Fair enough, I guess there are exceptions to every rule. I’m not here to judge people’s life choices, but honestly you’d have to at least be pretty confident you’ll spend the rest of your life with someone in order for sharing a bank account to be even remotely a good idea. Seems to have worked out for you and your wife though, so that’s nice.
You were smart to save money on the ring. It’s crazy that that’s even viewed as a “cheap option”, even though it’s nearly $1000. But yeah, spending what could be a down payment on a house or a college fund for future children on a ring is a stupid societal norm that should be relegated to the past.
But seriously though, read up on moneymarket savings accounts (at least), as well as certified deposits and mutual funds (if you haven’t already).
Briefly:
A moneymarket account functions like a savings account, but typically has a minimum deposit and a higher yield (maybe 1-2% APY). Often the yield increases by tiers based on how much is in your account.
A CD has a slightly higher yield but it’s illiquid for a set period if time. You might find them offering 2-4% APY, with the agreement that you won’t touch the deposit until the time expires. If you withdraw early you typically lose any interest gained. But they might mature in 6 months, 12 months, 24 months, etc., and you can stagger them.
(Say you make a new CD every three months, well once they start maturing you have one maturing every three months. You can roll them into a new one if you don’t need the money right away, and keep it going indefinitely, but the illiquidity isn’t as big of a problem cause every few months you have a chance to withdraw)
A mutual fund is basically like buying stocks, except instead of buying a share at a company, you buy a share of a fund managed by a professional who buys and sells on the stock market. As such, it’s higher risk than CDs and money market account, but lower risk than actual stocks (because it’s managed by people who know what they’re doing and it’s their job to monitor positions). It’s also more liquid than a CD, there’s typically no long-term commitment. The yields can vary widely (as can anything on the stock market), but typically they’re less volatile than individual stocks, meaning they’re a bit more stable. A well-managed mutual fund can deliver between 5-10% APY fairly consistently. Some might even have specific criteria for their investments, like if you want one that only invests in certified B corporations with good ESG scores (ethical standards, basically).
Basically, if you have more in savings than you need on hand for recurring expenses, emergencies, and specific things you’re saving up for, you should find some higher-yield account types to put the rest in based on your needs and risk tolerance. But even your emergency savings could probably be in a moneymarket savings account because it probably meets the threshold for a somewhat higher yield.
It’s not so much about accidentally spending too much, it’s more that checking accounts and regular savings accounts yield a fraction of a percentage as interest, which when adjusted for inflation means you’re actually losing money with it just sitting there.
Fair enough, I guess there are exceptions to every rule. I’m not here to judge people’s life choices, but honestly you’d have to at least be pretty confident you’ll spend the rest of your life with someone in order for sharing a bank account to be even remotely a good idea. Seems to have worked out for you and your wife though, so that’s nice.
You were smart to save money on the ring. It’s crazy that that’s even viewed as a “cheap option”, even though it’s nearly $1000. But yeah, spending what could be a down payment on a house or a college fund for future children on a ring is a stupid societal norm that should be relegated to the past.
But seriously though, read up on moneymarket savings accounts (at least), as well as certified deposits and mutual funds (if you haven’t already).
Briefly:
Basically, if you have more in savings than you need on hand for recurring expenses, emergencies, and specific things you’re saving up for, you should find some higher-yield account types to put the rest in based on your needs and risk tolerance. But even your emergency savings could probably be in a moneymarket savings account because it probably meets the threshold for a somewhat higher yield.
It’s not so much about accidentally spending too much, it’s more that checking accounts and regular savings accounts yield a fraction of a percentage as interest, which when adjusted for inflation means you’re actually losing money with it just sitting there.