What is the Best Way to Save Money?
Doing Well
Gone are the days where everyone tells you to save your money in a bank account. The traditional savings account has fallen out of favor because interest rates have dropped so low. My bank is paying less than 1% interest on its savings acounts. So you might think, why bother saving money?
If you've looked for high-interest savings accounts, you may have been put off by their requirements. Fox News is tellingn everyone to turn to high-yield savings accounts. If you don't have thousands of dollars you can keep in the bank you may be wondering what other options you have.
Companies like Bankrate still tell people to open a traditional savings account, too. But even though they give good reasons to save money, their arguments aren't very interesting. The best reason to open a savings account is that it is insured. If your bank fails your balance will be protected.
Anyone who struggles to make ends meet has a hard time saving money. It's doubly hard when all the savings advice you find online either assumes you don't exist or talks down to you like someone who has no common sense. How many articles have you read that say you should stop buying expensive coffees at Starbucks? Like I even drink coffee!
There are some good tips in this Bogo Blogo article but when I get a tax refund I almost always need it to pay off a loan. I wish I could get more tax money back.
The I.R.S. gives some people Earned Income Tax Credits but I never qualify. I guess that makes me lucky, doesn't it?
A few years back I decided to get serious about saving money. I found this site called Making Money with Joe that explains neat ways to save money. It's not the perfect solution for me. I try to follow the site's advice but it's hard to wait for groceries to go on sale.
Okay, that's everyone else's ideas for saving money. What is my big idea?
Well, it's not really my idea. But I read about Robinhood and how you can buy and sell stocks for almost no money. You can deposit $10 in your Robinhood account. All you need is a bank account.
Once the money is there you leave it alone. But if you see a good stock you want to buy, Robinhood lets you buy just a part of a share.
But what about the interest? Well, if you buy shares in a mutual fund they'll pay you interest. Or you can buy shares that pay dividends. They'll pay you better than a savings account interest.
Robinhood also has a debit card program. So you can sell your stock at any time and spend money off your Robinhood debit card. That's more like an interest-paying checking account, if you ask me.
Any fool can tell you that you need to leave your money in the stock market to make it grow. But if you want to grow your money and still spend it when you have an emergency, Robinhood sounds like a pretty good deal.
The only problem I see is that Robinhood doesn't insure your deposits. If they go under you'll lose your money. But it doesn't look like Robinhood is about to go out of business.