I have a Dilemma…NEED Guidance!

Posted: May 9, 2013 in Financial Organization
Tags: , , ,

For those who have been reading along, you know that we have somewhere around $100 parked in between my piggy bank at work and in my drawer at home; so my dilemma is this: I want to put it into an account where it’s going to collect interest, ok easy enough, find a bank with a reasonable deposit-only interest rate and go from there – BUT here’s my dilemma – I have (2) existing savings accounts with Bank of America, but neither of which yields interest, they are straight savings accounts – who also happens to have the best deposit-only rates I’ve seen – and we also have a Merrill Lynch Mutual Bond account that has about $90.00 in it and is only in cash at present because I have ZERO Clue what to do from here….what to do? What to do?

Taking suggestions here?  I am not 100% comfortable having that much extra cash laying around, while I am very pleased that we have this saved up, and yes it’s taken quite a bit of time to accumulate, I am happy its here, but I’d feel much better if it were parked in an interest-bearing account making money vs. just sitting there so then perhaps I can figure out what my goals for that cash will be. Ideally it would be for that emergency cushion we’re always being preached we should have, therefore, I know we should have at LEAST (2) months salary saved for emergencies, ok so that would be about $6,868.78 (taking the sum total of our paychecks from the last four weeks each and adding them together then multiplying by two) – which will be easier to reach if said funds were making money in interest.


I need to figure out what to do with this cash I have sitting around – do I dump it into one of our existing accounts? Or do I open yet a 3rd savings account with BoA.


I need to figure out what to do with the $90.00 I have sitting in the Merrill Account – this account is supposed to be for our retirement as neither of us has a 401K…


  1. Simply Money says:

    First of all, is there a balance in either of the two Bank of America accounts? If not, I would suggest closing one and leaving one open. Simplify things! I would use one of your existing accounts for the $100 because:
    1. If you plan to use this money for emergencies, you need easy access to it.
    2. With the average interest rates right now, the amount you will make on the $100 will not be enough at this point to justify the time and effort to open a new account.

    Now, you also mentioned building an emergency fund, which I agree is VERY important. The $100 should be the start to this fund. If there is no penalty to combine the $90 from the Meryl Lynch account, add it together to start an ER fund of $190. I understand where you are coming from with trying to start a retirement account. I was in the same boat, BUT if you have many small pots, and you are stretching to fill each, it will take more time and frustration than you can handle. Start with one pot: emergency fund. After you have a small emergency fund built (maybe $500), than move on to your next pot: debt reduction, saving for upcoming expenses, etc.

    Make a list of what you are trying to accomplish, then as each goal is reached, physically mark that item off on your list. When you see your progress, it gives you the energy to keep going!

    • ncreadergirl says:

      Yes both accounts have a balance, albeit one of them is very small, Bank of America has their Keep the Change program where they take every dollar spent via debit card and round it up to the next dollar and take that difference and transfer it to a savings account of your choosing, i.e. I spent $3.52 at McDonald’s, they take that and round it up to $4.00 and then transfer the difference ($.00 – $3.52 = $0.48) to a dedicated savings account we’ve established – now that generally stays small as it takes considerable time to build it up as we don’t use our debit cards but every so often now, we used to use them all the time, not so much anymore. That being said, our other one has the $725.00 we’ve saved for a down payment on a new car to be purchased next month, we’re still dumping money in there in hopes to build that up to about $750.00. I’ve thought about taking this $110.00 (I just dumped another $13.00 into the pot this morning, this money comes from whatever is left after our weekly lump sum cash withdrawals on Fridays, so this is extra funds that we either over budgeted for or had to round up from a 1/2 amount to a whole $20.00 amt for the ATM) and adding it to the Merrill Lynch account and finding a way to buy bonds to help build that up. BUT then I won’t be then building the ER Account I so long to have (see the problem – we need a retirement account, but don’t have access to ones through work) – if I add it to the $725.00 we could feasibly hold onto that account and make it the savings account the KTC funds go to and then have it for future EF Funds deposits.

      Does that make sense?

      Right now the goals are simple – build the EF and Retirement accounts, the debt portion of our lives is being worked on with our mortgage in the balance with Citi until the restructure is done, once complete we can re-work things financially to stay on top of it and the other bills.

      • Simply Money says:

        Ok, got it. I understand your logic behind having the separate account for the car fund, and you are making the right move to save towards the car since you know the expense is coming soon. I would say it really doesn’t matter if you put the extra $100 into the car fund or into the ER fund. If the car expense is coming sooner rather than later, you may want to add it to the pot. If you think you’ve got a while longer before the car, you can stash it in the ER fund.

        My husband was self-employed and didn’t start saving for retirement until later than normal (and same boat as you, no employer sponsored plan for about 15 years) so we too needed to play catch-up. My thought process was to build an emergency fund, pay of any and all debt (except our mortgage), then start saving for retirement.

        This plan worked for us. We held off on putting extra into retirement for almost 2 years, but then suddenly we were able to put a large chunk in every month and the account balance has snowballed over the past few years.

  2. ncreadergirl says:

    The more I’ve thought about it, the more I want to consolidate the two existing (and separate) savings accounts into one, and try to see if the bank will allow us to either close it and re-open it as an interest-bearing account, or find a way to change the type of account it is. This will streamline everything on that end – I’ve also considered splitting the cash savings I have on hand and putting 1/2 into the Car/ER Fund and the other 1/2 to the Merrill Account, though not entirely decided on that yet.

    Thanks for letting me talk this out!

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