Bennett Lending

I am not sure what finance was like when I was a child because of course I was pretty oblivious to my parents financial activities. But I can tell you the world of finance changes almost as quickly as technology and we really need to do all we can to stay informed and be prepared. Here is an informative post regarding technological changes and its impact on financial activities, may help you to stay informed.

The fact of the matter is social security – which most of us participate in – will not support us through our retirement.  We do not live in a time where we can plan for today and disregard tomorrow.  None of us will want to be 75 years old and homeless.  Social Security is meant as a supplement (or so they say nowadays) not a sole means of support.  We need to be proactive and plan for our own futures.

I had the eccentric uncle when I was younger who had this desire to fill a wheel barrel with $100 bills – like heaping full.  For some reason he felt that would make him happy and wealthy.  Well that was until he broadcast it so much that he was robbed and all of it was gone.  We all need to be more protective of our money.  Protect what we have and plan appropriately.

To be fair I still use a sort of envelope system – this system is what I use to pay for the needs of my horses and if anything else unforeseen comes up.  But the rest relies on banking and smart banking.

Our needs may differ from yours – but we all have needs that should be considered.  For us we have five children from 14 through 32 and as of last week – 5 grandchildren.  We have had college and will have college; bills; retirement; and special needs children who will be adults and need assistance.

The answer lies in banking – or many forms of banking.  Which is best?  Which is most appropriate?  Which are necessary?

Types of Accounts – Bennett Lending

Checking

I almost feel like it shouldn’t even be called a checking account anymore because I haven’t written a check in five years.  Nowadays we have debit, Apple Pay, Paypal, and so many other options.   I always recommend a checking account that doesn’t charge fees.  We all work hard for our money we don’t need to be wasting it on checking account fees.

But some checking accounts have different features and/or requirements.  For example my checking account has a keep the change feature where it rounds up all my spending and deposits the round up money into my savings account.  THEN at the end of the year if I don’t touch it – it matches my round ups!

Others may be online checking accounts that offer sizable incentives for account creation if you meet their criteria.  Definitely do not rule those out – almost everything nowadays can be managed simply on a cell phone.  Who needs to go to an actual bank!

Savings Account

Well this one is interesting and I have several – let me explain.  With the advent of direct deposit I don’t need to worry about moving my money all over the place.  I simply have it direct deposited into accounts wherever I want.  For me that means a savings account at the credit union – this allows me to get great benefits for other banking needs when the time arises.  Those funds I really don’t touch unless an emergency comes up.  A second savings account is for my money that moves a bit more – I use it for annual property taxes, timeshare fees and taxes and when necessary to help pay for the horses.  If you haven’t gotten this so far – horses are expensive… It’s all about the horses.  Have you tried opening a savings account lately?  You can’t just walk into a bank and say I’d like to open a savings account.  It seems like every institution has a menu of 20 options – it can be overwhelming.  But think about what is important to you – will you be depositing money every month?  Will you withdraw on a regular basis or leave it there long term?  If so, how often will you make withdrawals?  Will you carry a minimum balance?  Will you have direct deposit into it?  Will you go over a specific balance?  All these answers can make a difference as to what is the best product for you.  Sit down with a professional and work through what you have for needs and wants.

Retirement Plans – 401(k), 403(b) etc…

This is another option that can be taken directly from you check.  Once you get into the habit of not having it – it will be a godsend.  Just let that money come from your paycheck each pay period and accumulate into a nice healthy retirement figure.  The key (if you have options) is to choose the funds that are most appropriate for you at the level of risk you are willing to take.  Your funds will be invested while they work for you.  These have pretax benefits (reducing your tax liability) and are subject to the plans and federal limits and guidelines.  Some will even have a match option and once you are fully vested that can be a huge boost to your retirement income.  Other retirement plans include Roth IRA, Traditional IRA, 457 etc… What works best for your situation?  A combination of?  We have 403b plans and 457 plans – both through our employer.

Online Investment Banking

There are many varieties of this type of banking – I use Digit.co, StashInvest and Acorns.  They all work differently but in a manner that is sort of a forced achievable savings plan. I call these my save without trying bank accounts.

• Acorns – This is a round up and invest type of program.  I sign my debit card up as a round up account and I can choose to round up to $1, 2x, 3x etc… Then those funds are invested based on a level of risk I am willing to take.  I never even notice these funds leaving my account and they add up very quickly.
• Digit – Every day, Digit checks your spending habits and moves money from your checking account to your Digit account, if you can afford it. Easily withdraw your money any time.  Digit doesn’t withdraw from my account every day and it has algorithms that work to not take too much from your account.  And if for other reasons your checking account goes below a certain amount you have the option of setting up low balance protection.  Your savings is referred to a Rainy Day funds.  If low balance protection is activated, Digit will automatically transfer some of your Rainy Day funds back to your checking to keep you above the threshold you have designated.
• Stash Invest – This is another investment type account.  I have mine set up so it withdraws $50 from my checking account automatically every two weeks and invests it.  My investments are set up based on the level of risk I am willing to accept.  I started with a much smaller amount and believe me even $5 a week can quickly add up.

Loans – Bennett Lending

Most of us need a loan at some point in our lives – school, home, car, business, debt etc…  Every loan seems to be as different as the need that is being met.  Sometimes there is even a strategic reason to get a loan.  Always keep this in mind and this may be an account that works best for your needs.