Surely you expect to have more than $250,000 in cash at some point in your life? Be bold! Be brave! Expect success!
Even if you have less, way less, than $250,000, you need a second and/or third place to park your money. This new bank/credit union/S&L might offer different services. Bill pay, for example. Some behind-the-times financial institutions charge you for bill pay. Forget it! If you can’t get it at no charge whatsoever, go somewhere else.
Ah, now you see why you need more than one financial institution. Bill pay is the greatest invention known to man, right after Quicken or some other financial software. They make your financial life easy and help you understand exactly where you are at any given time.
But wait! There are more reasons for having more than one financial institution. You’ll be able to triangulate – comparing qualities and talents at the two (or more) institutions where you keep your cash. Check the appearance of the lobby, the skill and knowledge of the bank tellers and officers, degree of informality among the officers – do you feel comfortable at the annual meeting?
Don’t borrow money, ever, but you may want to have one credit card for online shopping, hotel reservation guarantees, etc. As long as you pay it off, religiously, every month, meaning keep a zero balance except for the month’s charges, you’ll be okay.
If you miss one month, you’ll see right away how right IFO is about this advice. The charges the banks tack on are absolutely outrageous.
Also, keep track of minimum balance requirements for your accounts. We’ve been caught once or twice and again, we were shocked at how high the charges were. They often wipe out all the tiny amount of interest you may have earned for the year.
That’s it for simple cash-keeping financial institutions. We’ll tackle the more complex issue of keeping cash at your brokerage next time – Thursday. Tomorrow is the Fourth of July! Pancake breakfast! Street sales! Music! Parade! Fireworks! Maybe even reading the U.S. Constitution.