Money Musings 💭 My favorite high yield savings accounts 💸
This is the 250th Money Musing! 🥳
I started sending the Money Musing almost five years ago...
And over time your feedback has made them better and better. This newsletter continues to grow and evolve to this day. Thank you! 🙏
I’m really proud of what the Money Musing has become. I’m able to share my personal experiences around money, give you a money move to make progress each week, celebrate your money wins and highlight important money happenings.
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MONEY MOVE OF THE WEEK
MONEY SAVVY TRAVEL SERIES - #4 - START SAVING.
You have your list, your priorities and your travel budget, now it’s time to start saving!
I use a separate online savings account to set aside money for travel. You can find my list of criteria here and a list of my favorites here.
If you want some extra motivation and excitement, nickname the account with a reminder of the trip you are most excited about.
Then, work backwards. I start with the total. If I want to have $5,000 saved for travel for the next 12 months, I want to set aside $192 per paycheck (if I’m paid every 2 weeks). You can do this weekly or monthly as well!
Double check that the numbers work out. Because the timing of travel can vary, I like to check that I’d have enough for the first trip (and each remaining trip) if I stuck with my savings schedule. Sometimes, we’ll have to front-load some of our savings, and save more in the beginning, depending on when we need the funds.
Make the transfer automatic. Believe me, I know from experience. It’s easy to forget to make the transfers or by the time you realize, there’s not enough money left to transfer over. Setting up a transfer to your travel fund that’s automatic is a way to ensure it’s going to happen and you’re paying yourself first!
Use the funds and check-in. When it’s time to book the flight or use the funds, you transfer the money over from your travel fund. I also recommend checking in on your budget as you travel. Do you need to add more to your fund, do you have extra left over? This is something you can adjust and update as the year goes on.
Okay, now you’re ready! Reply with any questions you have and bon voyage!
YOU GOTTA SEE THIS
DEFINE: ROTH VS. TRADITIONAL 401(K).
A common question I get is “What’s the difference between a Roth and Traditional IRA and which is the best for me?” But to make matters more complicated, more and more companies are giving employees the choice between a Roth and Traditional 401(k).
The good news is that there are a lot of similarities but also some important differences. Here’s the breakdown.
DEFINE: IRA vs. 401(k). IRA’s (individual retirement accounts) and 401(k)s are both tax-advantaged retirement plans. You can open an IRA on your own but your employer would have to offer a 401(k) unless you own your own business.
The two biggest differences between them? The contribution limits. The maximum you can contribute per year in 2023 to an IRA is $6,500 and for a 401(k) it’s $22,500 (more if you are 50 or older). And the investment options. You can invest in whatever you want with your IRA and a 401(k) has specific investment options to choose from (sometimes more than others).
DEFINE: ROTH vs. TRADITIONAL. In a traditional account, you contribute the funds pre-tax, they grow tax free and then you pay taxes when you take the money out. This is generally advantageous if you think your income tax rate will be lower in retirement than they are now. With a Roth account, you contribute the funds after tax, they grow tax free and you don’t pay taxes when you take the money out.
Now there are more specific differences as far as what happens when you take the money out. Here’s a breakdown.
Other “fun” facts.
There are minimum distribution requirements for a Roth 401(k) and not a Roth IRA. Meaning, you will be required to start taking a certain amount of money out by age 72 unless you roll it into a Roth IRA.
For both accounts, you can take penalty-free distributions once you are 59 ½, become disabled or if you pass away. With the Roth IRA you can also take out up to $10,000 for a first-time home purchase. With the Roth IRA, all contributions can be taken out tax and penalty free.
MY TRAVEL JOURNEY
SAVVY-ISH PACKING.
We’re getting down to the wire of our big trip and that means I’m thinking about packing. 🧳 I’m the kind of person who always forgets something even when I have an organized list so I take packing pretty seriously. I also want to manage the potentially tremendous amount of stuff we could be traveling with.
Here’s how I think about it:
Everyone is bringing less than a week's worth of clothes and that's it. We will be staying in homes that have washing machines so we can do laundry each week.
For things that run out, we're not packing a supply for the entire trip. Buying things like diapers, sunscreen, soap, toothpaste, etc. will be part of our world as locals. This definitely lightens the load!
Kids carry their own backpacks. 🎒 This is a newbie for us and it has made a big difference. Kids have their own snacks and toys at the ready so we don’t have to overstuff the diaper bag.
We’re bringing a travel stroller and kickstand for the days where we’re going to be exploring long distances.
I was very tempted to bring the kids’ scooters and helmets but the helmets are quite bulky AND I get a tidbit nervous thinking about them scooting across busy streets. I might regret this later.
I'm packing a mini duffle in case we do some shopping and need extra room.
It looks like we're getting away with 2 suitcases (1 to check and 1 carry-on size) plus the diaper bag, backpacks, stroller, travel carseats and my purse. Not too shabby! 🤪
your weekly money wins
Here are all the amazing money moves you made this week 👏👏👏
Ari B: Investing 10% of my earnings
Jessica S: Entered escrow on our first house 🙈
Ali D: Does it count if I called Wayfair to replace my stolen $500 TV stand? (They did!)
Tania R: Reached an agreement with my clients that allows me to get a maternal break when baby is born
Jess: Signed paperwork - I'll be a working girl in a few days! Same pay as previous but with a ton of bennis
Ari: Was able to pay for childcare this month
Kirsten W: Got my loan forgiveness for 10 yrs in public service! ($120K in student loans, $10K repayment). ❤️ my job!
Gabi A: Finally hit $20K in my Roth!
Margaret M: Only 500 left to pay down on my first credit card of two! The end of the tunnel is in sight
Lauren: Was able to contribute $2K to my emergency fund (prior to impending layoff in August)