Your favorite doughnut-loving, personal finance blogger is back with more juicy details about our secret stash of limited edition Krispy Kreme Platinum Doughnuts. I mean, here’s the scoop on all of those accounts bearing the names Nick and Tegan.
Assets and Liabilities
- Checking. Bank of America has the honor of housing our only checking account. I use their billpay option to pay most of our bills (utilities, credit card, etc.). I never have and never will activate this check card they sent me with our account. Why not? Nick’s Awesome Money Tip #1: Check and debit cards are garbage. If you’re going to pay off your balance every month, it’s far better to use a credit card so that you can earn rewards and have the protection that debit cards lack. If a thief gets your check card’s number, he can wipe our your whole bank account, and you’ll suddenly have lots of bouncing checks. Credit cards–you see a fradulent charge, call up customer service, charge is gone, back to sipping margaritas in the shade.
- Savings. I’ve also got a savings account at Bank of America, but I have no idea why. I’ve got the minimum $300 sitting in it earning next to nothing in interest. Most of our savings are in a high-yield account at Emigrant Direct. If you haven’t heard of them, you’re not alone. They’re the internet-only branch of Emigrant, a century old bank in New York. Emigrant Direct (ED) offers only one product: a savings account with an Annual Percentage Yield of 4.00%. The catch? None really. There’s no minimum balance, and you can transfer money in and out of your ED account by linking it to another checking account. Our ED account is linked to our Bank of America checking. If I want to put money into ED, I initiate an Automated Clearing House (ACH) pull from the ED website and it yanks the money right out of Bank of America. We have a third savings account with ING Direct, another internet bank with an annual yield of only 3.75%. I opened this account less than a month ago with just a dollar purely for the $50 account opening bonus. It doesn’t take a math major to figure that our ING Direct account only has $51.00 in it, and as soon as the bonus clears (after 30 days), it will go back to having just a dollar … unless ING ever overtakes ED’s rate. See this article over at the Bank Deals blog to learn why that will likely never happen.
- 401k. Try as I might, I cannot find any documentation that actually calls it a 401k, but I have the first 8% of my paycheck (pre-tax) put into an account held by CitiStreet. My employer matches 50% of that 8% with company common stock. I’ve got the money in various investment options, but the company common stock has been performing the best as of late. I think it jumped 2% just in the last 24 hours. Unfortunately, I only opened the 401k a month ago, so that 2% jump translated into about three dollars for me. Suffice it to say, anyone who is able to and doesn’t contribute to at least their company’s matching limit is missing out on lots of free money and should have to pay a dummy tax to those of us who do contribute.
- Liabilities. Just one here: a car loan. That 2004 MINI Cooper doesn’t pay for itself, and while I had the cash to pay for it in full, I decided to get the loan because my dad sells cars and got me one with a low rate and because I needed to start building some credit history. Right now, our savings is making more than enough in interest to make up for the interest payments on the loan. I’ve got about 18 months left on the 36-month loan and am paying $475 a month. Last time I checked, she has a Kelly Blue Book value of about $17,000, though I expect that to drop somewhat significantly in 2006 since most cars devalue quickly after they’re two years old.
- Credit Cards. Only two of these: a Citi Shell gas card and a Bank of America Power Rewards Visa. Not realizing the awesome power of credit cards until recently, I haven’t yet had the chance to apply for a whole bunch. That’s one of my goals for 2006–obtain lots of credit. I avoid going above 30% on my credit limits of $1,400 and $2,900 because credit scores start taking a hit above that level of usage. I also pay it off every month in full directly from my Bank of America checking (or, rather, the ED account connected to it).
And since this blog is operating on the basis of an open wallet, here are the current balances on all of the above:
The Power Rewards Visa isn’t showing because it has no balance yet and the 401k isn’t populated with delicious data because my employer hasn’t yet enabled Quicken download support, so I’ll have to do it manually sometime.
Come next entry I’ll be covering the list of our regular expenses. Here’s a sneak peek: 17% of our monthly expenses are for Tegan’s midget porn habit. Uh-oh, she heard me type that…