Money Musings 💭 New Year, New Bank 🥂
It might be time to break up with your bank.
If your bank pays you little or no interest, charges you fees and doesn’t align with your values (i.e. funds fossil fuels or private prisons), you can do better.
Find a better bank (I promise, there are other fish in the sea), open an account, and test the waters.
If it feels scary, drastic or like too much work to drop your current bank completely, that’s okay. You can slowly phase them out.
As you build a relationship with your new bank (and they treat you better), you’ll want to use your old bank less and less.
Back in August, I told you about a checking account that fits the bill. Many of you joined the waitlist and have been patiently (or impatiently waiting) for access.
A REFRESHER: OnJuno is a new online bank whose mission is to make banking fair and transparent (you know I love that! 👏) and is offering the Fiscal Femme community special access to a new online checking account that earns a 2.15% bonus rate and will charge you absolutely no hidden fees (minimum balance, overdraft, and service fees).
Users also receive 5% cash back on 5 brands of their choosing and the account is FDIC insured up to $250K.
GREAT NEWS: The OnJuno account is now live. You now have access to all of those amazing features and benefits. They also just dropped their launch video (😂 you will LOL).
Their “Metal” account comes with 6x more benefits and is free if you connect a direct deposit for the first 6 months. After 6 months, you will automatically switch to the free account unless you CHOOSE to continue with Metal.
There are limited spots available.
MONEY MOVE OF THE WEEK
Decide when to use your rainy day fund. 2020 put the rainy day fund ☔️ in the spotlight. We always knew that having cash on hand for emergencies was important but with the recession and so many of us experiencing losses in income, it became even more important and urgent. Many of us have spent so much time focusing on building our rainy day funds that we were surprised to find we had a lot of questions about how to actually use it. 🤔
What constitutes an emergency? Why does it feel so darn painful to pull from it even though that’s what it’s there for? Take some time to map out 🗺 what you would use your rainy day fund for, if needed. Is it specifically to cover lost income, unexpected medical bills or time you have to take off work? You may also want to lay out what it’s not for. Maybe in the past you’ve used your rainy day fund to cover an unplanned vacation. 🏝 How will you handle less urgent things that come up in the future?
YOU GOTTA SEE THIS
Define: TRADITIONAL VS ROTH.
I’m frequently asked about the difference between a Traditional and Roth IRA. The biggest difference is the tax treatment. Roths are funded with post-tax dollars and Traditional accounts are funded with pre-tax dollars.
Fun fact: There is no difference between the amount of money you’ll have in a Traditional vs. a Roth account if your tax rate is the same when you contribute the money as it is when you take the money out.
Another fun fact: We have until the tax deadline (April 15th 2021) to max out our Individual Retirement Accounts (IRAs) but typically only until year-end to contribute to our 401(k)s. You have a few weeks left to up your 401(k) contributions and minimize your tax bill!
Use it in a sentence: “Roth accounts are best for those who believe their tax rate will be higher in retirement because they will be earning more when they reach retirement age than they are now.” 💰