Don’t put all your eggs in one basket! This phrase has been kicked around for a long time. Well this is one expression I don’t mind recycling and you shouldn’t either. I am by no means a millionaire but I have studied them. One thing they all have in common is a diversified portfolio. A portfolio doesn’t just have to be stocks or bonds in a company. I diversify the number of places I keep my money as well. I have my typical checking and savings account at my local credit union, then I have a coin jar, a cash box, a treasury account and a 401k from work.
- Checking and Savings Account
This is where the brunt of my money is stored. My paycheck is deposited directly into my checking account. I transfer $150 right off the top to savings and only leave the amount for monthly expenses and withdraw the rest. This savings account is for my 3-6 months of savings everyone needs in case they were to become unemployed or fall ill.
- Coin Jar
I started my coin jar after I realized people will leave a dime or penny just lying on the ground. As if dime’s and pennies aren’t real money. Well it’s real to me and I intend to pick up every piece of change I find. Whenever I use cash for purchases and the cashier hands me back change I don’t spend it. I put it in my coin jar. It doesn’t matter if I need .05 cents and I hand the clerk a dollar. The rest of the .95 cents is going into my jar. Trust me coins add up quickly. $$$
- Cash Box
I started my cash box after I realized I won’t always have access to my bank account. What if I needed money in an instant and didn’t have time to go to an ATM or the banks were failing? You need at least $200 cash at home tucked away where you can get to it in an instant. This money is for those unexpected flat tires, medication refills, pop-a-lock, etc. Plus if there were to be a state of emergency and I needed to evacuate I wouldn’t have to make any unnecessary stops to try and secure money and belongings.
The 401k is a little different. I can pull it out for big purchases, but it will be treated as a loan and I would have to pay myself back. Plus, if you pull out money before retiring age there is a penalty and it’s taxable. I contribute the maximum amount that my company matches (but put in what you can 🙂