If anything does change, there will be an update to this post to let you know.

A friend of mine recently recommended ING Direct (soon to be renamed Capital One 360) in a post on her Facebook page. When the question was asked…

“Tell me more about ING. Do you use them? What are the advantages? I was thinking about switching from our BofA…”

Fingers were pointed at me for an answer. This happens to me a lot.

After I gave my detailed response, another friend popped in to say “Uh oh… You’ve unleashed the financial beast!” Rawr! Financial Beast Stephonee is here to smash fees and helpfully describe her favorite bank accounts! RAWR!

For your benefit, Financial Beast Stephonee presents a cleaned-up and better-formatted repost of my answer on Facebook:

Me: “Are we talking about their checking or their savings accounts here, specifically?”

Reply: “Either or”

Well then!

ING is different from most banks…

ING Direct in General

The lack of a physical brick-and-mortar presence might be bothersome to some people, but I’ve never felt like I needed it. Also, that’s the downside to any high-yield online-only account, so it’s not really a surprise – it’s just the way these types of accounts work.

They do make up for their lack of physical presence by having the best customer service anywhere. Not just of any bank, but anywhere. Keep in mind that I say that having worked in customer service, and while having accounts at many, many different banks over the course of this blog.

ING Direct’s Electric Orange Checking

Interest and Fees

They offer interest on the checking account, no minimum. Very, very rare for a checking account. Also the way they handle overdrafts is different – they give you an overdraft line of credit, at a super low interest rate. Which means if you overdraft and then put money into the account soon after, you pay only pennies in overdraft fees.

Moving Money In and Out of the Account

The Electric Orange Checking account has every standard feature I’ve seen in checking accounts nowadays: online bill pay, check deposit via phone app, free debit card, etc. etc..

They also offer Person2Person payments with a checking account, which means you can transfer money to anyone else, via ACH electronic transfer. If it’s to another ING account, the transfer is instant – if it’s to another bank, it takes a couple days. I use the Person2Person payment whenever I can, instead of a check.

One of the really great features they have is online checks: you put all the check details in online, and they create, print, electronically sign and mail the check to your intended recipient (all for free; they don’t even charge you for the postage).

Free ATMs at any AllPoint ATM (which includes most 7Eleven ATMs and a ton of other places). You can buy a checkbook from them if you need one, and a book of checks only costs $5. Buying a checkbook is the only fee I have ever had to pay ING, ever.

Downside?

Check deposit used to be the only downside I could think of, since they don’t have physical banks or their own ATMs for you use. You used to have to rely on direct deposit or transfer from another bank account to get money into the account (or, they do offer the option to physically mail your checks into them, but I never used it).

But I don’t even think that applies as a downside anymore, now that they offer check deposit via the mobile app, and I can just snap 2 pictures of any physical check to get it into my ING checking account.

ING Direct’s Orange Savings Account

You get a higher interest rate than brick-and-mortar banks, but lower than most other online-only high-yield savings account. Many people have skipped over these accounts because of higher rates elsewhere. But you see, there are some things I really like about Orange Savings…

Multiple Accounts for Multiple Goals

They let you open as many savings accounts with them as you wish, and once you have one savings account with them, opening another one take about 10 seconds. I use this feature to partition savings goals into separate accounts, like an “Emergency Fund” account, a “Travel” account, etc. etc.

Transferring money between the accounts (and into and out of an ING checking account) is instant. The only restriction (and this is a federal law designed to prevent money laundering) is that you can only make 6 transfers out of any one savings account per month. Transfers into the savings account are unlimited.

There are no minimums or fees associated with the savings accounts.

Downside?

Pretty much the same as the checking: getting money into the account from outside of ING. The “Check Mate” deposit-by-smartphone app also works with their savings accounts, so it’s actually easier than it used to be.

Bonuses!

This was all brought up in the context of the bonuses ING Direct is currently offering when you open a new account – bonuses that you, too, can take advantage of.

What do you think? Have you used ING Direct at all – and are you as stupid in-love with it as I am, or do you have a different opinion? Is there another bank out there that has won your heart? Tell us in the comments!

Related posts:

1. College Money Tip #3: Bank Better
2. Back to Basics #3: Checking Accounts
3. Back to Basics #2: Savings Accounts

You list out all of your debts (or goals, in my case) in a priority order, each with a minimum payment that you have to contribute each month. Then, you take any extra money you have each month, and throw it at the goal on the top of the list, until that goal is entirely eliminated.

Once the top goal is gone, you contribute everything you can into the next goal on the list, and so on and so forth, your monthly payments “snowballing” and growing as you move down the list.

Here’s my Savings Snowball, with my progress back in January and now at the middle of October compared side by side:

*Car fund: That’s $175 and a new car, mind you!

Alright, not bad. Definitely some real growth happening – especially that retirement contribution!

The Future of the Future Car Fund

This was a point of debate (with myself) just after I bought my Camry in July. Should I keep contributing to this account? Or should I be putting that money toward the auto loan that I just took out in order to get the Camry?

The math lends itself in favor of paying off the loan: I have a higher interest rate on the loan than the interest rate I earn on the savings account. But the straight interest-rate-for-interest-rate math doesn’t tell the whole story.

The rate on the car loan is only 1.99% – less than what inflation is usually calculated at. And my student loans have comparably much higher interest rates – above 5%. If I have extra cash, it should be going toward paying those down. And of course, if we’re taking all interest rates into account, then we have to take the expected interest rate on my retirement contributions, which is even higher still than 5% student loan interest.

So really, I shouldn’t be saving for a new car, paying off my auto loan, or paying off my student loans at all – extra cash should all go into a retirement account and that’s that. Right?

But if I did that, there’d be no snowball. And there’d be no new cars, no traveling, no charity contributions, no weddings… because a goal that’s more than 40 years off still would be taking precedence based on its interest rate alone, which is just silly.

So I continue to contribute to the new car fund – not because the math supports it (it obviously doesn’t) but because of the simple fact that in 10 years or less, I will be car shopping once again.

Changes to the Snowball

I can’t do an update without doing some tweaking. It’s just my nature. So here goes!

Emergency Fund Goal +$1,817

Even though I’m within $10 of my previous Emergency Fund goal, I’m not stopping now! My rent was just raised, so the previous goal wouldn’t really cover 3 months of living expenses any more. It’s time to bump the goal up to a solid $5,000.

Travel Fund, Minus Space Camp

I’m not as excited about going to Adult Space Camp as I once was. I purposefully missed registering early because I wasn’t so sure anymore. They also seem to have removed the week-long adult program, and are only offering the long-weekend version. So this fund will now be for more non-specific travel, until another opportunity comes up.

Weddings Monthly Payment +$50

The number of weddings I’ve been attending (and traveling for!) has only been increasing. Everybody gettin’ married up in here! That’s why this fund’s “progress” has gone down – I’ve taken more out to attend weddings and buy gifts than I’ve managed to put in!

But I love attending the weddings of my family and friends, so the answer is simply to contribute more each month – that way, I can keep on going.

Retirement Monthly Payment: GONE!

I had to think this one through for a while, but I will hit my goal of $5,000 in contributions this year, without any further contributions. Wait, WHAT? How does that work?

First, I had to define what “contribution” means. I decided a few years ago to measure my progress on this goal by my own contributions to my retirement accounts, not the total account balance. I didn’t want to punish or reward myself for the swings of the stock market.

Secondly, do the contributions I make straight out of my paycheck (and the match from my employer) count as “monthly payment” for the purposes of this snowball? I decided that since they come straight out of my paycheck with no effort on my part, this answer is “no.”

With those definitions in mind, I will hit my $5,000 goal for 2012 in November with just my paycheck deductions. So I’m done for the year! The monthly payment on that goal is suspended until January!

Occasionals – Removed

My “Occasionals” account is where I keep money for regularly occurring (but not monthly) bills, like my annual renters insurance or my semi-annual car insurance. Though I still plan to fully contribute what I need for these bills to this account every month, it’s not really a “snowball” goal. I have no reason to increase it beyond the exact amount required to pay those bills.

Result

With those changes, and a little rearranging on the priority of some goals, the Savings Snowball now looks like this:

A leaner, cleaner snowball plan with refreshed goals! We’ll revisit again in January, when I restart my monthly retirement contributions and reevaluate everything else.

Related posts:

1. Savings Snowball Update: Back in Action
2. Savings Snowball: New Year 2010
3. Net Worth Update: January 2012

For those of you not familiar with the concept, here’s the short version: much like a debt snowball, each goal has a minimum payment that gets paid every month, no matter what. Any extra money I can scrounge up goes to the goal on the top. When the goal on the top is met, everything that was getting sent to that goal “snowballs” down into the second goal, and the minimum payment for that goal continues. Therefore, the snowball gains momentum as it goes down the list.

The last time I updated my savings snowball was actually January of 2010. That snowball is so old that it’s almost irrelevant at this point, but for nostalgia’s sake, here’s what it looked like at that time:

I did manage to save enough into my retirement fund to open a Roth IRA with Vanguard, and I also later adjusted my Emergency Fund down to a more reasonable $3,000 and maxed that one out, as well. So based on my old chart, that now leaves Future Car Fund as the top dog. Or, does it?

That retirement goal was a year ago, and you know what “they” say: Another year, another Roth IRA! (Or at least, they should.) Also, since I very recently got a new job, I now have access to a 401(K) for the first time in my life. So retirement is by no means struck off the savings snowball list. But should it be top dog again?

No. Retirement savings are a long, gradual process, and now that I’ve overcome the first hurdle (opening a Roth IRA and paying the $3,000 minimum fund buy-in required by Vanguard), it’s time to focus life on the nearer goals. Retirement savings will always be on the snowball, but low on the list. Constant. Like a river.

Emergency Fund is off the list, however. Sitting pretty at a little over $3,100 right now, it’s time to let it just earn interest and be there if I need it. Someday down the line, when my expenses increase, and/or I have dependents, I’ll worry about it again.

New Fund: Travel I’ve been “allocating” money to travel for a few years now, ever since I moved down to Virginia. But I’ve never done it properly, and it’s never been a part of the snowball. But the recent news that I’ll be attending a VIP viewing of the next NASA shuttle launch brings to the forefront the fact that I really should organize myself. So, a travel fund! Because I’m young and I do that sort of thing. Note: Spending from this fund will not include travel for attending weddings. That will come from the aptly named Weddings fund.

Not-really New Fund: Occasionals It’s not in the old savings snowball, but I have been contributing to this fund monthly for quite a while now. It’s a catch-all fund for things that happen regularly, but not often. Car insurance bills, my cell phone bill (I pay my share of a family plan, but not monthly), property tax on my car, things of that nature. Altogether, the little “occasionals” add up to $110/month right now. This goes toward the bottom of the snowball, since it never needs to be the one at the top where it gets the brunt of the savings. It’s a fixed amount monthly.

Newest and Improviest Savings Snowball

So this is the new plan. Everything that I’ve kept on the list, I’ve also raised the monthly payment on, in light of my raise. I agonized a bit about what to put as the new top priority, of course. It could change, but the thinking for now is that my car is a 1996 Oldsmobile. It’s just not going to hang on for that much longer, no matter how well I take care of it.

The interesting thing about this is that nearly none of my savings goals have set targets anymore. Nearly all of them are things I plan to be withdrawing from on a regular basis, as things come up, so they’re “rolling” targets. For example, “Weddings” can be expected to grow fat during the winter months, and then go low at the peak of wedding season, in late spring, and cycle back around each year for quite a while.

But that’s okay! New goals will come up. Life will change. The snowball will have to change with it. But for now, as things are, this is the plan. And I’m plowing forward with it (if that’s not a mixed snow metaphor, I don’t know what is!).

Related posts:

1. Savings Snowball in Action
2. May Savings Snowball Update
3. Savings Snowball: New Year 2010

Experts love to give you rules of thumb like “3-6 months living expenses,” which is certainly as good a metric as anything. But if your current living expenses are inordinately high or low, that’ll throw the whole thing off.

The truth is, your emergency fund should be big enough to exactly cover the cost of true emergencies in your life, but no bigger. Obviously not having enough money in your emergency fund is bad, but too much money isn’t good either. You might be tempted to use your E-fund for non-emergencies if there’s too much money in there. And extra money in your E-fund isn’t being put toward other goals in your life, which will slow those goals down.

The truth is that the only way to know exactly how much money you’ll need in your emergency fund is to be psychic. And I’m going to go ahead and assume that if you’re psychic, your emergency fund consists of “already knowing the winning lottery numbers.” So for us mere mortals, we must rely on the old metrics of “3-6 months expenses” or simply picking a nice round number out of thin air, like I did.

Some tips on keeping your emergency fund big enough, but not too big:

• Remember to adjust the amount for life changes. When you first move out on your own, you’ll need a bigger emergency fund than you did when you lived with your parents or at college. In general, the size of your emergency fund will have to grow as you go through life.
• Credit cards and other available credit can help in a pinch, but don’t rely completely on them. We all know that people who consider credit cards solely as their “emergency fund” are stupid. But if you have a credit card with a good limit and a low interest rate, it can be used once your cash reserves are tapped out, as long as you have a way to repay it later.
• Personal relationships should also be a part of your emergency fund. Don’t be a mooch and go running to friends and family for every little thing that comes up! But do work toward strong ties with people so that you have people to rely on in a true emergency. The flip side of this is that you have to be ready and willing to help out with their emergencies, as well.
• Avoid tapping your emergency fund as much as you can. If you can pay for minor emergencies or not-really-emergencies out of pocket, then you won’t need to keep as much in your actual emergency fund to cover the real-deals.
• Keep your deductibles for insurance in mind. If nothing else, your emergency fund should have as much in it as your highest deductible – be it auto, home, or health insurance. Best case scenario would be enough money to cover all of your highest deductibles.

Don’t sweat your emergency fund too much. Yes, you should have one and you should follow the tips above to choose the size of it. But slow and steady wins the race – putting aside any money every month into an emergency fund is better than not. In fact, half of Americans have no emergency fund at all, so if you put anything away at all, you’re already “above average.” Just don’t let that go to your head, hotshot!

Related posts:

1. 8 Techniques to Boost Your Emergency Fund
2. The Importance of an Emergency Fund in College
3. Switch from Debt Reduction to Emergency Fund

When we last left my savings snowball, it looks like-a-so:

For those of you not familiar with the concept, here’s the short version: much like a debt snowball, each goal has a minimum payment that gets paid every month, no matter what. Any extra money I can scrounge up goes to the goal on the top. When the goal on the top is met, everything that was getting sent to that goal “snowballs” down into the second goal, and the minimum payment for that goal continues. Therefore, the snowball gains momentum as it goes down the list.

Here’s what’s changed since the May 2009 update:

Bro’s Wedding Weddings: As I explained in my October 2009 net worth update, I’ve got more than just my brother’s wedding to save up for now. I’ve been asked to participate in another wedding as a groomswoman, and that wedding will also require a dress and travel and accommodations, just like my brother’s upcoming wedding. And, if the advice of everyone older than me is true, weddings are just going to keep popping up over the next 5-10 years of my life. There’s no set numerical goal for this, because it’s a rolling number.

Retirement: Oh, hello! I’ve been saying for years that I’m going to start a retirement account. One of the earliest entries in this blog, in January of 2007, laid out starting one as a goal for 2007. I was ambitious, and crazy. I met a lot of goals that year, including going back to college, but starting a retirement account was not one of them. Neither did it happen in 2008 or 2009.

But now I have a big girl job, so my retirement savings? That jumps to the top of the snowball. I hope to max out a Roth IRA for both 2009 and 2010 (I can still open a 2009 IRA up until April 15, 2010), so the goal is $10,000.

New and Improved Savings Snowball

Not really all that different, in the end. Retirement moved to the top, and Weddings to the bottom. It has to be at the bottom, because a rolling goal can never be achieved and snowball down into the next goal. I knocked the Emergency Fund goal down to $5,000. I’m single, no kids, so maybe even that is excessive – I’ll reevaluate it when it’s the top goal. I increased the monthly payment on everything.

Conclusions: That I haven’t talked about my Savings Snowball is a testament to the fact that it’s working. It’s requiring less and less tweaking as time goes on. I’m happy with that.

Related posts:

1. May Savings Snowball Update
2. Savings Snowball Update: Back in Action
3. Savings Update for the New Year

In this harsh economic environment, there is hardly a better time to have a reserve stash of cash. A well-established emergency fund can mean the ability to make it smoothly through a job loss, health issue, car problem or other unforeseen personal crisis, as opposed to having to take on substantial debt, encountering costly delays or worse. If you’ve decided it’s time to prepare for the worst, while at the same time building some peace of mind, here are a few tips to help you boost your emergency fund.

1. Sell Off Old Stuff

Reselling old stuff is a great way to supply your emergency fund. Whether it’s books, CDs, DVDs, clothes, antiques and old comic books, or whatever, there are plenty of sources of cash among your unused or unwanted items. Check your local neighborhoods for specialty shops that will buy lightly used cloths, books, and similar wares, or hit the internet for online companies that will purchase these types of items. They may even pay your shipping to send them in!

2. Auction Off On eBay

Selling your stuff on eBay can be a great side project to fund your emergency stash. The beauty is that you can sell just about anything on eBay: from all sorts of odds and ends to antiques and even gift cards and coupons it’s all fair game. If you aren’t a big eBay seller or don’t want to bother with the work to set up an account, consider taking stuff to an eBay store, and let them do the work for you. Beware though, they will take a commission on the stuff they sell for you and will typically only take items of higher value to make listing them worthwhile.

3. Reduce Expenses

The best way to save is not to spend. Try taking the money you might spend on more frivolous items like gourmet coffee, clothing, or dinners out, and set it aside for a month or two to begin your emergency fund.

4. Cut the Cost of Utilities

Another great way to save for a rainy day is through your utility expenditures. Make a conscious effort to reduce the amount of electricity or natural gas you use each month by turning off lights and using heaters and ceiling fans rather than the furnace or air conditioner. You might also consider reducing your cable package and put your monthly savings toward your emergency fund.

5. Pick Up Extra Hours

In the current economic environment, many employers don’t want to hire more people. Hiring new employees is costly since they require employers to pay more in benefits, it takes time and money to train them, and there is no guarantee that they’ll end up working out. Many employers would rather use the staff they already have, which could be an opportunity for you to pick up extra hours and earn additional income that can be set aside for later.

6. Seek Freelance Work

If you don’t see any other way to compile an emergency fund, consider putting your skills to use. Whether your talent lies in carpentry, home cleaning, childcare, writing, tutoring, artistry, or lawn care, there are often needs for all sorts of services and skills that you might have. Check Craigslist, online classifieds or wanted ads in your local paper for services required. This supplemental income might not make you rich but it can be a great way to build up an emergency fund.

7. Do It Yourself and Save

Do it yourself projects can save you big money – money that can be put into your emergency stash. Cutting your own grass, sealing your own asphalt driveway, painting your own home, shoveling your own snow, and doing a variety of other household tasks yourself can help you save, and in many instances, keep you healthy as well.

8. Spare Change

While that extra change you have sitting in your car or in the jar on your dresser might not seem like much, you may be surprised. It can add up quickly. I recently took my in-laws’ change jars in to the bank for them. They were stunned when I came back with two empty canning jars and just over $220 in cash. The great thing about keeping your emergency fund in the form of change is that you’ll typically only go to the trouble of taking it to the bank if there is an actual emergency. It’s just too much trouble, and a tad embarrassing, otherwise.

Related posts:

1. How Big Should Your Emergency Fund Be?
2. Switch from Debt Reduction to Emergency Fund
3. The Importance of an Emergency Fund in College

“Why would you go with XXX Bank when YYY Bank’s rate is .50% higher! You could be getting a better return on your money!”

At first, I fell for this type of thinking, just like everyone else. I went with the slightly higher rate at Emigrant Direct. And then couldn’t get my account verified for months! The tiny amount of extra interest I would have earned was wiped out.

If you look at the number of high yield savings accounts I have now, you’d think I was still a rate-chaser. I mean, I’ve got accounts at Emigrant Direct, ING Direct (high-yield checking and four savings sub-accounts), E*TRADE Bank, Citibank, and even a SmartyPig account.

Actually, the reason I have all of these accounts is not because I’m a rate chaser. It’s because for the bulk of 2007, I was a bonus chaser. If your bank offered a bonus of $25 or more, there was a good chance I took advantage of it and opened an account! (Assuming your account was fee-free and had no minimums.) Of course, 2007 was a different time, economically, and very few banks are still offering bonuses for opening an account. ING Direct still has the same bonus referral system it’s had this whole time, though.

I can’t recommend that you be a bonus chaser like me. First of all, it’s much harder to do these days. Secondly, it results in a lot of open accounts. This can be a security risk if you don’t carefully monitor them all. I use Yodlee and Mint to monitor all of my accounts and make sure there’s no fraudulent activity. There’s other software and web sites you could use, too. No matter what, you’ve got to have a system for tracking your open accounts.

Why keep all of those accounts open? Why not just close the accounts that have poor customer service, or I’m not happy with for any reason? Well, I’ve never had a major problem with any of my accounts. Secondly, I use all of those open accounts to my advantage!

Savings Rebalancing

The idea of “savings rebalancing” is an extension of my Savings Snowball. I use all of the different accounts as “buckets” for my savings goals. One for my brother’s Florida wedding, one for a new car fund, one for an emergency fund… there’s a lot of them! For that reason alone, having multiple accounts is just nice. With one account for everything, I’d have to keep track of how much money was in each goal on paper. With multiple accounts, I can just set up automatic transfers out of my checking account, and I can easily see how much is in each goal.

Rebalancing comes into play when I establish a new savings goal. It actually happens more often than you would think. A few months ago I closed my “textbooks” savings when I graduated, and started my “Brother’s Wedding” and “Charity Fund” savings goals. With this big shift in goals, it was time to look at my accounts and figure out the best place for each goal.

For the goal that will have the most money in it (currently, my car fund), I picked the account that was giving the highest interest rate at the time of rebalancing (SmartyPig). For the emergency fund it was more important that the money be easily accessible than it get a high rate, so it stayed at ING direct. My charity fund took over the hole that was left in Citibank when I moved my car fund over to Citibank.

You don’t have to shift a lot of money around to rebalance. My car fund had $117 in it when I moved it from Citibank to SmartyPig. But I also had a $50 SmartyPig gift card, so there was already money in that account. That meant I only needed to move $67. But, instead of moving it from one savings account to the other, I just put $67 in SmartyPig from my checking account. That brought the balance up to what it should be, and I just counted the $67 as a contribution to my charity fund.

So what does rebalancing do for me?

• Ensures that I’m getting a high rate on the largest chunk of my savings.
• Forces me to reevaluate my savings snowball.
• Keeps me sane and out of the rate chase debate!

Savings rebalancing is best if you’ve got a real Type-A personality, which most rate-chasers do! I highly recommend it if you have several accounts open because of rate chasing. And if you don’t have one, I highly recommend an account with ING Direct. Out of all of the accounts I have, their customer service and ease of use makes them my favorite!

Related posts:

1. Back to Basics #2: Savings Accounts
2. E*TRADE $25 Bonus with High Yield Savings
3. Rethinking my Bank Accounts

Just as a reminder, here’s what my “savings snowball” looked like the last time we looked at it:

So how’s that working out for me?

Bro’s Wedding: Here is the major fail. I haven’t put anything aside for this yet. See, my savings snowball used to be easy. The “all extra $$” thing worked quite well… when I had steady employment. I would throw handfuls of cash at whatever goal had that for the “monthly payment.” Now that I’m making my way on freelance income? It’s a different beast. I need to adjust my habits accordingly. As you’ll see below, I’ve done fine with the goals that had set monthly payments.

So, I need to set a minimum monthly payment for this. Some months are really lean, but I think I can pull off $25/month for now. Hopefully, I can get back into “all extra $$” once paychecks are steady.

Emergency Fund: This is just hopping along at $10 per month. I know, I should increase that amount. I promise I will when I get a job. But for now it’s actually doing better than expected. I thought I’d have to dip into this fund in order to buy new tires for my car the other day. Turns out all the mechanic needed to do was clean and reseal my tire. And he did it for free! So my e-fund is completely intact.

Future Car Fund: If you’ve been reading along, you’ll notice I moved this from my Citibank account to a new SmartyPig account. But, not much difference other than that – it’s still chugging along at $10/month.

Retirement: Once again, an amount that will increase when I get a job. Employment is important for savings, you know? But it’s growing at its own little pace of $5/month.

New! Charity Fund: The charity that I’m highly involved with, Students for Cambodian Schools, held a big fundraiser a few weeks ago. I gave a lot of my time (I only slept for 7 hours during the 65 hour fundraiser), but I still wished that I could give more of my money. So I started a charity fund in the Citibank account that I vacated my car fund from. And because I’m lazy, I left the automatic deposit at $10/month. That sounds good for now.

Getting Established Fund: Not included in the snowball chart above (because I’m no longer contributing to it), but worth talking about regardless. This is another place for good news: I haven’t dipped into it yet! Yep, I have neither touched this nor my emergency fund since classes ended. If all goes well, I won’t end up using the entire thing, and I’ll be able to roll what’s left over into another goal… like saving for my brother’s wedding.

New Savings Snowball

Conclusions: Well, different life/employment situations call for different savings strategies. You think that would be obvious to me, but sometimes it takes a few months of doing it wrong to see how to do it right. But all-in-all, I’m quite proud that I’ve managed to live off of my freelance income these last few months, instead of dipping into my savings. If I can keep that up (and get a job!), this will all work out.

Related posts:

1. Savings Snowball Update: Back in Action
2. Savings Snowball: New Year 2010
3. Savings Snowball in Action

First of all, you choose savings goals for your SmartyPig savings accounts. I love this, because most of us fail when we “just save” – we do a lot better if we attach particular goals to our savings. Also, if you make your goal public, friends and family can add money to your savings goal. I love this as an idea for birthday/graduation/whatever presents. I mean, I have enough stuff, but my savings goals are really important to me.

The real kicker is that they’re offering a higher interest rate on savings than most online banks right now. 3.05% APY blows all of my other accounts out of the water – they’re all hovering around 1.50%. But still, I didn’t want yet another online savings account. Most people say I have too many already – I have savings accounts at ING Direct, Emigrant Direct, E*TRADE, Citibank, and I just cancelled a low-yield one at Bank of America. Did I really want to add another one on top of that?

Well, yes, I finally did open a SmartyPig account as well. Mostly because I won a $50 SmartyPig gift card from the SmartyPig blog. I decided to use it as an opportunity to set up some new savings goals and move some money to the higher-yielding SmartyPig. I changed my Citibank account from a “new car fund” to a “charity fund,” where I’ll save up to give to my favorite charities throughout the year. Then I went to SmartyPig to reopen my “new car fund” there.

For your benefit, I documented the process of opening an account with SmartyPig below. It’s a little more complicated than some other online banks, but once you have an account open, it seems fairly simple to start multiple savings goals (just like the simple process of opening sub-accounts at ING Direct).

It is a bank account, so be prepared to give up the following information to open an account:

• Full name
• Date of birth
• Social Security Number
• Address, and previous address if you’ve moved within 2 years
• Driver’s License (or State ID) Number
• Five security questions and answers to identify you

And after that, you’ll have to answer four identity verification questions about yourself – which are probably pulled from your credit report based on the information you gave above. (According to the people at SmartyPig, this is a soft credit pull, not a hard one.) Once you’ve answered these questions, there are a few more terms of service to read and agree to, and then your profile will be created!

Now, to create a savings account in SmartyPig. Like ING Direct, SmartyPig allows you to have several savings accounts (or sub-accounts) within your profile. This is really handy for people like me, who have multiple savings goals. In my case, I’ll just set up the one for my Future Car Fund for now. But if I like SmartyPig a lot, it could become the place for all of my new savings goals as I come up with them.

To create a savings account, all you need to do is link it up to a funding source: an existing checking or savings account of yours. Once you’ve done that, you can create your first savings goal! You must set your savings goal, which can be changed later. I want to buy a car, probably about 5-10 years from now, depending on how my current car holds up and what happens in the rest of my life. For now, I’ll set the goal as low and far away, since I don’t have much money to contribute to this goal yet. Later, when I’ve got more money to contribute each month, I’ll adjust it. Honestly, I wish they made it a little easier to just say “$10 per month” instead of having to fiddle with the target amount and date.

A new savings goal requires an immediate deposit of at least $25. This was something I didn’t exactly care for, but thankfully doesn’t throw much of a kink into my plan. But now it’s something you can be aware of going into it, that I wasn’t aware of myself. So just to reiterate: for a new savings goal, you’ll need to be prepared to make an initial $25 deposit, and commit to automatic deposits of at least $10 per month thereafter (until your goal is complete).

So after you set up your initial deposit, figure your monthly contribution, and (of course) agree to some more terms of service, your new SmartyPig savings goal will be set up. Now, you might want to move more money into the goal. Maybe you’re like me, and you already had some money for this goal sitting in another savings account. Or maybe you’re like me in that someone gave you a SmartyPig gift card. Both are fairly straightforward and easy to find in your profile.

SmartyPig is a bit more stilted and rules-y than other savings accounts, but that might actually appeal to a lot of people. Some of us just need a lot of rules and automatic transfers to actually set and meet goals. Also, the higher-than-most-online-banks interest rate that they’re offering at the time of writing this (3.05% APY) is primarily what attracted me. (That and winning the $50 gift card, of course.)

If you like, you can open your savings goal up to friends and family to contribute to. If you do this, you can add a cool little widget to your website or Facebook profile, inviting people to do so. Like this:

Of course, you are all welcome to help me out with my future new car. I’m thinking a hybrid or an electric… or whatever awesome technology they have by the time I’m ready to trade in the Oldsmobile. What do you think?

Related posts:

1. Where to Stash Your Rainy Day Fund
2. How Big Should Your Emergency Fund Be?
3. Switch from Debt Reduction to Emergency Fund

I don’t feel much of anything, really. Maybe I’ve become jaded by years of final exams – being on the “quarter system” instead of the semester system means I had 50% more “finals weeks” than my friends from high school. You get pretty used to the drill – presentations and multiple choice exams, or, as it was when I was in film school, endless screenings of films.

Tomorrow is supposed to be a brand new day! My first day as a graduate! Except I don’t walk the stage to get my diploma until May, and job applications and cover letters just feel like more homework. Nothing feels like it’s changing, because changes are more gradual than that. Like graduating from high school: nothing really changed then until my mom and my sister put the last box in my dorm room at the end of the summer, and said “See ya!”

So maybe it won’t feel different until I start a job, or move. But regardless of what it feels like, things are different. My student loans have come due, and I can only be a mooch for housing for so much longer (Thanks Mom! Please don’t kick me out yet.). And my savings goals? Those have to change with me.

The Old Savings Snowball

Here’s what my savings snowball looked like the last time we checked in:

Name	Goal Total	Progress	Monthly Payment
Getting Established	$2,000	$1066	All extra $$
Emergency Fund	$10,000	$425	$10
Future Car Fund	$10,000	$55	$10
Retirement	Infinite	$36	$5
Student Loan Interest	$500	$68	$60

Remember, the idea is that I pay the monthly payment on every goal except the top one. For the top one, I throw as much money at it as I can, so that I can achieve it as soon as possible.

What’s Gotta Change?

Getting Established Fund: It doesn’t make any sense to contribute to this anymore, because it’s time to start drawing from it. I’ve officially entered the Getting Established period. I don’t intend to spend the money all willy-nilly, but it’s there to get me on my feet now. Basically, I’ll pay for what I can out of pocket, and if I need more money each month, I’ll draw it from this fund, first.

Emergency Fund: It’s a little bigger now! Is $10,000 an insane goal for this? Kinda – but it’s a long term goal. Right now I’m just happy that there’s anything in there at all!

Future Car Fund: My current car is still running fine, thank you very much. Although it seems like I’ll be needing new tires in the near future, the rest of the car is just dandy. Passed inspection not too long ago, actually.

Retirement: Ah yes, my teeny tiny fund. No plans to up the contribution to this until I, you know, get a job.

Student Loan Interest: Dead! I’ve paid everything in the fund to my loans, again. Now some of my loans are going to enter repayment, so I won’t be saving money up for them anymore, I’ll just be, you know, paying them.

So, two categories gone off the list – is it time to add a new goal?

Yes! Last week, I was asked to be a part of my brother’s wedding party, and it’s probably going to cost me more than a pretty penny. I don’t have solid numbers yet, but I do know the wedding will be around October of 2010 and it’s a destination wedding. So, it will be my Bro’s Wedding/Travel Fund all wrapped up in one. I’m estimating I’ll need to save at least $150/month for that. I’ll adjust that number as plans become more solid.

New Snowball!

Name	Goal Total	Progress	Monthly Payment
Bro’s Wedding	?	$0	All extra $$
Emergency Fund	$10,000	$514	$10
Future Car Fund	$10,000	$76	$10
Retirement	Infinite	$47	$5

I considered “upping” my contributions to my Emergency Fund, but that doesn’t make much sense if I’m drawing money out of my GE fund, now does it? It’s just shifting money around at that point, and may cause me to have to draw from my Emergency Fund, as well. I’ll reevaluate contributions when I have… that thing… what’s it called again? Oh, a “job.”

Related posts:

1. Savings Snowball Update: Back in Action
2. May Savings Snowball Update
3. Savings Update for the New Year