Saturday, August 8, 2015

Why Are You Saving Money Anyway?

In picking investments, I believe it is important to keep your goals in mind.  While most of us would define our goal as "retirement", even those of us in our 50's and 60's have other goals as well.  Here is a description of my financial accounts, why I have them and what I expect to achieve:

Checking Account:

Used with Permission
This pays the bills day in and day out.  It is a no-fee account at a local bank where my family has five accounts.  While it pays a smidgen of interest my only real expectation from this account is that it doesn't cost me money.  If it get "too big" (a problem we haven't had in a while) the excess is transferred to a savings account. We do not run this account down every month and rarely to we have a routine expense (and I call replacing appliances and fixing cars routine expenses) that cannot be paid from this account.

Savings Account:

This is at the bank too, and while it pays more than the checking account does, the money is here for safety and accessibility.  This is where our next car is kept.  It is where the rest of the money for our bathroom renovations is sitting.  We are dollar-cost averaging some money from my inheritance into our Roth IRAs, and that money is in this account.  It is as close to an emergency fund as we have.

Peer-to-Peer Lending Accounts:

Our goals for these two accounts (I have one with Lending Club and one with Prosper) are both liquidity and growth.  We started with Lending Club about a year ago with a small investment to "kick the tires" and you can read some post I wrote about it.  To some extent, I am still "kicking the tires", trying different strategies to determine the results.  At one point I bought a bunch of notes with relatively few payments left, with a goal of getting some interest (I aimed for about 6%) with high monthly turnover of funds.  I figured that if we needed money, the payments could be withdrawn, and if not, they could be reinvested, but that the account would earn more than the bank pays.  Yes, there is more risk but so far I've had very few resale noted default as compared to those bought new.  In short, I am hoping to make money on these accounts, but I believe they are more stable than the stock market as a place to put money I may need in the next couple of years, though not immediately. If you want to invest $10,000 or more, use this link and get a bonus $50.00.


Right now, this is my financial toy.  I have $1,000 invested and the plan is to invest another $100 per month for the next year, and then re-evaluate its place in our financial future.  Kickfurther crowd-funds inventory purchases for small businesses.  Once the inventory sells, investors are paid back their investment, plus an agreed-upon percentage, whether that payback takes more or less time than anticipated.  The risk of course is that the inventory doesn't sell.  The risk is mitigated by the fact that the investors own the inventory, and if the vendors do not sell it, the investors decide as a group what to do with the inventory. Backers are also offered to opportunity to help sell the products for a commission. Here is one I'm backing and helping to sell:
Click here to go to my store to purchase
  Kickfurther is new and I have no idea what the default risk will turn out to be.  Returns vary depending on product and term but seem to be averaging about 1.5% per expected month until full payback. If this pans out, it could be a great place for both growth and liquidity as companies pay investors monthly.  The real question is what returns can the platform maintain and keep the supply of businesses and lenders in balance.  If you'd like to trying investing with Kickfurther, the minimum investment is $20.00 and if you use this link, you get a $5.00 credit, so your first investment could have quite an upside.  Also, if you have a business that sells a tangible product (as opposed to a service or intellectual property) you can use this link to see if Kickfurther makes sense for you.  According to things I've read, their rates are lower than On Deck or Kabbage.

Tax-Advantaged Retirement Accounts:

Our IRA's, Roth IRA's and 401(k)s are in this category.  They are invested in a diversified portfolio of mutual funds appropriate to our age and risk tolerance.  The goal is long-term growth moving toward income/stability in a few years.  We invest regularly in these accounts via payroll deductions and they are the bulk of our assets.  While some of the funds generate dividends, they are not our focus.  This is the money we expect to support us in our old age and to help support my son, who has autism, after we are gone.  Right now this money is about 80% in stock funds; about 20% in bond funds, but we will need to move to a more conservative allocation soon (my husband is 59, I am 54).

Motif Investing:

I only invested $5,000 in a variety of stocks, split between those oriented toward growth and those that pay dividends.  This is as much toy as investment right now, but it is interesting to see how my picks work out.  I wrote about Motif Investing here, and if you want to try it, click this link; we'll both get $100.00 if you invest via this link.

What type of investments to you have and why?

*Part of Financially Savvy Saturdays on brokeGIRLrich, GoldBean Blog and Debt Free Divas*

Also linked to Final Friday Finance


  1. I keep my savings accounts subdivided into multiple accounts for each goal - one for emergency savings, one for a down payment, one for a future car, etc. It helps me make sure I'm on top of each goal or leaves me able to see which one is flagging behind.

  2. I have five saving accounts- each with goals (property tax and insurance, emergencies, pets, cars and savings) We have two checking accounts- one is local so we can get cash (we do not use ATMs), the other is USAA. All pensions go to those. We live off of those. What is not used (or allocated) is swept into savings at the end of the pay period.
    We have a large school bond. Lucked into that one 10 years ago- 10 years to go on that one.
    All of our IRAs are brokerage accounts. 403B is in a Fidelity growth and TSP is in the government bond fund. I know we have lots of accounts.
    The last two years we have worked to move as much from T IRA to R IRA.This is our last year for that.
    The most interesting thing is that I found a ledger from 2001 in which I predicted how much I would have this year (the year my husband turned 65). I am about 6,000 ahead. Our growths have been in spurts- but they are present and accounted for :)

    1. Great work. My the calculators all say we should be fine, but I wish we were closer to goal.

  3. My fiancé and I just opened up a P2P savings account with wellersley and are loving it (they invest the money solely in property so it gives some added security). I agree that its so important to have a goal in mind when saving. For us its about getting through college debt free and getting a down payment for a house.

  4. i love this! i haven't yet started to be able to really start to save - i'm in the whole debt repaying process, but once i'm out of that i'm definitely going to start researching different methods for saving + investing. thanks so much for linking up with our first final friday finance linkup!