Thinking outside the box is great -unless you’re a cat. Then you’ll probably just want to take a nap in it. It's time to think outside the box regarding managing your finances.
For example, if you direct deposit into your checking account like most folks, what if you switched that to your savings? Could that just be the kind of creative thinking that helps you manage your money more effectively?
- This idea is really for people who tend to spend whatever is in their checking account.
For some, transferring money into a savings account is an afterthought and might never happen.
- Your emergency fund you've heard about a lot on MoneyWise never gets started.
- Changing their direct deposit to a savings account can help break that cycle.
- Then you set up an automatic transfer of your BUDGETED living expenses over to your checking account.
- Transferring money from one of your accounts to another within the same institution should be free.
- That money in your savings account is "out of sight, out of mind." Or another way to put it - you’re paying yourself first.
- Some banks require you to keep a minimum monthly balance in your checking account.
- Since you're intentionally limiting the amount in your checking account, there is an increased danger of overdraft fees. Sticking to your budget is essential.
Next, Rob and Steve tackle listener questions at 800-525-7000 and via email to Questions@MoneyWiseLive.org on a variety of topics:
- There are biblical warnings about not co-signing a friend's debt so should you consider doing it for your husband?
- Is it legal for medical facilities to access your "propensity to pay" and/or credit score?
- If you're getting an $80,000 inheritance, and plan to pay off two cars with a total debt of $30,000, should you then use the remaining money to fix up your house or pay the mortgage off?
- If you have $50,000 in a Green checking account that offers 2.25% and a home mortgage of $100,000 with an interest rate of 3.25%, is it a good idea to leave the $50k in the Green checking or put more money into the mortgage?
- If someone is a co-owner of a house before the other person passes away, does the co-owner wind up with the house if there is no other mention of the house in a will?
- What is the best place to put money when you're saving for a house - ie.: short term saving of less than 5 years?
- If you make just above minimum wage, have $2500 in credit card debt that started as 0% but offer has now expired, should you a.) apply for a low interest loan at the bank, b.) try to find another credit card and transfer the debt or c.) just stay with the original credit card at 12%? budget template
- If you're thinking of opening a pizza shop, should you be comfortable with the usual 3-6 months of emergency funds or should that be a longer period for starting a business?
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