I was perusing some financial websites and saw an ad for a WTDirect Savings Account with 5.15% APY. That’s the highest rate I have seen lately. Curious as what the catch was, I went to the website to check it out. Indeed the rate was 5.15%. If after 60 days your account balance is at least $10,000 you will continue to get that rate. If not, your rate drops to… drum roll please… 0.60% APY! Is that a typo? Did they forget a 4 or maybe even a 3? What’s the benefit of using their bank vs. my local bank? I guess they are banking on (no pun intended) people who don’t read the fine print.

I have two checking, two savings, and one money market account. Is that too much?

In an effort to organize my finances, I recently opened some new accounts with Citibank. I have a checking account at a local bank, but I wanted a high yield savings and second checking account to pay my regular bills. I figure if the money is direct deposited each month and the bills are automatically paid, I will do a better job budgeting and have less to worry about.

I opened an “EZ Checking” package that included a regular checking account and an Ultimate Money Account (UMA). These accounts are linked, and as long as I make at least two bill payments per month, there are no fees. In addition, the UMA earns 5.10%APR, which I believe is the highest online rate at the moment. If I do not make two bill payments in a month, the rate falls to 4.50% for that month, which still isn’t bad. (The rate will go back up the month in which at least two bills are paid.)

Since my intent was to use the checking account to pay my regular bills (rent, car payment, car insurance, phone) I will have no problem maintaining the higher rate. I just started using the accounts so I’m working out the details. Right now my paycheck is deposited into my local bank account. So I made a withdrawal to cover the bills and deposited it into the UMA. As I pay the bills, I will transfer money into checking (perhaps automatically in the future). This way I can maximize interest earned. Once I get this method perfected I will change my direct deposit to put a portion of each paycheck into the UMA. (Alternatively, I could transfer the money on Citibank’s website from my local bank to my UMA.) I prefer direct deposit because the less money I see, the less money I’m likely to spend. When I determine the amount I need in order to pay all my regular bills for one month I will divide it in half and have that amount plus a little extra directly deposited each paycheck. This way I can save some money automatically. Plus, I get paid every other week, so twice a year I get an “extra” paycheck. This will equate to an extra deposit into my savings.

I’m trying to cut back on spending. I don’t make a lot or even a few big ticket purchases. I just make a lot of little ones. I used to get fast food a few times a week, telling myself, “it’s only five bucks” or “I’m too tired to go home and cook” or “you deserve a little treat.” In all honesty, I didn’t deserve a treat and how much of a treat is fast food anyway? I don’t really enjoy it. I prefer to eat healthy but sometimes I don’t feel like putting forth the effort. I know in the long run I’ll be happier and healthier if I don’t listen to that voice in my head. Lately I’ve been giving myself a virtual slap on the wrist. Whenever I think I “need” something, I scold myself for thinking it and give myself a pep talk, “you’ll be happy you passed on it when you start seeing an improvement in your financial situation.”

It’s time to get serious about my finances and get out of the negative and into the positive. I never had anyone teach me about money and I’ve been learning as I go. I’ve made numerous bad decisions and got myself into debt. There was a time when I thought I would have to declare bankruptcy but I promised myself I would never do that. My mother met that fate and I do not want to follow in her footsteps. My income has increased over 20% in the last two years and yet I still live pay check to paycheck. This should not be the case. I know I can do better…