Bank – My Investing Discoveries

To Think or Not to Think: The Financial Question

I hope you are all enjoying some crisp fall weather, wherever you are.

With my latest quarterly net worth check-in, I discovered that I have nearly doubled my net worth in the three years since I started tracking my progress! The beauty of compounding is at play here: The more money I have invested that is making me money, the more money it continues to make. It’s that simple!

Other than that, I want to update you on what I have been thinking about vs. what I have been (choosing) not to think about when it comes to my money lately. This is sometimes by design, as a behavioral finance trick. Each link in this list will take you to a category of articles on this blog for you to explore further.

Bank accounts—I think about them weekly, but don’t always check them that often. My checking account and regular savings account are my most visited; my two high-yield savings accounts are reviewed quarterly for my net worth update, and are regularly invested in whenever I have savings from a biweekly paycheck ✅
Budget—I don’t think about it as much as I used to; I have regular payments that aren’t accounted for in my budget ❌
Credit cards—I think about them a lot, sometimes multiple times per week. This is the primary focus of my finances: What am I spending and—when it comes time to pay the bill—how much do I owe? This is also a good way to prevent fraud, but your credit providers should be alerting you to any unusual activity ✅
Investments—I don’t think about them, but I check my Charles Schwab brokerage account periodically during market shifts (thanks for the heads up, AAII!) and review them for performance and potential deletions twice per year ✅
Retirement accounts—I don’t think about them because I check my progress quarterly, I have a system in place ✅

The aspects of my personal finance that regularly haunt me are my bank accounts and credit cards. These are top of mind since I handle them on a short-term basis, whereas my investments and retirement accounts are for the long term. The one area I need to improve is my budget, hence the “x” instead of the checkmark. At this point, it’s next year’s problem!

The state of my retirement accounts

My retirement accounts are doing well, especially when I don’t think about them! I still have my first 403(b) plan account with Vanguard from AAII, and it remains invested in the mutual funds I chose at the start of my retirement savings journey. My second retirement account is with Fidelity from my current job at Red Ventures. It’s a straight up 401(k), so now I have a fun collection of all these letters and numbers!

I’m actively contributing 5% of my salary to my Fidelity account on a biweekly pretax basis, meaning the money comes out of my paycheck before I even get to see it. Meanwhile, with my employer matching most of that contribution, I’m sitting on nearly $6,500 after over a year of steady contributions and positive returns!

I invested my Fidelity account in these mutual funds that were available to me, using the same weights I applied to similar funds in my Vanguard account: 30% invested in the T. Rowe Price Large-Cap Growth fund (TRLGX), 20% in the Fidelity Mid Cap Index fund (FSMDX), 20% in the Fidelity Small Cap Index fund (FSSNX), 20% in Emerging Markets II (ticker not listed) and 10% in the Principal Real Estate Securities Fund Class R6 (PFRSX).

When I invested in these funds back in fall 2024, two of them had higher expense ratios than I would like for my investments: the real estate fund’s was 0.81%, and the large-cap growth fund’s was 0.70%. My investing strategy is to find mutual funds or exchange-traded funds (ETFs) with expense ratios under 0.60%, otherwise we’re getting dangerously close to 1%, which is way too much to be giving any fund or money manager. Thankfully, the large-cap growth fund’s expense ratio has since decreased to 0.55%.

My petsitting venture

This year, I started petsitting cats and dogs. It took off when I started networking through the dogs, finding more animal friends to hang out with. My closest human friends also have some of the cutest cats ever, so I can’t resist spending scheduled time with them when they are required to pay attention to me 😂.

So far this year, I have made over $1,600 from this venture! Since I haven’t been as regular with saving this year as I would like, at the end of 2025 I plan to match the amount I’ve made from petsitting and move it into my emergency savings account.

When I initially drew up my rules for this savings account, I wanted to keep $10,000 in it at all times. However, I’ve learned since that I don’t really need that much money available, even for emergencies. I settled on maintaining my emergency savings at $7,000. In the current market environment, it makes more sense to keep money in my high-yield savings accounts so they can make more than the measly 0.01% interest my emergency savings will.

Some other financial decisions I made since we last talked:

I signed a two-year lease for my current apartment so I could lock in the increased rate of $1,450/mo. for the next two years to save myself another $50/mo. increase down the line
I chose my health insurance plan for 2026, and went with the lowest tier for around $30 per paycheck

I’ll be back in early 2026 for another portfolio review! Wishing you all a wonderful and safe holiday season.

More articles on rethinking retirement:
Retiring Early: Memoir or Fiction?
Should Young People Still Save for Retirement?
How Much Should I Contribute to My Retirement Account?

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Back to Investing Basics: On the Road Again

For the August 2023 issue of the AAII Journal, I revived the Beginning Investor column with the article “Starting on the Road to Investing.” If you’ve been following along with me but haven’t started investing, I hope the article serves as a helpful distillation of what I’ve learned about my own finances so far!

Writing the article forced me to go back to basics and determine how each stop on the road to investing built the foundation for the next one. My investing journey was nowhere near as linear as the article’s order suggests, and yours doesn’t have to look perfectly tidy for you to start now.

I discuss each step, the tools required and the difficulty level below, along with my own experiences. Each section has a link that will take you to my first blog post on the topic. None of these are destinations, but ongoing processes you’ll have to revisit as you make progress.

Tools required: Pen, paper, computer

Creating a budget, though I long dreaded it, is an easy place to start. Not everyone has a budget or sticks to it, but it helped me demystify where my money was going and how much I truly had to play with. It also doesn’t require you to speak to a professional, unless you really want to, so this is a step that can be taken entirely on your own or with your partner. When I first started budgeting using the percentage budget, it was a huge relief to know that my fixed expenses were less than 50% of my monthly income. If I hadn’t started a budget, I would still be living in the dark, not understanding how much I was spending until it came time to pay the bills.

Tools required: Computer, savings account, discipline, time

Building up my emergency savings fund was the first thing I did when I graduated college and started working. Before I even heard the adage “pay yourself first,” I was saving as much as I could in a kind of competition with myself. (I’m not usually competitive, but I guess my worst enemy is myself!) Whenever I wasn’t spending money at Sephora was a good time to slide some of my leftovers into savings. Your emergency savings fund should have three to six months of living expenses—for the good, the bad and the fun things you’ll need it for in the short term.

Tools required: Computer, government-issued ID, Social Security number

I can’t tell you much about opening my regular savings account, but I believe it was done in person at an actual bank. This isn’t necessary, but if you’re unsure about opening a savings account, there are professionals who can help you virtually as well. When I opened my high-yield savings accounts, it was simpler than I thought it would be, but required a lot of front-end research on my part to find the right account for what I wanted to do with my savings. Interest rates are still increasing, so this is a great time to shop around for savings accounts with higher yields than your regular bank savings account, if you have one.

Tools required: Computer, materials from your employer, your budget, some mutual fund knowledge

Starting to invest in my retirement account wasn’t just hard logistically, it was also a very difficult decision to cough up the money from my paycheck. My employer-sponsored 403(b) account was eligible for contributions when I filled out the paperwork and chose which mutual funds to invest in. Except I made all those decisions without factoring in my own contribution. I couldn’t afford to live and save for retirement at the same time, so I put it off. When I created that budget I was talking about, I realized I could finally make it work.

Tools required: Cold hard facts, your budget

Only you can determine how much you need to start investing, based on what you decide to invest in and what you have available to spare. You could start with $5 if that’s all you have, but it would limit you to fractional shares or very small stocks. If you have $1,000, you could potentially invest in a mutual fund or a few exchange-traded funds (ETFs).

First and foremost, you have to invest in yourself, which means building up your savings and thereby your net worth. When you have your financial foundation of savings, any excess can be allocated to your investments and other goals. You can do hard things! Go forth, invest!

Setting High-Yield Savings Goals

Last time I updated you on my high-yield savings accounts, interest rates were going up and so were my savings. Since then, my LendingClub account has increased the interest rate on my savings three more times!

Back in June, LendingClub raised my rate to a 1.05% annual percentage yield (APY). By the end of June, it was 1.26%, and at the start of August it went up to 2.07%. A few days ago on September 21, it went up to 2.25%. According to LendingClub, this is 13 times the national average savings account yield. When the interest rate was 2.07% at the beginning of August, I decided to transfer more money into the account. Through the end of August (September’s interest doesn’t hit until the end of the month), I had made almost $30 on my savings since I opened the account in March 2022!

My LendingClub account is designated for a future down payment on a house, so it’s a longer-term goal that I have more funds allocated to. My other high-yield savings account with SmartyPig is for saving money before it is invested.

Though I haven’t been contacted about the interest rate going up on my SmartyPig account, it has increased from 0.75% in June to 2.05% in September. Not too shabby! When I signed up for SmartyPig, one of its offerings was the ability to set savings goals. What I didn’t realize is that the interest rate is higher when I designate funds for a specific goal—2.25% (same as my LendingClub account)!

So, I set up my first official savings goal with SmartyPig, which is to have $2,000 ready to invest by the start of 2023. When I began investing in March 2022, that was my Schwab account’s starting balance. At that point, it was all I was willing to part with; I knew I should only be investing money I was comfortable losing. Since then, my threshold for losing money has increased (since the market has been down for most of this year). However, I also know that I’m in my investments for the long term, so the short-term ups and downs aren’t crucial to my end goal. Maybe 2023 will be a better year if people stop saying the world “recession”—don’t let the market hear you!

I’ll keep you updated on how this savings goal goes and when I solidify a better plan for transferring my savings to all of their different homes on a more regular basis. Half the battle is just figuring out what works for me and my money, the rest should be relatively easy (fingers crossed!).

High-Yield Savings Accounts: Where Are They Now?

While I may not be making money in my investments right now, my high-yield savings accounts are making me more than I’ve made in years on my savings!

The market is down. Even if you’re not in the market, I’m sure you heard. But I’ve been trained well by AAII; I’m not scared by the red numbers on my Schwab account. In fact, I’ve made friends with them! We’re getting brunch on Sunday since the market is closed.

You might also be hearing about interest rates lately, and the possibility of them being raised. One of my savings accounts just raised my interest rate! It was an email I actually wanted to see from an institution I keep my money with. My high-yield savings account with LendingClub is now yielding 1.05% per year, up from 0.65% when I opened my account. LendingClub also noted that there is no minimum balance for my account (before it was $2,500). This makes me excited to see what this account can do for me; it’s already made a whopping $6.44 since the end of March (compared to $0.13 a month on my regular savings account, we’re living like kings).

I recall Erin Lowry saying 1.05% is the best rate on the market in “Broke Millennial,” so I feel like I lucked out with LendingClub. But Lowry also says, “Online banks will routinely fiddle around with the APY on savings accounts. One month it’s 1.05 percent APY, and two months later it drops to 0.75 percent. It’s actually within the bank’s right to do this—but that doesn’t mean you should hang tight at your measly 0.01 percent rate with your current bank because another bank might change from 1.00 percent APY to something a little bit lower. Because 0.75 percent still crushes 0.01 percent.” It’s good to know that my interest rate might not stay at 1.05% forever, especially since interest rates are fluctuating in other areas of the economy.

So with this higher interest rate, I should probably add more money to my LendingClub savings account to take advantage of it! My other high-yield savings account with SmartyPig is also doing well, and I’ll be adding more money to it soon to make the most of the 0.75% yield.

If you want to know more about interest rates, AAII’s financial writers and guest writers all have much smarter things to say than I do—I’m still recovering from high school trigonometry.

Opening High-Yield Savings Accounts

Last time I wrote about savings accounts, I asked my Instagram followers if they knew the interest rate on their savings accounts. I gave them four options: 1) Yes, but it sucks; 2) Yes, it’s actually making me money!; 3) No; and 4) I don’t have a savings account.

I got 15 responses: Three of my friends said they know their interest rate, but it sucks; six said they don’t know the interest rate; and six don’t have a savings account. I would say most of my followers fall between the ages of 20 and 40, and some of those without savings accounts are either younger than me or not working full-time yet.

However, no one selected, “Yes, it’s actually making me money!” This didn’t surprise me, but it motivated me to continue my research and finally open some high-yield savings accounts.

First, I revisited SmartyPig, which still offers a 0.70% annual percentage yield (APY), or interest rate, on my savings. This account will let me save up to $10,000 at this high interest rate, but once I have more than that the APY drops to 0.45%. I decided to call this my “grower not shower” savings account, where I’ll put money before investing it so that I can make the most of it before its intended purpose.

Signing up for a SmartyPig account was easy, it just required my name, address, Social Security number and creating some security questions. At some point I was asked if I had lived at my current address for more than two years. When I said no, I was asked to also enter my previous address. Once I read the disclaimers, I was able to manually connect my current bank savings account to make a transfer.

Then I wanted to look at some high-yield options that gave me more flexibility with my savings. LendingClub now offers a 0.65% APY, higher than it was when I last looked into it! The only restriction is that I must have at least $2,500 in the account. I’m calling this one my “movin’ on up” savings account where I’ll be putting funds to save up for buying a place in the future!

Opening an account with LendingClub was slightly different than SmartyPig. I was asked to create a security phrase, and I was able to connect my bank automatically using Plaid. From there, I could designate which account I wanted to connect and choose the amount I wanted to transfer. There were many disclosures to read, but most didn’t apply to the high-yield savings account I was opening and were instead about LendingClub’s other banking and card offers.

I decided to open two different high-yield savings accounts so that I can maximize the yields across both, and because I want to keep my savings goals separate as Bola Sokunbi explained in “Clever Girl Finance.” For now I’m keeping my regular savings account with my bank, designating it for emergency savings.

I’ll keep you updated on how my plan goes, and as it changes along the way!

What Is the Purpose of a Savings Account?

In previous blog posts I described myself as a big saver, but I wasn’t much of one before I got my savings account. I opened my savings account back in 2016 after I graduated from college. I was working consistently and paying off my student loans, but my parents encouraged me to put money into my savings account because if I kept it in my checking account I was just going to spend it!

Savings accounts are basically your bank paying you to keep your money with it. I think of my savings account as a place to hold money before its intended use. The average savings account today has a 0.06% interest rate, meaning the money in your savings account will appreciate by that percentage over one year. It’s definitely not a place for my money to grow—I’m making $0.14 per month at most on my savings. Rather, it’s a place to accumulate money until it’s time for it to shine and fulfill one of my goals.

I learned from Bola Sokunbi in her book “Clever Girl Finance” that psychologically it’s better to separate savings for different goals into their own savings accounts to not only avoid confusion but to not feel that you’re being set back on your other goals when you need something for one specific goal. Right now I have money to be invested and my emergency savings in the same account, but they should really be in separate places so I can see my goals clearer. Thankfully they soon will be, but I also want to look into a high-yield savings account, which I learned about while dissecting Carrie Bradshaw’s financial situation.

First, it’s important to make sure that any bank you’re putting your money in is insured by the Federal Deposit Insurance Corp. (FDIC). This means that your money will be safe should the bank go under. You can check if a bank is FDIC insured here.

After some researching and reading reviews, I found a few candidates for my future high-yield savings account: Sallie Mae’s SmartyPig, Axos Bank, LendingClub and Discover. SmartyPig offers a 0.70% annual percentage yield (APY) or interest rate on my savings, but the caveat for this higher yield is that it only applies to amounts under $10,000. Once you have more than $10,000 in your SmartyPig account, the APY falls to 0.45%. Axos Bank can give you 0.61% per year up to $24,999, but after you hit $25,000 the APY is much lower at 0.25% and goes down to 0.15% on more than $100,000. LendingClub offers 0.60% APY for balances of $2,500 or more. Through AAII’s partnership with Discover, you can get 0.55% APY without any restrictions or minimums (this is higher than what you can get through Discover without being an AAII member). These are all high yields with good options—I would just have to decide which option fits each goal. Maybe I’ll end up having more than one high-yield savings account to maximize the interest rates for the amount of money I want to save.

On the topic of how much you should have in a savings account, I recall many years ago when someone told me that they couldn’t believe a person they knew had more than $100,000 in their savings account. I knew that having too much in a savings account was as bad as not having enough—the opportunity cost of not growing all of that money in investments outweighed having all of that money stowed away, and in a manner akin to stuffing cash under your mattress!

I will be revisiting this high-yield savings account research when I open one in the near future, so stick around for more of my investing discoveries!