliable and genuine loan help,and don’t want to be a victim of scam,I think this is for you.All posts of loan lenders giving loans on-line especially on these sites are SCAMS..The referrals here as well are bunch of scammers.Don’t contact them for your own good.This is a story of how I was ripped off my hard earned cash by some idiots on-line that calls themselves lenders and how I finally got my financial freedom from a God sent loan officer within 36 hours at just 5% as interest.For more info and interest,email me via “[email protected]

Add a comment.

Questions? Check out our commenting policy. Tech problems? Please report it to the tech team.