Three Things You Should Look for in a Savings Account

Posted on Tuesday 31 July 2012

The reasons for starting a Savings Account are many and varied. Some start accounts right after a baby is born so that they can save for their child’s college education. For others a savings account serves as a “rainy day” for emergencies or unexpected and costly life events, such a damaging storm or economic crisis, which in some cases can be one and the same. There are different types of savings accounts to learn about when deciding the best option for your needs. Be sure to take each one into careful consideration when choosing a savings account that’s right for you.

Basic Savings Account

A Basic Savings Account is also referred to as Passport Savings Account. In popular vernacular it is often referred to as a “Rainy Day Savings Account”. This type account is simple to acquire and easy to maintain.


  • No Minimum Balance and Easy Withdrawal: Though some banks or credit unions do require that there at least be some money in the account rather than a zero balance and the bank seldom limits when and how much you can withdraw from the account; although some banks or credit unions may stipulate a limit on the frequency of withdrawals.
  • Safer savings: It is safer than storing your savings at home under you mattress, in your dresser or even in a home safe. You home may suffer from an accidental fire or dangerous storm. If your cash is destroyed it is gone forever. But, if you have your funds in a Savings Account the money is insured by the Federal Government.
  • Interest Earnings: A Basic Savings Account earns interest. The amount varies according to economic conditions. Essentially the bank or credit union is paying you to use their facilities in exchange for the privilege of using your money for investments. Rather than storing you hard earned money at home, you can watch your money grow in an account.

Money Market Fund

A Money Market Fund works differently than a Basic Savings Account, but it does not require particular effort in the part of the owner of the account.


  • Higher interest rate: Interest rates are usually fixed, there for they do not fluctuate with the economy. The interest rates can be as high as 5%.
  • Liquid funds: This fund can easily be transferred to another account such as a checking account for overdraft protection or if the account owner finds they need emergency money.
  • Security: Withdrawal frequency is limited by the bank, therefore the account owner is encouraged to maintain the account levels better. This limitation can help encourage a better savings strategy for long-term plans such as buying a home or planning a retirement.

Certificate of Deposit

A Certificate of Deposit requires better planning on the part of the account owner, but the dividends for such planning are better.


  • Maturity: The CD requires that the money is not withdrawn until the account reaches maturity. The accounts are set for a certain amount of time, which could be anywhere from 6 months to 10 years, depending on the account owners preference. The only potential downfall is that there is a penalty for early withdrawal, but with careful planning this is a negligible issue.
  • Higher Interest Rate: CDs often have a higher interest rate based on the planned time of maturity. This rate fixed, therefore it does not change as the economy changes.
  • Low Risk Investment: A CD can be made for as low as $500. There are various types of CDs to consider, such as an Expandable CD that allows you to add funds to an account.

There are many choices when considering opening a Savings Account. One should consider their purposes to opening such an account. If the purpose for the account is to save for the short term or to protect your other accounts, a Basic Savings Account is probably sufficient for your needs. If the one is planning for something more long term, than a Money Market Account or Certificate of deposit may be a wiser choice. Ask your financial institution for brochures for their operations. Ask for advice on which plan is best for you. They will be able to show you what the different plans can provide for you with your money needs. Make a wise choice with your money, now.

savvy @ 8:00 AM
Filed under: General Finances
Tips for Getting Your First Mortgage

Posted on Monday 30 July 2012

Buying your first home is going to be intimidating. Most of us do not have the funds to just browse the streets and pay cash for the house up front. This is why we have mortgages. A mortgage is the loan used to finance the purchase of a home, and it is probably going to be a big one. If you’re planning on buying a home anytime soon, these few tips may come in handy when getting your first mortgage.

What Can You Afford?

With a mortgage, if you are unable to pay your monthly installments or pay the loan off by the set time, the bank has the right to take your home to get their money back. This is a terrible position to find yourself in, which is why it is so important that you make sure you will be able to pay the lender back before you borrow the money. Most monthly installments are typically made up from principal, interest, taxes, and insurance (or PITI.) The principal is the amount borrowed, the taxes involved are usually property taxes that are set by the community that you live in, and homeowners insurance is generally required by a lender before they will close the deal. Now, you’ve got to remember that your house payment isn’t going to be the only bill or necessity you have to pay for each month, so it is important to take everything into consideration when deciding how much you can borrow. Try using an online mortgage calculator to help you figure out how much you can afford.

Down Payment

Having a large down payment will really help you to save money. If you put a down payment that is less than 20% of your total loan, it is considered to be risky. This can increase the interest rates on your loan, and you may be required to pay mortgage insurance. This type of insurance does not protect you, it protects the lender in the event that you default on the loan.

Small Down Payment

If you’re unable to put down a large down payment or you have less than perfect credit, there is still hope for you to own a home. The Federal Housing Association, a part of the Department of Housing and Urban Development, may insure your loan to give you a better deal and help you get a place to call your own. With an FHA loan, you can have a down payment as low as 3.5% of the purchase price and can include most of the closing costs and fees in the loan. The downside is that you may be limited on the size of your loan.

Types of Loans

Fixed rate mortgages and adjustable rate mortgages are among the most common types of loans. However, they are not your only option. There are many types of mortgage loans to choose from, and it is important that you choose the one that is right for your situation. With a fixed-rate mortgage, you will pay the same interest rate for the length of the loan. The downside is that if rates fall, yours will stay the same. Adjustable rate mortgages have a fixed rate, but only for a set time period, after which, they fluctuate. The downside of this is that you’re at the mercy of the market. The rate could climb to something higher than you can afford. Other types of loans would include the VA loan which is available to veterans only, a balloon mortgage, and interest-only mortgages. Additional options may be available to you, so be sure to talk things over thoroughly with your lender.


It is a good idea for you to get pre-approved by a lender before you begin your search. This will help you to more accurately determine your borrowing level. This is beneficial to you because it will allow you to limit your search to homes that you know you can afford and will reduce the chance of you falling in love with something that is out of your price range. Once you have been pre-approved, you can also make a more serious offer on a home you like.

Lock the Interest Rate

Interest rates on mortgages are constantly changing. This can be a good thing or a bad thing. If you find an interest rate that is too good to be true, talk with your lender about locking in the rate. This will protect you from a rise in the rate for a set time period. If you do choose to lock in the rate, make sure that you give yourself enough time to close on the home before the lock runs out.

Shop Around

Whenever making a large purchase such as a home or a car, it is important that you shop around. Check with all types of businesses to find the best interest rates and loan terms. Be sure that you compare the benefits and risks as well as estimated closing costs of each institution before you choose the one that is right for you. Don’t just go for the company with the best deal either, but make sure that they are someone that you can trust to keep your best interests in mind.

Guest post from Harper Ryan. Harper writes for

savvy @ 8:00 AM
Filed under: General Finances
6 Tips to Dodging Debt and Reaching Financial Freedom.

Posted on Friday 27 July 2012

Getting out of debt is the first step to becoming financially independent. Whether you’re trying to pay off student loans or a mortgage, debt may seem impossible to evade. That’s why TD Bank is here to help!

1.       Face the Problem

–          Collect all of your statements and calculate your outstanding debt (the total amount that needs to be paid).

–          Helpful hint: Consider the finance rates for each debt that you have and make note that paying the ones with the highest rates first will save you money in interest charges.

2.       Evaluate Your Expenses

–          What else are you spending money on that is making it more difficult to pay off your debt? Daily coffee runs and going out to lunch instead of packing a lunch are small costs that can add up.

–          Separate your “needs” from your “wants”. Cut down on the frequency of “wants” purchases in order to fulfill your “needs” and contribute to paying off your debt.

3.       Make a Plan

–          Create a realistic and reasonable budget-plan.

–          Make deadlines for yourself and stick to them. Create a realistic timeline as to when you will have one bill paid off and then start saving your money for something else.

4.       Save, Save, Save!

–          In addition to the money you are using to pay off your debt and   spend on your “needs”, it is important to put some money away in savings each month.

–          When you’re ready, consider investing some of your savings. Stocks options, bonds, CDs and mutual funds are some investment options you may find beneficial.

5.       Reward Yourself

–          Paying off debt can take a lot of hard work and discipline. Continue to save and follow your budget-plan but don’t forget to live your life while doing so.

–          Reward yourself for reaching a specific deadline or accomplishing a goal. Spend a night out with friends or upgrade one of your electronics. You deserve something for your hard work but don’t get crazy!

6.       Know Where you Stand

–          Regularly review your plan and understand that it doesn’t need to be set in stone. Life doesn’t always go according to plan and you may need to make adjustments along the way.

–          Always know how much of your debt you have already paid and how much more you have left. Keeping track of your progress will help motivate you and will only bring you closer to becoming debt free and financially independent!

savvy @ 8:00 AM
Filed under: General Finances
Understanding Credit Reports

Posted on Monday 23 July 2012

For many, there is much confusion surrounding credit reports. The mere mention of the phrase causes anxiety in some people – and anxiety which is wholly unnecessary when you examine the facts. For one thing, nobody gets ‘blacklisted’ and – contrary to popular belief – there is no single credit ‘score’ that lenders use. Instead, anytime you apply for a loan, mortgage or credit card, lenders have access to your file, which details your credit history, so they can evaluate the security of lending you money.

In the UK, there are three credit reference agencies, CallCredit, Experian and Equifax. Each one compiles its own report, so each one is likely to be slightly different, as no lender consistently communicated the same information to all credit reference agencies. It’s important, therefore, to get a free credit report from each agency so you can compare and contrast their reports. Beware of firms online who claim to collate all the information – they may not have full details from each agency. In order to do a thorough check on your status, you should apply to each agency separately.

The report itself is full of information from your past banks, building societies and credit card companies (including the ones you still owe money to). Other details in the report might come from phone companies, mail order firms and even the electoral register (or other public sources). The report will outline when you borrowed money, and whether you made timely payments.

Other than that information, the file will contain your name; address; total amount owed; details of your current account; whether you have made late payments on existing or past accounts; whether you have missed payments altogether; details of any CCJs made against you and finally, whether or not you have been declared bankrupt or entered into an IVA.

But even missed payments are wiped from your report after enough time has elapsed. A CCJ or declaration of bankruptcy might last for six years, while a missed credit card payment will probably be wiped within three.

Although, to many, the very notion of all this financial information being held over them can be a little scary, especially if they had a difficult past but have now moved into a new, more responsible phase of life. It’s important to remember that, even if you have spent a few years acquiring debt and even defaulting on repayments, a few years of responsible borrowing will be the first thing a lender sees. And most of the time they are looking for reasons to lend rather than to reject applications.

If you do have a dispute with the information on your credit report, the credit bureau has 30 days to verify the data. More than 70% of these disputed are resolved within a fortnight. Yes, some of the information on you might be inaccurate right now, but if you obtain your reports you can correct them. If you avoid the issue the inaccurate information will be a lenders gospel on you.

savvy @ 6:22 AM
Filed under: General Finances
Don’t cut down your travel but the cost

Posted on Thursday 19 July 2012

When was the last time you went out on a family trip to spend time with your loved ones? Is it even difficult to remember your last get together beach parties with friends? Has all of it been the result of your poor financial condition that seems to deny you even the little happiness of life?

It is then time to sit back and give it some serious thought instead of letting your life seems lifeless and devoid of fun. It is also the time that you spend with your family and kids and relieve yourself of the stress and frustrations that makes your life difficult.  So cutting down the idea of travel completely will not be a good idea. Instead it will be better to opt for frugal ways to cut down your travel cost.

So here are some frugal tips to save on your travel cost:

  1. Select an affordable location: It will be a good idea to start your trips with a location that will not burn a hole in your pocket. Make sure that the location you chose can be covered up with your little savings easily. Do not opt for a place that is expensive and cannot be afforded. It will be of no use piling up debts due to expensive trips.
  2. Look for short distance trips: Try and start with short distance trips that can be covered by car. This way you can visit a new place, spend time with kids, and also save money on flight tickets.
  3. Book air tickets early: You can save quite money on your tickets if you buy them early say around 3-4 months before. This way you can get them quite cheap. Moreover the travel agencies also offer various discounts and package deals at affordable price if you make the bookings early.
  4. Look for affordable hotels: If you want to spend more on your purchases you can balance it by opting for a low cost hotel or lodge. As during the trip you would be spending more time travelling and exploring the place it will be an unnecessary thing to select an expensive hotel.
  5. Rented house can be preferable: Most of the hotels have a limit on the number of person staying in one room. It is 2 or 4 in the majority of the cases. So if you are out with your family members and relatives it would be a good idea to take a room on rent. However it will only be fruitful if you are staying at the place for a few days.
  6. Avoid expensive restaurants: When it comes to food expenses during trips it can rise high up if you are not too careful. Try and avoid food at expensive food joints. If you want to taste the cuisine of that place restrict it to just one day. Look for low cost food joints where you can get meals at affordable rates. If you have rented a place for stay you can have homemade stuffs too.

Author bio: Sam is a financial blogger and consultant with He helps people with expert advices on issues related to frugal living, budgeting, savings, loans, home equity and other financial issues. With his help many people have been able to resolve their debts comfortably.

savvy @ 8:00 AM
Filed under: General Finances
Buying in Bulk: Frugal Tips for Large-Family Grocery Shopping

Posted on Thursday 12 July 2012

Thanks to Kate Sorenson for contributing this informative article from Coupon Cravings which can be seen here. Kate, as a mother of two, understands how the costs of grocery shopping can add up, even with just two kids.

It comes as no shock to any penny-pincher or savings-chaser that buying food in bulk can save you money every time you leave the grocery store. However, blindly buying large quantities because they’re on sale can be an irresponsible thing to do not only from a financial standpoint but also an ecological one as well. Luckily, the Internet has made it easier than ever to not only save but to understand how products affect the world, and here we’ve compiled three tips to promote saving responsibly.

Cut the Packaging

While your favorite pistachio producer or candy carrier may package their products cleverly, the fact of the matter is that this is just another way to milk out a few remaining cents on your upcoming purchase. Skirting away from prepackaged goods is can save you up to 89% per product, according to a study run by What’s more, shopping from the bulk dispensers allows you to take as much or little as you want, cutting down on waste in the long run and saving you money!

Take it a Step Further

If you’re visiting the bulk bins only for a handful of nuts or a few of your favorite chocolates, you’re missing out on a big way to save. Picking up a half pound of peanuts and then dropping your favorite peanut butter in your cart simply doesn’t make sense when you can make so many things from bulk food ingredients yourself! Peanut butter, cakes, energy bars, muffins—there are more opportunities to seize production of your favorite goods yourself than you can imagine! What’s more, homemade treats are frugal and as nutritious as you please.

Don’t Let It Go to Waste

If you’re buying anything in large quantities, you’ve probably had to face the grim reality of throwing some of the spoiled remnants away. But with a stand-alone, upright freezer you can save your favorite goods without letting any of them go to waste! What’s more, the vertical design helps you navigate your frozen produce and keep things from getting freezer burnt or disregarded for too long. Save your food and your wallet.

Taking full advantage of sale items and couponing are great ways to save with every trip to the grocery store, but sometimes browsing the bulk foods aisle is simply the easiest way to chalk up major savings. Imagine a kitchen full of your favorite products without having to pay the prepackaged prices!

savvy @ 8:00 AM
Filed under: General Finances
How to Take a Summer Vacation — Without Busting the Bank

Posted on Wednesday 11 July 2012

With the economy feeling shaky again and so much turmoil, you might wonder if you have the money for a family vacation this summer. Don’t worry. From day-trips to web sites that help locate cheaper-than-ever vacation rentals, there are many ways to save without sacrificing fun and quality time with your family.

The real secret behind reaching this goal involves taking some time to plan and search out the best deals in advance. It also helps to think outside the box.

Here are some strategies to consider:

  • Stay close to home. Take a look at local tourism and travel research web sites such as Fodors. You might be surprised about the local attractions right in your area that you’ve never seen. Many Midwesterners, for example, are within a few hours driving distance of some amazing Great Lakes shore destinations stretching from Michigan to Minnesota. You might even choose try a whole series of daytrips as a “staycation.” And since you are not spending money on much gas, hotel or airfare, this is a great opportunity to splurge and enjoy some of the more expensive local attractions such as amusement parks or zoos that you might avoid.
  • Pay less at the pump. Hitting the road? Spend a little time searching for the best-priced gas stations. If you have a smartphone, you can even do this through apps that use your phone’s GPS technology to list the cheapest gas station around wherever you happen to be. Checkout apps available from GasBuddy and Local Gas Prices.
  • Get a deal on a hotel. Decide to crash somewhere for the night – or a few nights?, with its “name your own price” feature, can be especially helpful when it comes to getting a deal on a hotel in an urban area. There’s also, an aggregator site that allows you to search websites such as and at once. Wondering if the deal is too good to be true? You can check out hotel ratings and guest reviews on TripAdvisor.
  • Search out alternative lodging. Even cheaper than a hotel – especially for families – can be renting a condo or house directly from its owner. They are often just as well situated at a hotel, but at a more reasonable price. Plus, you can use their kitchens to save money on eating out. Check out, and to find out more about vacation rental deals. Going on a nature-loving trip? There are websites such as ReserveAmerica that can help you search up camping sites and availability, and even allow you to reserve a spot in some cases. You might also check out
  • Find special deals. Whether archery lessons or stays at beds and breakfasts, the “daily deal” websites can help provide that extra something for a summer break. About a month before the vacation, sign up for Groupon, LivingSocial, and AmazonLocal in the location where you are spending the time out. You might also try aggregating deal site offers through another website called Check out specific travel-deal websites JetSetter, LivingSocial Escapes, and TravelZoo. Also consider searching on Google for a particular restaurant or attraction’s name and then the word “coupon.” You might get lucky.

Kelly Spors writes for, a leading retirement and Roth IRA resource. A former Wall Street Journal reporter, Kelly has written about small business and personal finance for The New York Times, Entrepreneur magazine, Yahoo! and

savvy @ 8:00 AM
Filed under: General Finances