Why Are Savings Account Rates So Low?

When I first started The Simple Dollar in late 2006, it was pretty easy to find a savings account that offered a 4% annual return on your deposits. Some banks, such as HSBC Direct, were offering introductory rates as high as 6% annually. In other words, if you deposited $1,000 into an account at HSBC

The Two-Account System for Automatic Savings

Millie writes in, describing her interesting system of making herself save: I have my paycheck direct deposited into ING Direct. It comes in like clockwork on the first and third Friday of each month. Then, on the 10th and the 24th of each month, ING automatically transfers about 60% of that paycheck amount directly into

Insights into Saving Psychology from The Economist

Recently, while digging through the magazines in our magazine rack, I came across the May 16, 2009 issue of The Economist. The Economist is my primary print source for news and it almost always gives me quite a bit of food for thought. Anyway, on page 82, I found a really interesting article entitled “Smooth

The Paradox of Thrift: Is Saving Money Bad for the Economy?

Two years ago (in those economic halcyon days before the so-called “Great Recession”), I wrote a short article entitled Is Not Spending Money Bad for the Economy? In it, I largely concluded (by my own logic) that not spending money – in other words, saving it – isn’t necessarily bad for the economy at at

Creating a CD Ladder for Your Emergency Fund or Other Savings to Earn a Better, Safe Return

As I’ve mentioned before, my family has a pretty good sized cash emergency fund, somewhere around nine months’ worth of living expenses. Having that amount of cash available is a very nice security blanket for all of us, and in our savings account, it was earning roughly a 3% annual return. Safety, personal security, and

Buying Things Because They’re on Sale Is an Awful Way to Save Money

For years, I’ve been on a closed email list with a group of like-minded people who enjoy sharing internet links with amusing comments (think of an email version of fark or reddit). Lately, though, the list has been completely overrun by a group of about two or three people who have become completely obsessed with

Some Notes on SmartyPig

First of all, a disclaimer: while I’m not directly involved with SmartyPig, I did speak with the development team in detail during the development process and offered a number of suggestions and ideas, and I was kept abreast with their development along the way. This group sought my input during their process of growing from

The Simple Dollar Gets A New Cell Phone – And Saves Significant Money In The Process

Over the last week, my cell phone has slowly been dying. The screen goes black randomly and it ceases to accept button input until I remove the battery and re-insert it. This phenomenon has happened with more and more frequency as of late, reaching the point where it’s killed phone calls in the middle of

Starting A Savings Account For Your Newborn

Last night, I was at a party for several homes in our neighborhood and I had a long conversation with a couple who were completely intrigued by The Simple Dollar. They asked me a lot of questions about it, and also asked a few personal finance questions. The one that really piqued my interest was

How To Set Up Multiple Savings Account Funds Within ING

In the aftermath of yesterday’s discussion about how to manage several funds in one account, several people mentioned actually opening multiple savings accounts at ING Direct under one general account, enabling people to sort their money (I happen to be a big fan of ING Direct, but you may also want to read the note

Building A Home Maintenance And Improvement Fund

Having lived in a house that needed constant upkeep when I was young, I know the value of having money on hand to take care of home maintenance. As a new homeowner, that means I’m going to christen a home maintenance and improvement fund so that when such issues appear, I can handle them. What’s

Kicking My Candy Bar Addiction In The Foot – And Saving Big Money

As I’ve mentioned on here a few times before, I’ve been trying out the Volumetrics weight control plan in an attempt to lose a few pounds. So far, it’s been working quite well, but what I found to be quite interesting is that it really exposed one of my worst daily splurges – and now

Treat It As A Bill: How I Made A Commitment To Saving Work For Me

Not all that long ago, if I wanted to spend money, I’d look at what was left in my checking account and spend it. I knew in the back of my mind that I should be saving some money, but I never looked at it as a requirement at all. It took me a while

Some Thoughts On The 60% Solution

A couple years ago, an extremely influential article entitled A Simpler Way To Save: The 60% Solution popped up on MSN Money. It proposed a very simple way to budget: After analyzing our spending patterns over the past couple of years using our Microsoft Money data file, I determined that we needed to keep our

Defining The Middle Class Through Statistics: Upward And Downward Mobility

Today, I stumbled across a very interesting tool at the New York Times website that attempts to place you in one of five socioeconomic groups (upper fifth, upper middle class, middle class, lower middle class, bottom fifth) based on a number of factors (occupation, education, income, and wealth). I’m quite happy to share my results

Why Savings Accounts – And Why Not

Over the weekend in a post answering anonymous reader questions, I wrote the following: Savings accounts are wonderful places to keep money that is very liquid (meaning you can get it if you need it) and earns a small rate of return with very little risk. Because of these factors (liquid, low risk, some return),

42 Ways That Going Green Saves A Ton Of Money

I admit to being an environmentalist, and a pretty “far out” one, too – I was raised with a Mother Earth News / Organic Gardening type of father who instilled a ton of basic environmentalism in me, and I try very hard to reduce my environmental footprint. Let me put it this way: one of

Nine Tricks I Use To Keep Saving Money – And Not Spend It

It’s pretty easy to save money over a short period – just make a savings deposit and feel good about yourself, right? The real challenge comes over the long haul – how can you make yourself do it consistently and also not be tempted to spend the money? Here are nine tricks I use to

Handling Biweekly Pay Periods: What To Do During Those “Three Check” Months

At one point in my life, I was on a biweekly pay period schedule that occasionally caused me to be paid three times in a month. Of course, at that time in my life, I was an utter fool and I would spend the money on a big splurge, like, say, a weekend trip to