Hi Money Minder,
I’m facing a bit of a dilemma with my new bank account at Cefcu. I started with $1200 in savings and $50 in checking, thinking I would earn some interest by keeping most of my money in savings. However, Cefcu offers 5% interest every 3 months, which doesn’t seem very appealing. Maybe I should have gone for an account with monthly interest in savings, but I’m not sure.
I could use some help with investments and finance. I currently earn around $500 biweekly, but I haven’t figured out my budgeting yet. I really want to maximize my earnings through cashbacks. I’ve even considered applying for a credit card for cash back, but with my income, I’m worried about falling into debt.
What do you think I should do? Any advice on how to handle this situation would be greatly appreciated!
Thank you,
Savvy Saver
Response from THE MONEY MINDER:
Hello There,
Congratulations on opening your bank account at CEFCU! It’s great that you are taking steps to manage your finances and think about your savings and checking account strategy. It’s definitely important to maximize the interest you earn on your savings while also having easy access to your funds for spending.
Given your current financial situation and the interest rate offered by CEFCU, it’s understandable to question whether keeping most of your money in savings makes sense. In this case, with 5% interest every 3 months, it might be worth considering other savings account options with more frequent interest compounding.
Considering that you make around $500 biweekly, it’s important to create a realistic budget once you receive your first check. This will help you understand your expenses, prioritize savings, and set spending limits. Moving money from savings to checking for spending is a smart approach, but make sure to monitor your transactions to avoid unnecessary fees or overdrafts.
Regarding applying for a credit card for cashback benefits, it can be a useful tool if used wisely. Start with a low-limit card that you can pay off each month to build credit and earn rewards without going into debt. Use it for regular expenses and pay the balance in full to avoid interest charges.
In terms of investments, consider speaking with a financial advisor to discuss your goals, risk tolerance, and investment options that align with your financial situation. They can provide personalized guidance and help you make informed decisions to maximize your earnings and savings over time.
Remember, it’s essential to have a clear financial plan, manage your expenses, and balance saving and spending to achieve your financial goals. Take small steps, stay informed, and seek advice when needed to build a solid financial foundation. Best of luck on your financial journey!
Farewell from THE MONEY MINDER.
