Here’s How Much the Average Rich Person Has in the Bank
By: Kailey Hagen |
Updated
– First published on Nov. 1, 2023
The general pattern isn’t surprising. A higher income makes it a lot easier to stash money in the bank. What is surprising is how much more the richest 10% have saved compared to the bottom 20%. The wealthiest 10% earn about seven times more than the bottom 20%, yet their savings are 124 times higher. That’s quite the difference.How to start growing your savingsI won’t sit here and pretend you can penny-pinch your way to a six-figure bank account balance if you’re currently in the bottom 20% with $900 or less in your checking account. It’s probably not going to happen. But there are a few things you can try that could help you get your personal finances on a firmer footing.First, choose the right accounts for your money. A lot of brick-and-mortar banks have maintenance fees and they don’t pay you a lot in interest. That’s bad news for anyone, but especially those who don’t have a ton of extra cash.Online banks, on the other hand, are known for offering high interest rates on savings accounts and some offer interest on checking accounts as well. Most don’t charge maintenance fees or have minimum balance requirements either. Switching to one of these could potentially put more money in your pocket because you’ll be able to ditch any monthly bank fees you’re paying now, and you could earn more in interest.You could also look into community and government programs, like Supplemental Nutrition Assistance Program (SNAP) benefits, that help low-income families with their everyday expenses. This could potentially free up a little extra cash you could put into savings.And if cutting your expenses back isn’t possible, see if you can find ways to boost your income. You could try a side hustle if you have some spare time. Or see if you’re able to negotiate a higher salary at your current job.Saving regularly is ideal, but if you’re not able to do this, set aside money when you can. Even if it’s just $5 or $10 here and there, it adds up. Over time, you can work toward an emergency fund that can help you avoid major financial setbacks when unexpected costs come up. Once you’ve got that taken care of, you can start working toward some of your longer-term goals.
600 Kindergartners Were Given Bank Accounts 12 Years Ago. Here’s What Happened
By: Maurie Backman |
Updated
– First published on Nov. 1, 2023
For many kindergarten-aged kids, the only savings they have is a small collection of coins or bills stuffed into a piggy bank. But opening a savings account for your child when they’re young is one of the best things you can do for them. And if you’re not so convinced, here’s a story that might change your mind.When kids are given a savings boost early onIn 2011, a San Francisco program targeting low-income families put $50 deposits into 600 children’s bank accounts. Now, 12 years later, members of that cohort have an average savings balance of $1,422, which is about 28 times that initial deposit, reports the Wall Street Journal.Dubbed the Kindergarten to College Program, San Francisco’s initiative now gives $50 in savings to every student enrolled in its school districts and has 52,000 active enrollees with a total balance of $15 million. Of that, $10 million came from deposits made by students and their families.The program has a dual purpose: to teach smart financial habits and serve as a start to college savings. And so far, it’s been replicated in 39 states due to its success.Why it’s so important to help your kids save from a young ageKindergarten-aged children are obviously too young to hold down any sort of job or take responsibility for their finances. That’s where you, as a parent, come in.Those dollar bills your kids get from the Tooth Fairy? Your kids might enjoy stuffing them in a drawer and busting them out to go to the ice cream shop or candy store. But a much better thing to do for your children is to open a savings account for them and encourage them to keep their money in the bank.There’s apt to come a point in time when your children become financially independent. And having a savings account to tap as an emergency fund could make that transition much easier.Meanwhile, saving money in the bank at a young age will give your kids the opportunity to earn some interest on their deposits. Over time, that interest can add up, albeit modestly.These days, some savings accounts are paying very generously, but the rates we’re seeing at present are not the norm. A better bet is to assume that your child’s bank account might earn an average of 2% interest over time.Now, a single $50 deposit may not earn your children much interest. If you put $50 into an account at age 5, by age 18, that’ll grow to a rather unimpressive $65 if you’re only earning 2% a year. Rather, what you should try to do is open a savings account for your kids and push them to add to it as they receive cash gifts, whether from family members during the holidays or the magical fairy who rewards little ones for losing teeth.In fact, let’s say your child is able to deposit $100 a year into their savings between ages 5 and 18. At 2% interest, you’re looking at a balance of $1,400. That’s a nice emergency fund to take to college.Granted, in this case, most of that balance is coming from deposits, not interest. But the end result is the same — it’s a nice cushion.The right habits are just as important as actual moneyMaking small deposits into a savings account for your kids during their childhood won’t necessarily make them rich. But ideally, it’ll get them into the habit of putting money into savings. And that’s just as important as them having a decent-sized balance by age 18.One thing worth noting is that for college savings purposes, you don’t really want to stick to a regular savings account. You’re better off investing that money at what’ll hopefully be a higher return than what a bank account will pay you.But if you have young kids with money lying around their bedrooms, have them round it up. Then take them over to a local bank and let them be a part of the process of opening an account. If you get your children excited about the idea of saving money from a young age, then chances are, they’ll continue to uphold that habit for many years to come.
Do You Have a Bank of America Savings Account? Here’s Why You Should Switch
By: Lyle Daly |
Updated
– First published on Nov. 4, 2023
Even after a year, you’ll have less than $1 in earnings with Bank of America, compared to $404 with CIT. Over 10 years, sticking with Bank of America costs you over $5,000.Now, this is only an example, and it’s worth mentioning that interest rates on savings accounts fluctuate. CIT won’t offer a 5.05% APY for 10 years straight. That rate will go up and down depending on the federal funds rate. But it’s a safe bet that high-yield savings accounts like this one will consistently offer much more than Bank of America.Are there any downsides or risks with high-yield savings accounts?You might be wondering what the catch is with high-yield savings accounts. After all, there must be a reason why they offer so much more than big banks.The savings accounts that pay the most are typically offered by online banks. These are much smaller than big banks. Online banks can afford to pay more interest because they don’t have the overhead costs that come with operating bank branches throughout the country. They also need to offer higher interest rates to attract clients, whereas big banks with established customer bases don’t.Banking is different with online banks, but it’s just as safe. If you haven’t used an online bank before, here’s what you should know about it:Online banks can be FDIC insured just like big banks. FDIC insurance covers up to $250,000 per depositor, per account in the event of a bank failure. Quality online banks have this, and you can confirm if a bank is FDIC insured by checking its website or looking it up using the FDIC’s BankFind Suite tool.You won’t have access to physical bank branches. Brick-and-mortar banks can be more convenient, because you can visit in person to make deposits and withdrawals. With online banks, you do almost everything from your bank’s web platform or mobile app.You can get cash at ATMs in your bank’s network. Most online banks have ATM networks that their clients can use for fee-free withdrawals. Some have larger networks than others, so it’s worth checking what different online banks have available in your area.Online banks have fewer fees and other requirements. You can find online banks with no monthly fees or minimum balance requirements, including online banks with high APYs. Many brick-and-mortar banks charge a monthly maintenance fee that they waive if you complete certain requirements, such as maintaining a minimum balance.If you’re not sure about doing all your banking online, you can always have accounts at both a traditional bank and an online bank. You’ll still be able to bank in person this way at a brick-and-mortar bank. But for your savings, an online bank is a much better option.
3 Reasons Americans Can’t Stop Living Paycheck to Paycheck
By: Natasha Etzel |
Updated
– First published on Oct. 28, 2023
If you’re currently living paycheck to paycheck, please know that you’re not alone. Many Americans are struggling to afford everyday living costs. A 2023 study by SecureSave found 74% of Ameridans are now living paycheck to paycheck. It can be challenging to reach your financial goals when you have little money left over after paying all your bills.Keep reading to find out some of the reasons why Americans can’t stop living paycheck to paycheck.1. Rising living costsOne reason many Americans struggle financially is due to rising living costs. When everyday costs increase, it can have a significant impact on your personal finances.For many people, housing is their priciest expense. While rental costs have cooled recently, median rental prices nationwide remain high. According to data from Zumper, the national median price for a one-bedroom rental is $1,505, and it’s $1,862 for a two-bedroom rental.Average mortgage rates have pushed well above 7%, resulting in high housing costs for more recent home buyers. Rising rent and mortgage loan costs can make it difficult to escape the paycheck-to-paycheck lifestyle, especially for those in high-cost-of-living areas.2. Household debt continues to climbAnother reason Americans continue to live paycheck to paycheck is due to debt. Research from The Ascent found that total household debt in the U.S. continued to climb in 2023. Data from the Federal Reserve Bank of New York shows that household debt reached a record high of $17.1 trillion in the second quarter of 2023.Credit card debt is a costly debt that many Americans have. The above study also found that Americans had $1 trillion in credit card debt in the second quarter of 2023, up from $986 billion in the first quarter of the year. Credit card interest is expensive and can quickly get out of control. The more your credit card bills climb, the harder it is to get out of debt.3. Salaries aren’t keeping up with inflationMany Americans have seen little to no change in their income despite rising living costs. A recent poll from the Associated Press-NORC Center for Public Affairs Research discovered that two-thirds of U.S. adults have experienced rising household expenses over the last year, yet only one in four have seen their income increase.When you have no choice but to pay more for necessary costs like food, housing, and utilities, it can be challenging to get ahead financially — especially if your income stays the same. Many people continue to fall deeper into debt, which makes their financial situation worsen.For Americans struggling with rising living costs and salaries that aren’t keeping up with inflation, it may be worthwhile to consider applying for new jobs that offer more pay and better benefits. Another option is to negotiate a salary raise with a current employer. Finally, getting a part-time job or side hustle could allow you to boost your checking account balance.Small changes can make a big differenceIf you feel discouraged about your finances, don’t give up. While you may be struggling now, you can make improvements. Making small changes can make a big difference in the long run.It’s never too late to make small improvements. Getting a higher-paying job, paying off debt, and reworking your budget are ways to improve your financial situation.Setting a budget could allow you to reduce your spending to free up extra cash. If you need help budgeting, check out our list of the best budgeting apps. Many of these apps are free to use.
5 Affordable Luxury Finds You Can Buy at Costco
By: Chris Neiger |
Updated
– First published on Oct. 28, 2023
Shopping at Costco is all about finding great deals, but that doesn’t mean your purchases have to be low-quality or even cheap.We’re getting closer to the Christmas shopping season every day, and if you’re looking for some high-end gifts to give out without completely derailing your personal finances, you may want to consider some of these luxury items.While not cheap, here are five luxury items you can buy at Costco for under $500.1. Diamond stud earringsPrice: $429.99A couple of years ago, I ordered a pair of earrings for my wife online and opened up the box to get a good look at them before I wrapped them up, only to find that it was completely empty. It was the most expensive box I’ve ever bought.I didn’t buy the earrings from Costco, but the company has .33-carat weight diamond earrings that can be picked up at the Costco warehouse, potentially saving you the hassle I experienced. The 14kt white gold studs come with 26 near-colorless diamonds. Just be sure to check the box before you wrap it up.2. Osetra caviarPrice: $279.99If you’re planning to host a fancy holiday party, you may be able to do all of your shopping at Costco — caviar included. Costco sells a two-ounce set of Pacific Plaza golden Osetra caviar for just $280, making it a great luxury item to buy at a semi-affordable price.Costco says on its website that the facility that sells this caviar produces some of the “best amber gold Osetra the world has to offer” and that it will compare to the best caviar on the market.3. All-Clad 11-piece non-stick cookware setPrice: $429.99I’m not a good home cook, though I make a great fruit smoothie nearly every day. But if you’re a legit home chef on the lookout for some high-end non-stick pans, Costco could be your best bet.You can score an 11-piece set of All-Clad’s pots and pans made with heavy-gauge hard anodized aluminum for under $430.4. Citizen men’s atomic watchPrice: $399.99I’ve been thinking about getting a Casio calculator watch like the one I had when I was kid, but if your taste in watches is slightly classier than mine, then Costco has you covered. The company is selling the Citizen Eco-Drive Promaster Land atomic watch, which is powered by light, for just under $400.It’s no calculator watch, but considering that it has atomic timekeeping, synchronized time adjustment in 24 cities worldwide, and is water resistant to 200 meters, I guess it’s pretty cool, too.5. Authentic Wagyu Japanese A5 beef cubesPrice: $249.99Costco is known for its $1.50 hot dog meal, but if you want to take your beef quality just a few notches higher, the discount warehouse can help you with that purchase, too.Costco offers a three-pack of 16 authentic Wagyu Japanese A5 beef cubes wrapped in Applewood bacon for a cool $250. Wagyu beef is considered some of the best beef in the world, imported from Japan. It even comes with a certificate of authenticity, which I will demand for all of my meat purchases from now on.How to find the best deals at CostcoIf you’re not into shopping for luxury items at Costco and just want to save money, here are a few tips.Download the Costco app: The Costco app will not only make it easier to see what’s available in the store and online, but you can also click on the “Savings” link at the top of the app to see what deals are currently available.Check your mailbox: If you prefer the offline method, Costco mails out its Coupon Book every few weeks, showing some of the best in-store and online deals.Keep an eye on the gift card rack: Costco often sells gift cards that give you a lot of bang for your buck. For example, recent deals at Costco include discounts on airline gift cards, restaurants, and movie theaters.Whether you’re looking for luxury items or discount bulk items, Costco likely has what you’re looking for. And if you score the Wagyu Japanese A5 beef cubes, I’m free this weekend. I’ll bring a salad.
