Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

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MortgageOnBlack
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Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by MortgageOnBlack » Fri Jan 05, 2018 2:19 pm

For the longest time, I've kept a single savings account with Ally Bank (has grown to around $30k). This savings account was originally designated to be used for Emergency/Contingency/Opportunity/Car/Travel/Etc items.... Mentally, it's hard for me to use any of this money and I'd prefer to create sub-accounts for the different categories for which I can use the money for the designated items guilt-free.

I realize money is fungible, but I would find it much easier, for example, to spend the money in a "Car savings account" for repairs/maintenance/replacement if the money was earmarked to be exclusively used for car-related expenses.

Ally allows me to create additional savings account (sub-accounts?) to accomplish this.

Starting this year, I have moved $10k of the $30k to I-Bonds. After the 1-year waiting period, this will be my 6-month emergency fund. Some of the remaining $20k will be used for "Opportunity" (possible down-payment on a second investment/rental property, unforeseen investment opportunity down the line). I may start over with $0 for Car, Travel, Etc and budget a set amount monthly...

Perhaps I am over-thinking this a bit, but I'm tired of having a hoarding mindset with this Savings account; I feel odd just letting this money sit there without a specific purpose. Any suggestions on why I should keep these accounts consolidated instead of partitioning them out? Curious if others have experienced this issue with their Savings account.

Also, I would prefer to come up with a reasonable budget a month to dump into these accounts. For Car, I was thinking $83.33 ($1,000 a year) for maintenance/repairs/new car replacement + my insurance premium. I'm not sure what a reasonable travel budget is (I love to travel!). My Roth IRA is being Maxed out yearly with monthly payments and I add $600 a month into Taxable (I don't have access to any other Tax-Advantaged accounts). I will search Bogleheads threads for budgeting advice.

I appreciate any feedback.

crazygrow
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by crazygrow » Fri Jan 05, 2018 2:34 pm

I have about 20 savings accounts at Ally and they all get filled with money from my second monthly paycheck via auto transfer. Anything that isn’t a monthly or quarterly known recurring item has an account set up. Works for us and is easy.

BogleMelon
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by BogleMelon » Fri Jan 05, 2018 2:38 pm

I have only 1 saving account at Ally. YNAB budgeting software is doing the categorizing for me!
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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bligh
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by bligh » Fri Jan 05, 2018 2:52 pm

This is precisely why I refer to my Emergency fund as "Cash reserves" instead. I keep it in a range where I wont let it fall below a certain number, or go above another.


So for example:

If a 6 month emergency fund were $30K for me. I would then aim to hold cash reserves between $30K and $60K. If expenses were approaching (travel/car purchases/etc.) then I would let the cash reserves creep up towards $60K or even higher. If I was certain few expense were coming up and the market had just had a big correction, I would let my cash reserves fall as low as $30K.

If my cash reserves ever fell below $30K I would prioritize getting it back up to $30K as soon as possible.

This assumes you don't have a large taxable portfolio. Remember... In reality your whole portfolio is accessible to you if you need it. If you have a large taxable portfolio and you absolutely need the money in a "true" emergency you would draw upon that. In a catastrophic emergency, you would swallow the penalty and access your Roth or 401K as well. The cash reserves exist to make it so you reduce the likelihood that you have to dip into your portfolio at a bad time, or pay a tax penalty for doing so.

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MortgageOnBlack
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by MortgageOnBlack » Fri Jan 05, 2018 3:11 pm

bligh wrote:
Fri Jan 05, 2018 2:52 pm
This is precisely why I refer to my Emergency fund as "Cash reserves" instead. I keep it in a range where I wont let it fall below a certain number, or go above another.


So for example:

If a 6 month emergency fund were $30K for me. I would then aim to hold cash reserves between $30K and $60K. If expenses were approaching (travel/car purchases/etc.) then I would let the cash reserves creep up towards $60K or even higher. If I was certain few expense were coming up and the market had just had a big correction, I would let my cash reserves fall as low as $30K.

If my cash reserves ever fell below $30K I would prioritize getting it back up to $30K as soon as possible.

This assumes you don't have a large taxable portfolio. Remember... In reality your whole portfolio is accessible to you if you need it. If you have a large taxable portfolio and you absolutely need the money in a "true" emergency you would draw upon that. In a catastrophic emergency, you would swallow the penalty and access your Roth or 401K as well. The cash reserves exist to make it so you reduce the likelihood that you have to dip into your portfolio at a bad time, or pay a tax penalty for doing so.
Good points. Perhaps I need to change the way I view this money. I've gotten to a point where I'm ready to start hitting my taxable as hard as possible but I don't want to be neglecting other important areas (car maintenance/repair, regular domestic travel (important to me), etc...) Perhaps categorizing the money complicates it and viewing it differently as "Cash Reserves" that can fluctuate is a better option. I would not consider this money to be part of my asset allocation since it used for short/intermediate-term spending. It just blows my mind that I have managed to save $30k (more money than I've ever seen in my life) and I am extremely fearful of squandering it.... Mo Money Mo Problems

2015
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by 2015 » Fri Jan 05, 2018 7:59 pm

BogleMelon wrote:
Fri Jan 05, 2018 2:38 pm
I have only 1 saving account at Ally. YNAB budgeting software is doing the categorizing for me!
Me too, only I use an excel spreadsheet with line items for specific budgeted expenses (e.g., a line item for a hopefully not too overly costly :shock: mold remediation project this year).

Jack FFR1846
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by Jack FFR1846 » Fri Jan 05, 2018 8:50 pm

I'm constantly looking for higher rates to pay on "free" money (free to easily get and spend when needed). This search alone has left me with many accounts. I keep track of the total on paper (stuck to a cork board in front of me at work).

From highest to lowest:
DCU primary savings account for each of my family of 4: 5.12% ($1k max each)
Ally 11 month no penalty CD: 1.75%
Redneck Megamoney account: 1.5% (only up to $35k)
Ally HYSA: What are they today? 1.2%, maybe
DCU money market account (to easily move to my savings instantly): 0.55%-0.65% depending on balance

With 2 tuitions to pay, I keep the next semester's worth in these accounts along with money for expected expenses like property tax. When there's "enough" to invest, it gets transferred to Schwab to buy SCHB. My emergency fund (7 years) is in US Savings bonds.
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TheOscarGuy
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by TheOscarGuy » Fri Jan 05, 2018 9:26 pm

I used to have 5-6 ally accounts at one point. But now I *manually* track the funds and keep just one savings account. This is not any more additional work than manually assigning the next dollar to one of those accounts.

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willthrill81
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by willthrill81 » Fri Jan 05, 2018 11:46 pm

2015 wrote:
Fri Jan 05, 2018 7:59 pm
BogleMelon wrote:
Fri Jan 05, 2018 2:38 pm
I have only 1 saving account at Ally. YNAB budgeting software is doing the categorizing for me!
Me too, only I use an excel spreadsheet with line items for specific budgeted expenses (e.g., a line item for a hopefully not too overly costly :shock: mold remediation project this year).
I've been using Excel to do this for nearly five years now. We have one savings account, now with Ally, which we use to save for all of our non-monthly expenses (e.g. vehicle maintenance, home maintenance, gifts, HOA dues). After having done this for a while, I have a really good grasp on what our annual expenses in these categories are. I have everything separated into 'sub-accounts' on my end, but it's lumped together in one 'real' account with Ally. It's easy, simple, and free.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by Kompass » Sat Jan 06, 2018 12:17 am

I think you should do this in whatever way makes you the most comfortable. To the best of my knowledge there is no reason not to have three or five or eight accounts if you want.

Mine is just set up as checking, savings, taxes. I have my income from various sources all channel into my savings account, scrape off about 40 percent and put it in the tax account, and the rest is available to either leave in savings or transfer to checking for expenses or reinvestment.

Since each account gets its own account number I have it set up with the IRS so they can do a direct ACH transfer out of the tax account to pay my quarterlies. I never worry about missing a tax payment since I file Safe-harbor. The whole point as far as I'm concerned is that it is flexible enough for you to set it up in anyway you want to.
The large print giveth and the fine print taketh away.

BUBear29
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by BUBear29 » Sat Jan 06, 2018 12:26 am

BogleMelon wrote:
Fri Jan 05, 2018 2:38 pm
I have only 1 saving account at Ally. YNAB budgeting software is doing the categorizing for me!
Ditto. I used to do what OP wants to do and realized it was way too much. YNAB has simplified my financial accounts and allowed me to be more organized. Love YNAB
There is no dignity quite so impressive, and no one independence quite so important, as living within your means.

spammagnet
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by spammagnet » Sat Jan 06, 2018 12:34 am

Jack FFR1846 wrote:
Fri Jan 05, 2018 8:50 pm
... My emergency fund (7 years) is in US Savings bonds.
7 years' worth of emergency fund? Wow?

BUBear29
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Re: Need help with a single Ally Savings Account - Emergency/Contigenency/Oppurtunity/Car/Travel/Etc...

Post by BUBear29 » Sat Jan 06, 2018 1:03 am

spammagnet wrote:
Sat Jan 06, 2018 12:34 am
Jack FFR1846 wrote:
Fri Jan 05, 2018 8:50 pm
... My emergency fund (7 years) is in US Savings bonds.
7 years' worth of emergency fund? Wow?
impressive. but maybe a little excessive imo
There is no dignity quite so impressive, and no one independence quite so important, as living within your means.

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