Bird Leaving The Nest

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mikael122
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Joined: Sun Jan 26, 2020 10:03 am

Bird Leaving The Nest

Post by mikael122 »

For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
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Cheez-It Guy
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Re: Bird Leaving The Nest

Post by Cheez-It Guy »

Are you the baby bird or the parent bird?
HomeStretch
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Re: Bird Leaving The Nest

Post by HomeStretch »

Welcome!

Ally is a good choice for online checking and savings. I don’t think their credit card and investments features are as good as some of the low-cost brokerages.

Consider Fidelity. It offers a Cash Management Account (CMA) which can provide checking/savings/ATM/debit card. Fidelity has a great 2% back Visa with a $150 bonus when you spend $xx in xx days. The Fidelity app offers mobile banking including check deposit. Fidelity also offers IRA, HSA and Solo 401k accounts. ETA: Fidelity’s Roth IRA would be a good choice per your other thread.

Here’s a link to the ongoing BH thread about Fidelity:
viewtopic.php?f=2&t=266538
Last edited by HomeStretch on Sun Jan 26, 2020 12:05 pm, edited 1 time in total.
sailaway
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Re: Bird Leaving The Nest

Post by sailaway »

It would be good to get a single credit card with a low limit, until baby bird figures out that they are responsible with credit.

Baby bird should do their own research on banks and should look into credit unions as soon as they are at all stable. CUs are a great option for students, for example. Less so for someone who just signed a 6 month contract and may have to move within the next year.
ohai
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Re: Bird Leaving The Nest

Post by ohai »

Most of the banks are the same - just go with the one that is convenient in terms of ATMs or something. I wouldn't choose the place based on savings account rates; the dollar difference will be small, and you shouldn't be keeping most of your money in cash at this age.

Yes, you should get a credit card (assuming you are not a spending addict). In addition to the small cash back bonus, it is just convenient to have and it gives you better fraud protection than debit cards.

The most important thing, in my opinion, is personal budgeting and investment allocation. Every dollar you save and invest now might be worth 15-20 times when you retire.
Topic Author
mikael122
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Re: Bird Leaving The Nest

Post by mikael122 »

Cheez-It Guy wrote: Sun Jan 26, 2020 11:57 am Are you the baby bird or the parent bird?

Baby....Young man bird :happy
Topic Author
mikael122
Posts: 15
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Re: Bird Leaving The Nest

Post by mikael122 »

HomeStretch wrote: Sun Jan 26, 2020 12:01 pm Welcome!

Ally is a good choice for online checking and savings. I don’t think their credit card and investments features are as good as some of the low-cost brokerages.

Consider Fidelity. It offers a Cash Management Account (CMA) which can provide checking/savings/ATM/debit card. Fidelity has a great 2% back Visa with a $150 bonus when you spend $xx in xx days. The Fidelity app offers mobile banking including check deposit. Fidelity also offers IRA, HSA and Solo 401k accounts. ETA: Fidelity’s Roth IRA would be a good choice per your other thread.

Here’s a link to the ongoing BH thread about Fidelity:
viewtopic.php?f=2&t=266538
Looks interesting. was looking at Vanguard Target funds for Roth IRA
chevca
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Re: Bird Leaving The Nest

Post by chevca »

For someone just starting out, I would recommend checking out your local credit unions. They often have better interest rates on checking or savings up to a certain balance. You can do checking, savings, and a CC through them if you want. And, they're local. I just prefer a local place for some banking needs.

I use a local credit union and have accounts with Ally.

I also have the Ally CC and it's in the process of being switched over to another servicer. I forget who at the moment. But, seems Ally doesn't want to handle the CC side of things anymore, and the new service isn't giving that great of a perk ... 1% for most purchases. There are better rewards cards out there.
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Kenkat
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Re: Bird Leaving The Nest

Post by Kenkat »

When our kids were getting near job age, we had them get basic checking accounts. Since we use PNC, we went with that and set up what they call their student virtual wallet. It is primarily an electronic oriented account - a debit card but no checks. We did this by saying one day “we are going to the bank today and you are getting checking accounts set up”. This was good because when they got jobs, even part time ones, all payroll was direct deposit.

One son has since gotten some checks printed cheap and a credit card while the other is still content with just the debit card.

I also prompted them to set up Vanguard accounts, which they did in early 2018. They got to experience the Dec. 2018 drop - as the young people say “it be like that sometime” but also the 2019 climb, to which I cautioned them “it don’t always be like that”.

One son was more proactive than the other, asking me about wanting to do something with his money while the other was more of me say “you should do something with your money”.
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Cheez-It Guy
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Re: Bird Leaving The Nest

Post by Cheez-It Guy »

Kenkat wrote: Sun Jan 26, 2020 1:29 pm I also prompted them to set up Vanguard accounts, which they did in early 2018. They got to experience the Dec. 2018 drop - as the young people say “it be like that sometime” but also the 2019 climb, to which I cautioned them “it don’t always be like that".
LOL
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Watty
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Re: Bird Leaving The Nest

Post by Watty »

mikael122 wrote: Sun Jan 26, 2020 11:53 am For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
Three things;

1) Avoid debit cards they can be a major problem if they are compromised and your account is drained and you are fighting to get your money back and the bank may not always agree to refund the money. Your bank or credit union might try sending you a debit card instead of an ATM card but if they do call them back and insist on a plain ATM card. I have had to do this several times and they baulked at first but when I insisted they would send me an ATM card.

2) I never have credit cards at the places where I have other checking or savings accounts. The reason is that in the 50 pages of fine print in the account agreements they have a "right of offset"(Google this).

This means that if there is a problem with your credit card they can just transfer the money from your checking or savings account to pay off your credit card without telling you first. For example if you have a disputed charge on your credit card you can dispute it but occasionally the credit card company will decide that you were somehow responsible not take the disputed charge off your statement. When push comes to shove they can just pay off the credit card from your checking or savings.

There can also be grey areas where it is not clear just who is responsible. For example if you order something online and it is delivered and left on your porch, but it is gone when you get home. The seller has proof of delivery so they may not cover it so you might need to dispute the credit card charge. Another is if you have a prepaid hotel room but there are major problems with the room, you could also dispute the charge. If the credit card company does not have access to your checking and savings they will be more likely to side with you.

3) When you set up online bill paying always do this from your checking account where you send money to the bill you want to pay. Try to avoid letting companies(like a car loan or credit card) pull the money from your checking account. The reason is that you will have more control and companies have been known to incorrectly pull the money.
jdb
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Re: Bird Leaving The Nest

Post by jdb »

Oops. Wrong post.
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Taz
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Re: Bird Leaving The Nest

Post by Taz »

Daughter (still in college) got a starter Visa in her name from NFCU backed by a savings account with $750. She had a summer internship so she had income. Eight months or so later it was reissued as a regular rewards card with $2,000 limit. We were/are not on the account.
The destination matters.
sport
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Re: Bird Leaving The Nest

Post by sport »

Watty wrote: Sun Jan 26, 2020 2:34 pm
mikael122 wrote: Sun Jan 26, 2020 11:53 am For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
Three things;

1) Avoid debit cards they can be a major problem if they are compromised and your account is drained and you are fighting to get your money back and the bank may not always agree to refund the money. Your bank or credit union might try sending you a debit card instead of an ATM card but if they do call them back and insist on a plain ATM card. I have had to do this several times and they baulked at first but when I insisted they would send me an ATM card.

2) I never have credit cards at the places where I have other checking or savings accounts. The reason is that in the 50 pages of fine print in the account agreements they have a "right of offset"(Google this).

This means that if there is a problem with your credit card they can just transfer the money from your checking or savings account to pay off your credit card without telling you first. For example if you have a disputed charge on your credit card you can dispute it but occasionally the credit card company will decide that you were somehow responsible not take the disputed charge off your statement. When push comes to shove they can just pay off the credit card from your checking or savings.

There can also be grey areas where it is not clear just who is responsible. For example if you order something online and it is delivered and left on your porch, but it is gone when you get home. The seller has proof of delivery so they may not cover it so you might need to dispute the credit card charge. Another is if you have a prepaid hotel room but there are major problems with the room, you could also dispute the charge. If the credit card company does not have access to your checking and savings they will be more likely to side with you.

3) When you set up online bill paying always do this from your checking account where you send money to the bill you want to pay. Try to avoid letting companies(like a car loan or credit card) pull the money from your checking account. The reason is that you will have more control and companies have been known to incorrectly pull the money.
I agree with all three of these recommendations. They are exactly the way I manage my finances. It eliminates a lot of potential problems.
Topic Author
mikael122
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Joined: Sun Jan 26, 2020 10:03 am

Re: Bird Leaving The Nest

Post by mikael122 »

sport wrote: Sun Jan 26, 2020 5:24 pm
Watty wrote: Sun Jan 26, 2020 2:34 pm
mikael122 wrote: Sun Jan 26, 2020 11:53 am For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
Three things;

1) Avoid debit cards they can be a major problem if they are compromised and your account is drained and you are fighting to get your money back and the bank may not always agree to refund the money. Your bank or credit union might try sending you a debit card instead of an ATM card but if they do call them back and insist on a plain ATM card. I have had to do this several times and they baulked at first but when I insisted they would send me an ATM card.

2) I never have credit cards at the places where I have other checking or savings accounts. The reason is that in the 50 pages of fine print in the account agreements they have a "right of offset"(Google this).

This means that if there is a problem with your credit card they can just transfer the money from your checking or savings account to pay off your credit card without telling you first. For example if you have a disputed charge on your credit card you can dispute it but occasionally the credit card company will decide that you were somehow responsible not take the disputed charge off your statement. When push comes to shove they can just pay off the credit card from your checking or savings.

There can also be grey areas where it is not clear just who is responsible. For example if you order something online and it is delivered and left on your porch, but it is gone when you get home. The seller has proof of delivery so they may not cover it so you might need to dispute the credit card charge. Another is if you have a prepaid hotel room but there are major problems with the room, you could also dispute the charge. If the credit card company does not have access to your checking and savings they will be more likely to side with you.

3) When you set up online bill paying always do this from your checking account where you send money to the bill you want to pay. Try to avoid letting companies(like a car loan or credit card) pull the money from your checking account. The reason is that you will have more control and companies have been known to incorrectly pull the money.
I agree with all three of these recommendations. They are exactly the way I manage my finances. It eliminates a lot of potential problems.
So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.
sport
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Location: Cleveland, OH

Re: Bird Leaving The Nest

Post by sport »

mikael122 wrote: Sun Jan 26, 2020 5:50 pm
sport wrote: Sun Jan 26, 2020 5:24 pm
Watty wrote: Sun Jan 26, 2020 2:34 pm
mikael122 wrote: Sun Jan 26, 2020 11:53 am For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
Three things;

1) Avoid debit cards they can be a major problem if they are compromised and your account is drained and you are fighting to get your money back and the bank may not always agree to refund the money. Your bank or credit union might try sending you a debit card instead of an ATM card but if they do call them back and insist on a plain ATM card. I have had to do this several times and they baulked at first but when I insisted they would send me an ATM card.

2) I never have credit cards at the places where I have other checking or savings accounts. The reason is that in the 50 pages of fine print in the account agreements they have a "right of offset"(Google this).

This means that if there is a problem with your credit card they can just transfer the money from your checking or savings account to pay off your credit card without telling you first. For example if you have a disputed charge on your credit card you can dispute it but occasionally the credit card company will decide that you were somehow responsible not take the disputed charge off your statement. When push comes to shove they can just pay off the credit card from your checking or savings.

There can also be grey areas where it is not clear just who is responsible. For example if you order something online and it is delivered and left on your porch, but it is gone when you get home. The seller has proof of delivery so they may not cover it so you might need to dispute the credit card charge. Another is if you have a prepaid hotel room but there are major problems with the room, you could also dispute the charge. If the credit card company does not have access to your checking and savings they will be more likely to side with you.

3) When you set up online bill paying always do this from your checking account where you send money to the bill you want to pay. Try to avoid letting companies(like a car loan or credit card) pull the money from your checking account. The reason is that you will have more control and companies have been known to incorrectly pull the money.
I agree with all three of these recommendations. They are exactly the way I manage my finances. It eliminates a lot of potential problems.
So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.
Yes, I prefer to bank at a bank and invest with an investment company. It is easy to transfer money between them. I don't want a direct connection to either with a credit card.
Topic Author
mikael122
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Joined: Sun Jan 26, 2020 10:03 am

Re: Bird Leaving The Nest

Post by mikael122 »

sport wrote: Sun Jan 26, 2020 7:24 pm
mikael122 wrote: Sun Jan 26, 2020 5:50 pm
sport wrote: Sun Jan 26, 2020 5:24 pm
Watty wrote: Sun Jan 26, 2020 2:34 pm
mikael122 wrote: Sun Jan 26, 2020 11:53 am For someone just starting out what would you recommend as a good set up, when first beginning to bank? I would like to keep it simple perhaps all online. Would an Ally savings and checking be good? Using their credit card? Would it be smart to get a couple good credit cards with incentives/ rewards like cashback Discover, Chase, etc?

Thank you
Three things;

1) Avoid debit cards they can be a major problem if they are compromised and your account is drained and you are fighting to get your money back and the bank may not always agree to refund the money. Your bank or credit union might try sending you a debit card instead of an ATM card but if they do call them back and insist on a plain ATM card. I have had to do this several times and they baulked at first but when I insisted they would send me an ATM card.

2) I never have credit cards at the places where I have other checking or savings accounts. The reason is that in the 50 pages of fine print in the account agreements they have a "right of offset"(Google this).

This means that if there is a problem with your credit card they can just transfer the money from your checking or savings account to pay off your credit card without telling you first. For example if you have a disputed charge on your credit card you can dispute it but occasionally the credit card company will decide that you were somehow responsible not take the disputed charge off your statement. When push comes to shove they can just pay off the credit card from your checking or savings.

There can also be grey areas where it is not clear just who is responsible. For example if you order something online and it is delivered and left on your porch, but it is gone when you get home. The seller has proof of delivery so they may not cover it so you might need to dispute the credit card charge. Another is if you have a prepaid hotel room but there are major problems with the room, you could also dispute the charge. If the credit card company does not have access to your checking and savings they will be more likely to side with you.

3) When you set up online bill paying always do this from your checking account where you send money to the bill you want to pay. Try to avoid letting companies(like a car loan or credit card) pull the money from your checking account. The reason is that you will have more control and companies have been known to incorrectly pull the money.
I agree with all three of these recommendations. They are exactly the way I manage my finances. It eliminates a lot of potential problems.
So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.
Yes, I prefer to bank at a bank and invest with an investment company. It is easy to transfer money between them. I don't want a direct connection to either with a credit card.
Any recommended Credit Cards? As of now I have 0.
Poorman
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Re: Bird Leaving The Nest

Post by Poorman »

Creditcards.com is a good tool. Set it up to pay the entire bill on autopay
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Watty
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Re: Bird Leaving The Nest

Post by Watty »

mikael122 wrote: Sun Jan 26, 2020 7:31 pm So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.
I have not looked at the Fidelity Cash Management in a while but as I recall one of the main features was that it had a credit card with a 2% cash rebate. I use the Citi double cash credit card to get a 2% rebate so I have no need for that.

I just do my checking at a regional bank where I have a no fee checking account. Before I retired I rarely had more then $5K in that account so even if I missed out on 1 or 2 percent the convenience was worth it to me. If I had more liquid cash than that I would put it in someplace like a Vanguard Prime money market account. One of the reasons that I do not keep too much cash in my checking account is they can sometimes be compromised.

The target date funds are an excellent choice until you also have retirement money in taxable accounts and need to worry about tax efficiency.

Having several credit cards is a good idea. A couple of more points.

You should make sure that you have one or two with no foreign transaction fees in case you take a trip overseas.

A lot of credit cards stopped providing car rental insurance coverage last year. If you have one that provides it you should double check to make sure that it still does since you may have missed the notice that this was changing. Have one that provides this.

Some people will have a seperate credit card just for their recurring expenses so there is less chance of it being compromised and having to deal with updating all the recurring charges. They do not carry this credit card with them.

I also have one credit card that has no cash advance fee and I have the PIN for it so that I can use it at an ATM to get cash if I have a problem with my normal bank ATM card.

If you are married then you and your spouse should each carry a credit card that the other does not have. That way if a purse or wallet is lost then you will still have a credit card that works. You should both apply for credit cards in your own name to help build up their individual credit history. Having a second credit card on a spouse's account does not always work the same and you both need to have good credit in case of a death or divorce.
Topic Author
mikael122
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Re: Bird Leaving The Nest

Post by mikael122 »

Watty wrote: Sun Jan 26, 2020 8:02 pm
mikael122 wrote: Sun Jan 26, 2020 7:31 pm So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.

The target date funds are an excellent choice until you also have retirement money in taxable accounts and need to worry about tax efficiency.
Can you expand on this?
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Cubicle
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Re: Bird Leaving The Nest

Post by Cubicle »

I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓
Topic Author
mikael122
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Re: Bird Leaving The Nest

Post by mikael122 »

Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
The higher yielding savings account is a not worth it to you?
sport
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Re: Bird Leaving The Nest

Post by sport »

mikael122 wrote: Sun Jan 26, 2020 10:26 pm
Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
The higher yielding savings account is a not worth it to you?
I use a brick and mortar bank too. However, this does not preclude me from using Vanguard MM funds for higher rates on cash. I just keep enough in the bank to handle my transactions for the month. My bank accounts have no fees that I have to pay.
HereToLearn
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Re: Bird Leaving The Nest

Post by HereToLearn »

mikael122 wrote: Sun Jan 26, 2020 10:26 pm
Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
The higher yielding savings account is a not worth it to you?
I think it depends on how much money you have, and how complicated or streamlined you want your finances. My 20-something children both have checking accounts with a national bank. They hardly ever go into the branch, but it is there if they need to, and they take cash out of the ATM. One uses almost no cash, and the other goes through quite a bit. They have CCs that are set up on auto-pay so that they do not forget to pay the bill. No debit cards, and ATM card cannot be used as a debit card.

They do not have high balances because they attempt to fund Roth IRAs to the max (or to their W-2 earnings---the college student doesn't earn much). If you had more cash that you do not need to fund your monthly life, you could keep it at Ally or Marcus and transfer it over to your retail checking account as needed. Lots of people rely only on Ally or Marcus, but you may want to have a branch for a while if just starting out.

If you do not yet have a CC, you should apply for one that is targeted to students or recent graduates. Capital One used to offer an attractive student card, but I have not looked at this in a couple of years. Once you have had a card open for a while, you will be able to apply for a card with better features. You just need to build your credit history first.

I have responded to all of this as if you are a 20-something. If I am mistaken, please ignore my suggestions.
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Watty
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Re: Bird Leaving The Nest

Post by Watty »

mikael122 wrote: Sun Jan 26, 2020 10:07 pm
Watty wrote: Sun Jan 26, 2020 8:02 pm
mikael122 wrote: Sun Jan 26, 2020 7:31 pm So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.

The target date funds are an excellent choice until you also have retirement money in taxable accounts and need to worry about tax efficiency.
Can you expand on this?
A good target date fund gives you a good mix of low cost index funds that is automatically rebalanced.

There are two reasons that this can be an issue in a taxable account.
1) They own taxable bonds which that you will be taxed on.

2) They are constantly selling and buying funds to rebalance and whenever they sell something there can be taxable capital gains.

One you have retirement money in a taxable account it is typically better to use a three fund portfolio.

https://www.bogleheads.org/wiki/Three-fund_portfolio
sport wrote: Sun Jan 26, 2020 10:29 pm
mikael122 wrote: Sun Jan 26, 2020 10:26 pm
Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
The higher yielding savings account is a not worth it to you?
I use a brick and mortar bank too. However, this does not preclude me from using Vanguard MM funds for higher rates on cash. I just keep enough in the bank to handle my transactions for the month. My bank accounts have no fees that I have to pay.
1% on $5k is only 50 dollars for the convenience. I probably spend more than that a year for convenience when I buy bags of premixed salad instead of heads of lettuce.
Topic Author
mikael122
Posts: 15
Joined: Sun Jan 26, 2020 10:03 am

Re: Bird Leaving The Nest

Post by mikael122 »

Watty wrote: Sun Jan 26, 2020 10:46 pm
mikael122 wrote: Sun Jan 26, 2020 10:07 pm
Watty wrote: Sun Jan 26, 2020 8:02 pm
mikael122 wrote: Sun Jan 26, 2020 7:31 pm So you would be against a Fidelity Cash Management Account?

Something better being.

-Ally online savings/checking

-Vangaurd Target funds for Roth IRA

-Credit Cards: 2-3 with differing rewards.

The target date funds are an excellent choice until you also have retirement money in taxable accounts and need to worry about tax efficiency.
Can you expand on this?
A good target date fund gives you a good mix of low cost index funds that is automatically rebalanced.

There are two reasons that this can be an issue in a taxable account.
1) They own taxable bonds which that you will be taxed on.

2) They are constantly selling and buying funds to rebalance and whenever they sell something there can be taxable capital gains.

One you have retirement money in a taxable account it is typically better to use a three fund portfolio.

https://www.bogleheads.org/wiki/Three-fund_portfolio
sport wrote: Sun Jan 26, 2020 10:29 pm
mikael122 wrote: Sun Jan 26, 2020 10:26 pm
Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
The higher yielding savings account is a not worth it to you?
I use a brick and mortar bank too. However, this does not preclude me from using Vanguard MM funds for higher rates on cash. I just keep enough in the bank to handle my transactions for the month. My bank accounts have no fees that I have to pay.
1% on $5k is only 50 dollars for the convenience. I probably spend more than that a year for convenience when I buy bags of premixed salad instead of heads of lettuce.
Will start reading. Main reason I was looking into the targeted fund was simplicity. I do not want to be constantly managing.
MnD
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Re: Bird Leaving The Nest

Post by MnD »

Schwab checking and paired brokerage account for no minimums/fees, reimbursement of all worldwide ATM charges, small amount of interest on checking. Linked brokerage for emergency fund savings with CD's, money market fund or t-bills and to also to learn about investing outside of retirement accounts which is something a fair number of people never get up to speed on. Assuming they're working also a good home for their first Roth IRA. Our kids would never consider reverting to separate banking/investing and numerous friends of theirs have dumped mediocre arrangements at stand-alone banks for Schwab.

Kids had good luck with obtaining (on their own) a Capital One Quicksilver 1.5% cash back card when at the time of application they had very thin credit files as in no credit experience other than being an authorized user on one of my cards when in college, very short employment history and no prior credit activity on their own. Initial credit limit was low but was raised appropriately in line with satisfactory payment history and income. Quicksilver is a solid rewards card that doesn't require stellar or deep credit history or higher income.
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Cubicle
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Re: Bird Leaving The Nest

Post by Cubicle »

mikael122 wrote: Sun Jan 26, 2020 10:26 pmThe higher yielding savings account is a not worth it to you?
Setting up a link from Capital One to/from Vanguard is easy, quick, & headache free! I hope the family members in question would be willing to do so. Yes its an extra step but there is another benefit to having your savings/investments at another bank/company. When I log into my Vanguard account, whatever numbers I see there are not my daily spending money. So I can look at those balances & tell myself "that's what I've set aside so far; I'm on track/behind/ahead". When I have too much cash in my checking accounts I don't separate it in my head from the daily spending money.

I dunno... my separate account balances are motivation to keep going.
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Katietsu
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Re: Bird Leaving The Nest

Post by Katietsu »

You are going to have trouble getting a credit card with no credit history. The first card is the hardest unless you qualify for a student card.

You seem opposed to using a local credit union. However, a local credit union can have a lot of advantages when you are starting out. They usually have low or no minimums. They may well give you a low limit credit card even though none of the popular national cards will. They may also give you good auto loan rates with a shorter credit history if you can show a stable job and solid payment history. You do need to make sure their apps and online banking meets your needs as some of great tech and others not so much.
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mikael122
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Re: Bird Leaving The Nest

Post by mikael122 »

Cubicle wrote: Tue Jan 28, 2020 1:27 am
mikael122 wrote: Sun Jan 26, 2020 10:26 pmThe higher yielding savings account is a not worth it to you?
Setting up a link from Capital One to/from Vanguard is easy, quick, & headache free! I hope the family members in question would be willing to do so. Yes its an extra step but there is another benefit to having your savings/investments at another bank/company. When I log into my Vanguard account, whatever numbers I see there are not my daily spending money. So I can look at those balances & tell myself "that's what I've set aside so far; I'm on track/behind/ahead". When I have too much cash in my checking accounts I don't separate it in my head from the daily spending money.

I dunno... my separate account balances are motivation to keep going.
Any reason why capital one?
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Bogle7
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Re: Bird Leaving The Nest

Post by Bogle7 »

Credit union.
One large enough to have all the desired services.
rj342
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Re: Bird Leaving The Nest

Post by rj342 »

I'm sure some others will disagree with part 2 of this, because of the risk of getting yourself in trouble with debt...

As far as credit cards go, get one with no fee and use it every month for routine expenses which you pay off immediately every month.
Once you have been using that responsibly for a while and have had your initial credit limit raised once or twice, then consider getting a second card.
This 2nd one is only to be used for emergencies (other than an occasional token purchase to keep active), or carefully considered planned larger purchases that you just might need to stretch payment for over just a *few* months (never making just the minimum payment!)

The simple rule is to avoid debt and paying interest, period, but the 2nd card lets you deal with the out of the ordinary while keeping your normal monthly expenses cleanly partitioned.

Yes, you should be working on an emergency fund in all this, but emergencies may not wait on your timetable. Or you still need to pay right now even though you do have the money in a savings account to fully cover it.

A separate but related gray area issue IMO is when something unexpected does come up: is it better to carry some modest debt for a bit while still holding on to some modest cash savings (for flexibility), or better to avoid all debt even if it means you wipe out your savings.
almostretired1965
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Re: Bird Leaving The Nest

Post by almostretired1965 »

Cubicle wrote: Sun Jan 26, 2020 10:20 pm I vote for a bank you can physically visit. There have been numerous times where I was saved by being able to go into a physical branch, brick & mortar, & talk to someone. I manage 99.99% of my banking online, but that 0.01% of the time can sometimes be invaluable.

I personally use Capital One. Very happy with them overall, but they have their quirks. I wouldn't feel comfortable with an online only bank. Plus I sometimes have cash I need to deposit. So going to an ATM to do so is nice.
I agree. Our checking account was hacked by someone trying to link to it once. No doubt this could have been addressed over the phone. But being able to step into a branch, prove our identity, and discuss the options with a live rep was invaluable.

A
fyre4ce
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Re: Bird Leaving The Nest

Post by fyre4ce »

I recommend starting off simple. Lots of BH's have complex finances with many different accounts, cards, etc. Start off with one checking account, one brokerage and IRA at the same institution, and one or two credit cards. It's easier to add complexity than take it out.
Silence Dogood
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Re: Bird Leaving The Nest

Post by Silence Dogood »

mikael122 wrote: Sun Jan 26, 2020 12:57 pm was looking at Vanguard Target funds for Roth IRA
A Vanguard Target Retirement fund is an excellent choice.

Interesting fact: the average target retirement fund investor tends to outperform the average do-it-yourself index fund investor.

"Simplicity is the master key to financial success." - Jack Bogle
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Cubicle
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Re: Bird Leaving The Nest

Post by Cubicle »

mikael122 wrote: Wed Jan 29, 2020 12:48 pmAny reason why capital one?
As mentioned, physical branch. But at the time I opened my account (~2006): free checking, free checks, high yield interest rate, other bank's atm fee reimbursement, free cashier's checks. My (old) high yield checking still has these features, except the interest rate is only 0.20%.

Unexpected bonus I found out only a few years ago, open & link a Capital One 360 "online" checking account, which uses the AllPoint ATM network, which is really expansive. Lots of convenience stores, I think most if not all PNC atms. And big for me, lots of atms in Canada to withdraw Canadian currency at market rates & no markups. No fees at any AllPoint atm.. Withdrawals only, but serves me well. Instant transfers, online, phone, computer, from my main "regular" checking to my 360 checking. I just lucked out to get an awesome combination of accounts.

Currently, I'm not sure how their checking accounts compare. But I do know physical branches can service their "online only" 360 accounts. Withdrawals, deposit, cashier checks (not sure if free).
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓
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