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Checking & Savings
12. Don't get hung up on the numbers
Remember the old rule of thumb about banking: three to six months' income for emergencies?
"I really think we freak people out with
that number," says Tiffany. "It's just too big."
"It would be great to have that amount, but don't worry about the amount," she says. "Be more concerned about making savings a habit."
New rule of thumb: Whatever the amount, just start
saving it.
13. Climb the ladder
If you're using CDs for savings, consider laddering, says Tiffany. It's a way of making sure that, no matter the term of
your CDs, you'll have some cash available every year in case you need it.
How it works: If you have $5,000, you put $1,000 each in a one-year, two-year, three-year, four-year and five-year CDs.
After a year, you roll the one-year CD into a five-year CD. The second year you do the same when the two-year
CD comes due.
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"Over time, you get all of that money working for you at a five-year rate," she says. But at the same time, one CD will come due
every year, so you have a window of opportunity to access the money if you need it.
One caveat: Sometimes you can
find a rate that's as good (or nearly as good)
as a multi-year CD through a savings account
or money market account, especially online.
In that case, you have the flexibility of
having your money available on short notice,
along with the benefits of interest.
14. Take advantage of cool tools
A lot of banks are offering access to software programs that help you chart your expenses, plan savings and -- literally -- paint a picture of your financial situation, complete with charts and graphs, says Sherry. That can be a great way to stay on top of your finances.
"It's a cool way to see where your money goes, and it helps you plan," she says.
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