Getting Back To Basics

Well I think it is time to get back to the basics. We have been spending more than we should be and have been coming in short by the end of the month. We have been spending a lot of money on eating out and buying a lot of little things, that we don't really need. It's time for us to start cutting some of these things out. It's funny how fast small purchases add up. I also need to start working on our emergency fund again. I have been slacking on saving money in our emergency fund and had to bust out a credit card to pay for a unforeseen plumbing problem. So we are now back in credit card debt. Not that the amount is major, but now we have a debt that we didn't have before to pay off. Anyway I will be working on a new budget and hopefully we will be able to stick to it.

Emergency Fund Works

Turns out we had to have all kinds of work done on both our cars this month. It was unexpected and we were short on cash also. So our emergency fund came to the rescue. It sure beat busting out the credit cards again. So anyway we got most of the work done and only have a couple of minor things to take care of. Start an emergency fund it works.

Rules to Get Rich By

This month's issue of Money Magazine has 25 Rules to Grow Rich By. I am not going to list them all, but am going to list a couple that caught my eye. One of the rule's is to save 10% of your salary. I am actually hitting that mark this year and plan to continue each following year. It also says to keep three months worth of living expenses in a savings account (Emergency Fund). I am currently working on this one but am no where close to where I need to be yet. You need life insurance to cover at least 5 to 10 years of your salary in case you pass away. Some other interesting points are don't spend more than 2.5 times your salary on a home purchase. We are OK on this point, in fact we are under. If you don't understand how an investment works don't buy it. This is me with Forex investing. I want to get into it, but just don't know anything about it. Resist the urge to buy new electronic gadgets. This is the hard one for me I always want to keep up with the Jones' on this one, but I will have to give it up. There are a lot of other great points. Check out November's Money Magazine. Also Free Money Finance has written some interesting things about the same article, I will post the link here.

Well That's One Goal

Well I got my HSBCdirect savings account set up. Now I just need to wait three days to start funding it. I also need to set up a goal for the amount of money that we are going to need in our emergency fund, plus some extra for investing. I have been reading alot on real estate investments and think I might be interested in rental properties, but I want to get out of credit card debt first. Anyway I figure I can save a little extra for either and emergency or investing and grow some interest on it also.

My Online Savings Choice

Well it looks like we will be going with HSBC direct as our emergency savings fund. The clincher was last night on the way to a birthday party when I saw that we had a local branch, so between that and the ATM card I think I have finally made up my mind. I know you are thinking it is about time, but being new to all this I had to check out all of my options. Anyway I will be taking the plunge today and setting up our online savings account so that I can incorporate our pay ourselves first mentality in to our emergency fund.

Looks Like A Winner

I would like to thank whoever posted the information on HSBC direct having ATM cards for their online savings account. In case of an emergency I would like to be able to get to my money without too much hassle. I know what you are thinking, having easy access will tempt me to spend it, but I am not too worried about that, I am pretty disciplined. At least I think I am. I've heard a lot of good things about both Emigrant Direct and HSBC Direct, but I am leaning towards HSBC right now because of the ATM card. So in the next day or two I will have made my decision and opened and account. Any other comments on either of these two banks would be appreciated.

Online Savings Account

Seeing that I need to get moving on setting up an Emergency Savings Account, I've started researching some of the online savings banks. It seems like there are a lot to choose from and they all offer pretty much the same options. The only difference is the interest rates they are currently paying. Here are some of the interest rates they are currently offering.

Ing Direct 4.40%
Emigrant Direct 5.15%
HSBC Direct 5.05%
Citibank 5.00%
CapitalOne 4.80
Wamu 5.00%

You can pretty much open any of these accounts by funding them with at least $1. There are no membership fees, no minimum balances, and you can transfer back and forth between your checking account. I think a couple of these even pay you for referrals. I am leaning towards Emigrant Direct, but haven't made up my mind yet. Anyone have any suggestions on which has the best customer service, online experience, etc...? I would appreciate any suggestions.

Saving Money For A Rainy Day

I guess one of the goals I have neglected to set for my family is an emergency savings accout. I have recently read an article on Making Your Emergency Savings Automatic by David Bach the author of The Automatic Millionaire. For those of you who aren't sure of what this is, it is an account that you save money in for unforeseeable expenses- car repairs, home repairs, Dr's bills, etc.... The types of expenses that you would usually have to max out your credit cards for.
The article pretty much shows how to set up a cushion of money for these types of emergencies.
There are four basic steps to do this.

1) Make your rainy day fund Automatic. Bach says that if you don't make this process automatic chances are that you won't save. So each payday transfer a certain amount into a money market, savings account, etc....

2) Get your money out of your checking account. Put your money where you don't have easy access to it. Such as high interest savings account, money market, etc....

3) Put it in the right place. Make sure you are earning interest on your money. Don't let the banks make all the money.

4) Decide how big of a cushion you need. I have read all kinds of different amounts. I think the amount to shoot for is one that you are comfortable with and one that keeps you from having to use your credit cards.

I guess there is no time like the present to get started, so I guess my next step will be checking out some of the high interest online savings banks. If anyone has any suggestions I would appreciate any comments.