Simplify Your Money Life
Think of a bank account as a seed. You water it and help it grow. When you want its fruit, you pick it. And you trade the fruit for other things. For now, we simply want to get the seed to grow.
To start you shop for two seeds. Whoops, I mean you shop for two bank accounts -- a savings account and a checking account. You want bank accounts with a high interest rate, ATM fee reimbursements, no minimum balance, and zero fees.
If you already have a savings and checking account you’re happy with, great! Let’s use those.
If you have any other accounts, log in to them. Transfer the money from these old accounts to the savings and checking accounts you chose above. Then close the old accounts.
To be safe, I recommend doing this in two transfers. Transfer 50% of the money from each old account first. Wait 3-4 days till the first transfer clears. Then transfer the final 50%. This will keep 50% of your money always available while the other 50% is in transfer mode.
Once your old accounts are at $0 call the bank and close each account.
You should end with a simple: one checking account and one savings account.
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Once you decide which accounts fit best, call them and sign up! After you sign up, it may take 7-10 days for the account to become active. Once it’s active, use the 50/50 transfer method I walked through above to zero your old accounts. Then close them.
I have an Ally Bank savings and checking. They currently give me .10% interest on the money in my checking and .99% interest on the money in my savings. They reimburse ATM fees, have zero hidden fees, no minimum balance, and I’ve been very happy with their customer service.
It’s worth a note that Ally is an online bank, meaning there’s no building to walk inside and talk to someone. Instead you speak with the bank tellers over the phone. Online banks do this to cut the cost of renting a building. In turn they provide higher interest rates to your accounts.
The only issue I’ve run into using an online bank is it takes 3-5 days to get a cashier’s check. Being that I’ve only needed a cashier’s check once in the past 4 years when purchasing my moped, this hasn’t been a hinderance.
If you want to solve for this problem, get a back up checking account with a wide-spread “on-the-ground” bank like Wells Fargo for ease of use. Or sign up with a local bank or credit union if you’re looking to support a more ethical choice.
Once the back up account opens, transfer $100 to it. Then just leave it be. If you ever need a cashier’s check, transfer a lump sum over to the back up account once you know you want to make a purchase. That way, once you find the perfect car, etc., you can walk right in and get your cashier's check.
Now go out there and simplify. It’s the first step on your financial freedom journey. And it’s going to make it easier for you to grow that freedom stash!
No matter how you do it, get here -- two main bank accounts: a checking account and a savings account.
We’re going to put them to use next post. So get moving!
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