I would prioritize getting that employer match ahead of long-term savings, but agree with everything else's order. Thank you for the video. Either way, I think following this would put most people in a much better financial and lower stress position.
An emergency fund should not be placed in a CD as there are penalties to get the money out before the end of the CD term. Money held for emergencies should be liquid and easily accessible quicky. High yield savings accounts, checking, or regular savings accounts are the best places for emergency funds. My preference is a high yield savings account.
You’re right about the penalties! But there are strategies like CD laddering to ensure you always have some money available to you when it’s needed… but I agree, for most people and for simplicity, a high yield savings account does the job 👍🏽
For an HSA if at some point in the future, you want to take the money out (not for medical) can you, can you close the account completely, and if you do do you pay taxes at that point?
Yes generally taking money out (not for medical) is a taxable event - and not recommended because the penalty is 20% in addition to ordinary income taxes. For context, that’s a higher penalty than withdrawing retirement account funds prior to retirement. There are some exceptions though. For example if you’re over 65 that penalty no longer applies but you’d still have to pay income taxes. So definitely make sure you understand all the rules before moving money in and out of accounts like the HSA!
Im building my emergency fund and while im building it i keep it in a mutual fund and once i get it where it needs to be ill put it 😅n a cash management account with in my brokerage account.
Just a note for everyone as far as current spending and checking accounts. If you choose to do this via a Credit Union, (at least in the US) instead of looking for it to be FDIC insured, you'll want to make sure its NCUA insured. Its the same $250k insurance but credit unions are insured by them instead of FDIC. I have had members of the CU i work at not understand this and get scared that credit unions werent safe because they werent aware of the differences. Figured I'd just post this for anyone in that boat!
Thanks for this call out! I often leave this out of my videos but realize I should talk about it once in awhile so that people understand credit union accounts can have deposit insurance too!
NEVER go over your match in a 401k. Use the extra money and put it in an account where you’re putting your pretaxed money in and you are not taxed on the end. Such as a ROTH IRA or a LIRP aka IUL.
Technically interest income from CDs, savings accounts, etc, all have to be reported at certain thresholds and they’re considered taxable income, but I agree, not enough people talk about how it works and how to make sure you make money (passively) and be ready for any taxes…. thanks for the video idea 😉🙏🏽
We put emergency funds in a separate account away from our normal accounts. It’s in a high yield savings account making 4.5%.
🎉🎉 love to hear it
So much beautiful your talks, all the best.
Just found your channel and subscribing! 💜
Yayyy, welcome!!! 🏆✨
I would prioritize getting that employer match ahead of long-term savings, but agree with everything else's order.
Thank you for the video. Either way, I think following this would put most people in a much better financial and lower stress position.
if it’s an option for sure! The employer match is a form of long term savings wouldn’t you say? Thanks for watching!!
Thank you for sharing. This is really helpful.
yes! would love to see how you use YNAB
Okay absolutely! happy to make a video on YNAB, stay tuned!! ☺
An emergency fund should not be placed in a CD as there are penalties to get the money out before the end of the CD term. Money held for emergencies should be liquid and easily accessible quicky. High yield savings accounts, checking, or regular savings accounts are the best places for emergency funds. My preference is a high yield savings account.
You’re right about the penalties! But there are strategies like CD laddering to ensure you always have some money available to you when it’s needed… but I agree, for most people and for simplicity, a high yield savings account does the job 👍🏽
They are CD with no penalties ..
@@alexafernandez5743right! There are sooooo many financial products out there. Just make sure you understand the terms of each one before using it! 💪🏽
I enjoyed your video so much information thanks
Thanks for watching and I hope it was helpful!✨
It was very helpful thank you!!
How about foreign currency account ?is it good for long term savings as this type of account has almost the same interest rate return like the CD?
I like braking this up into four buckets and having sub-sections under the saving things.
Yeah! Do you have any savings accounts that allow sub-buckets?
Showing luv ❤
This is an awesome breakdown!
Great tips. Can you please make a video on ynab?
Love to travel also! Great budget!
For an HSA if at some point in the future, you want to take the money out (not for medical) can you, can you close the account completely, and if you do do you pay taxes at that point?
Yes generally taking money out (not for medical) is a taxable event - and not recommended because the penalty is 20% in addition to ordinary income taxes. For context, that’s a higher penalty than withdrawing retirement account funds prior to retirement. There are some exceptions though. For example if you’re over 65 that penalty no longer applies but you’d still have to pay income taxes. So definitely make sure you understand all the rules before moving money in and out of accounts like the HSA!
Im building my emergency fund and while im building it i keep it in a mutual fund and once i get it where it needs to be ill put it 😅n a cash management account with in my brokerage account.
A lil riskier but whatever works for you!! 👌🏽Do you keep any other emergency funds besides the mutual fund? In case of market fluctuations?
@@wealthforwomenofcolor I just did it that way so it wont be easy to get to and no i dont.Thanks for the information.
hey dear pls do make a ynab video it gets confusing. i prefer the banks with buckets like bmo and capital one buckets and my spreadsheet
Absolutely, thanks for the comment - I'll work on that YNAB video!
Thanks🎉
You are welcome!!! :)
New subscriber here!🎉 do you have a spreadsheet template that you could share to us for tracking our monthly budget and expenses.. thanks a lot!
Welcome!! Yes I do have a template for you all, I’ll be sharing it soon with an upcoming video!
Just a note for everyone as far as current spending and checking accounts. If you choose to do this via a Credit Union, (at least in the US) instead of looking for it to be FDIC insured, you'll want to make sure its NCUA insured. Its the same $250k insurance but credit unions are insured by them instead of FDIC. I have had members of the CU i work at not understand this and get scared that credit unions werent safe because they werent aware of the differences. Figured I'd just post this for anyone in that boat!
Thanks for this call out! I often leave this out of my videos but realize I should talk about it once in awhile so that people understand credit union accounts can have deposit insurance too!
Hello from India! A 52 yo self employed woman, thanks for your video
NEVER go over your match in a 401k. Use the extra money and put it in an account where you’re putting your pretaxed money in and you are not taxed on the end. Such as a ROTH IRA or a LIRP aka IUL.
Because you took your time
Why no one ever talk about CD'S being taxed ,or you have to report them to the IRS ,at the end of the year
Technically interest income from CDs, savings accounts, etc, all have to be reported at certain thresholds and they’re considered taxable income, but I agree, not enough people talk about how it works and how to make sure you make money (passively) and be ready for any taxes…. thanks for the video idea 😉🙏🏽
Why ONLY WOMEN OF COLOUR??
YOU BELIEVE WOMEN OF NO COLOUR?? (WHOEVER THAT MAY BE) ALL KNOW HOW TO MANAGE THEIR MONEY😮
HOLY SMOKES 😵💫
Where did you see the word “only”?? 🤔😂
Florence