Do you want to learn an Easy Way To Save Money? When I was a kid my mother had several stainless-steel food canisters. One contained flour. Another contained sugar. Another contained rice. And there was a small one that always had a few bags of Lipton tea. But in addition to these four food canisters there were two more stainless-steel canisters. Each of the two had a few bills that were rolled-up in a rubber band.

In one of the stainless steel canisters my mom saved money for what she referred to as a “rainy day.” In the other canister, my mom saved money to buy something for herself, my sister or for me – especially for birthdays or Christmas.

I’ve heard of other people say that their mother or grandmother used a similar technique to save money. Some used cookie jars, some used large Hellman’s mayonnaise jars and others used envelopes that were labeled with what the savings or contents of the envelope were to be used for. For example grocery shopping, rent or summer vacation.

I still use this savings-technique that I learned from my mom. But instead of using stainless-steel canisters or cookie jars to save my money, I use separate banking accounts. The accounts  I currently have are:

  • Vanguard Investment or Retirement Account
  • Main personal checking account at Chase
  • Personal brokerage account with Charles Schwab
  • Online High Yield Savings Account for Apocalyptic Fund

In addition to my Vanguard investment or retirement account, I have a primary checking account with Chase. That’s where my company automatically deposits my bi-weekly pay. Because of the fees that Chase charges its customers for withdrawing money from non-Chase ATMs, I have a brokerage account with Charles Schwab.

Although my account at Charles Schwab is called a brokerage account, it functions a lot like a   regular checking account. It has an ATM or debit card linked to it. I can deposit checks into my Charles Schwab brokerage account by taking a picture of a check using my mobile device. And if I like, I can also enable check-writing privileges with my Charles Schwab brokerage account. And Charles Schwab doesn’t charge any minimum fees to have a brokerage account.

You may be wondering if a Charles Schwab brokerage account is so great and it does everything that my Chase checking account does why do I still have a personal checking account with Chase?

Well, Charles Schwab is an online bank. So if I have cash to deposit into my Charles Schwab account, there’s no way to deposit it directly into my Charles Schwab account. I also have my business checking accounts at Chase. I have banked at Chase for over 25 years and that has helped me to establish business relationships with some of the bankers at Chase. And if you have a business – whether it’s an online business or offline business – it’s always beneficial to have a good relationship with a banker.

For my fourth account or my Apocalyptic fund, I use a high yield online savings account. Ahigh-yield online savings accounts is a type of savings account that pays higher interest rates than a traditional savings accountyou’d find at your typical brick-and-mortar financial institution. 

What this essentially means is that you’ll earn more on the money from your savings account which will enable you to achieve your savings goals faster. Besides the higher interest rates that high-yield savings accounts offer, these accounts usually do not have monthly fees. Your money is also safe in this type of a savings account – since the FDIC or Federal Deposit Insurance Corp insures your money up to $250,000.

To give you an idea of the difference between having a savings account at a traditional brick and mortar bank vs. an online high-yield savings account, at the time of recording this course, Chase is offering an APY or Annual Percentage Yield of 0.01% on its savings accounts.  However, there are online banks offering APYs or annual percentage yields of 1.70%. So there are online banks offering annual percentage rates that are 170 times more than what traditional offline savings accounts are offering.

Let’s talk about some of the things you’ll need to consider before selecting an online bank for a high-yield savings account. The most important factor that you’ll need to consider is APY or Annual percentage yield. The higher the better.

But you’ll also want to take into account whether the banks hasa minimum deposit requirement. You’ll also want to consider whether the bank has a minimum balance requirement. And if the bank does have a minimum deposit requirement or minimum balance requirementare these minimums within your financial means.

Considering that high-yield online savings accounts help accelerate the growth of your money, they’re not only great for funding your apocalyptic fund, but you can also use a high-yield online savings accounts to save up for big ticket items. Such as the down payment for a home, the down payment for a car, your wedding, a family vacation, furniture, and if you’re self-employed you may even want to use a high-yield online savings account as an account for your estimated taxes.

If you use a high-yield online savings accounts to fund any of the above, don’t forget to use the canister-method that we learned about earlier in this lesson.

You’ll want to keep your apocalyptic fund separate from the account that you’re using to save for the down payment on your home. And you’ll want to keep the online savings account that your using to save up for your wedding separate or family vacation separate from the online savings account you’re using to save up for the down payment on your next car. .

By having the accounts separate it makes it a lot easier for you to track the progress of your saving goals and avoid inadvertently mingling the funds. 

Click here to read “How Do I Save For An Emergency Fund.”