Best ways to save money right now?

My husband and I have a small baby, and we want to start setting aside money for future needs like college tuition, driver's ed, and so on. We are looking at roughly $67 per month. What would be the most effective way to save? A dedicated child's savings account, a life insurance policy, or perhaps a housing fund if they allow such small monthly contributions?
I am looking for recommendations.
thanks🙂

driftinggull21 said:My husband and I have a small baby, and we want to start setting aside money for future needs like college tuition, driver's ed, and so on. We are looking at roughly $67 per month. What would be the most effective way to save? A dedicated child's savings account, a life insurance policy, or perhaps a housing fund if they allow such small monthly contributions?
I am looking for recommendations.
thanks🙂

Back in the day, I opened a housing savings account for my kid before the interest rates took a dive. Now, I just put money into a standard kids' savings account throughout the year, and then once a year, I dump a chunk of it into the housing fund to hit the maximum amount allowed for those tax breaks...☕

I’ve been scrolling through various threads on this sub lately, and while I plan to keep digging for info, I figured I’d throw out a few questions first.

So, last year my wife and I bought an apartment. We used a mix of our own savings and a fixed-rate mortgage with a monthly payment we could actually live with.

We still have a certain amount sitting in a housing savings account at Zions Bank—that was a requirement to unlock their preferred action credit.

Even though my wife took a pay cut during the recession (I wasn't working a 9-5 back then), keeping our debt obligations low and cutting back on spending kept us in the black. Our financial situation is steady now, but we're still in recovery mode and continuing to furnish the place.

At my new job, the pay is decent and I’ve finally started seeing a surplus at the end of the month. Some of that goes toward home improvements, but I'm looking for options centered around two main goals:

a) Short-term savings—looking at a one to two-year window—essentially building up enough to, say, put a down payment on a reliable new car rather than some junker.

- For something like that, would I be better off with a standard savings account, investment funds, or something else entirely? Ideally, I want the flexibility to fluctuate my monthly contributions.

b) Starting to build a reserve and establishing a level of financial security that can eventually be repurposed for other things.

- In this case, I’d probably stick with the housing savings route.

Does this all make sense, or am I completely off base here?
Thanks for any insight.

If you’re looking at the short term, I guess you might just want to stick your money in a high-yield savings account at one of the major banks. It feels like the safest bet, really.
But if you're thinking long-term... maybe look into a housing savings plan? That could be an option.

goldenwolf13 said:If you’re looking at the short term, I guess you might just want to stick your money in a high-yield savings account at one of the major banks. It feels like the safest bet, really.
But if you're thinking long-term... maybe look into a housing savings plan? That could be an option.

It’s funny how differently people define "long-term."🙂 To me, long-term means 20 years, whereas five years still feels pretty short-term...🙂

Anthony Cox5 said:I’ve been scrolling through various threads on this sub lately, and while I plan to keep digging for info, I figured I’d throw out a few questions first.

So, last year my wife and I bought an apartment. We used a mix of our own savings and a fixed-rate mortgage with a monthly payment we could actually live with.

We still have a certain amount sitting in a housing savings account at Zions Bank—that was a requirement to unlock their preferred action credit.

Even though my wife took a pay cut during the recession (I wasn't working a 9-5 back then), keeping our debt obligations low and cutting back on spending kept us in the black. Our financial situation is steady now, but we're still in recovery mode and continuing to furnish the place.

At my new job, the pay is decent and I’ve finally started seeing a surplus at the end of the month. Some of that goes toward home improvements, but I'm looking for options centered around two main goals:

a) Short-term savings—looking at a one to two-year window—essentially building up enough to, say, put a down payment on a reliable new car rather than some junker.

- For something like that, would I be better off with a standard savings account, investment funds, or something else entirely? Ideally, I want the flexibility to fluctuate my monthly contributions.

b) Starting to build a reserve and establishing a level of financial security that can eventually be repurposed for other things.

- In this case, I’d probably stick with the housing savings route.

Does this all make sense, or am I completely off base here?
Thanks for any insight.

Money market funds seem to be climbing pretty steadily, and they don't really deal with those crazy crashes you see with bond or stock funds, maybe seeing something like a 6-9% bump monthly. Plus, there aren't any entry or exit fees to worry about. I guess you can pull your cash whenever you need it, but the interest rate is still probably better than anything you'd find in a standard savings account or a CD.

David Jackson4 said:Money market funds seem to be climbing pretty steadily, and they don't really deal with those crazy crashes you see with bond or stock funds, maybe seeing something like a 6-9% bump monthly. Plus, there aren't any entry or exit fees to worry about. I guess you can pull your cash whenever you need it, but the interest rate is still probably better than anything you'd find in a standard savings account or a CD.

Please show me this money market fund with a 6% monthly return. Thanks.

David Jackson4 said:Money market funds seem to be climbing pretty steadily, and they don't really deal with those crazy crashes you see with bond or stock funds, maybe seeing something like a 6-9% bump monthly. Plus, there aren't any entry or exit fees to worry about. I guess you can pull your cash whenever you need it, but the interest rate is still probably better than anything you'd find in a standard savings account or a CD.

Yeah, right. Even Chase was seeing returns around 0.61% back in 2009. 🙄Those days of "massive" money market yields are long gone...

David Jackson4 said:Money market funds seem to be climbing pretty steadily, and they don't really deal with those crazy crashes you see with bond or stock funds, maybe seeing something like a 6-9% bump monthly. Plus, there aren't any entry or exit fees to worry about. I guess you can pull your cash whenever you need it, but the interest rate is still probably better than anything you'd find in a standard savings account or a CD.

OMG, so that’s at least 72% annually! 😉 Since Zions Bank money markets were sitting at a measly 0.61% back in 2010, it is high time they actually started delivering some real returns.😎

That works out to at least 101.2% annually! Honestly—even hitting the jackpot in the Powerball wouldn't be a better bet than this.

I don't really have anything to say right now, I guess. Just hanging out. kaže:
Could you please show me that money market fund offering a 6% monthly return? Thanks!

James Rogers53 said:Yeah, right. Even Chase was seeing returns around 0.61% back in 2009. 🙄Those days of "massive" money market yields are long gone...

brightranger52 said:OMG, so that’s at least 72% annually! 😉 Since Zions Bank money markets were sitting at a measly 0.61% back in 2010, it is high time they actually started delivering some real returns.😎

Nicholas Turner said:That works out to at least 101.2% annually! Honestly—even hitting the jackpot in the Powerball wouldn't be a better bet than this.

My bad everyone, just a slip of the tongue.
I mean, I guess you could see money market funds pulling in maybe around 6-9% annual returns these days.
I mean, I was just crunching some numbers earlier, and I guess it's possible you guys could actually be pulling in way more cash if, you know, you did things a little differently. $17 They kept that money sitting in a money market fund for a whole year, which honestly ended up being way better than any interest rate you could find at any bank here in the States.

For instance:

CERTIFICATE OF DEPOSIT

Maturity date 3/15/2011.
Type standard
Principal $50,000.00
Total interest 2,557.16
Balance 52,557.16

ERSTE MONEY MONEY MARKET FUND

Fund currency: USD Initial share price: 100.00
Investment start date 1/1/2009.
Share price at start of period USD 125.10
Investment end date 12/31/2009.
Share price at end of period USD 133.80
Payment amount USD 50,000.00

Number of days held 364
Return for holding period 6.95%
Annualized return 6.97%
Number of shares purchased 399.6803
Value of shares at start of period USD 50,000.00
Value of shares at end of period USD 53,477.22
Profit (USD) 3,477.22

BANK OF AMERICA MONEY MARKET FUNDS

Bank of America Money Market Fund* 129.85 0.02% 3.73% 7.55%
Bank of America Euro Money Market Fund* 122.69 0.02% 7.00% 5.27%

And who’s actually guaranteeing I’ll walk away with more than what a standard savings account offers?

Those kinds of money market returns were a fluke—they won't stay that high for long. This year, we're probably looking at maybe 4-5%, and that's about it. Not a bad spread, I guess, especially since you can pull your cash out or toss more in whenever you feel like it.

James Rogers53 said:And who’s actually guaranteeing I’ll walk away with more than what a standard savings account offers?

Those kinds of money market returns were a fluke—they won't stay that high for long. This year, we're probably looking at maybe 4-5%, and that's about it. Not a bad spread, I guess, especially since you can pull your cash out or toss more in whenever you feel like it.

Just looking at the stats for money market funds since they first launched.
Banks have been cutting mortgage rates lately—well, some of them, anyway, though I don't have a mortgage myself so I couldn't say for sure—but they've been dipping savings rates too.
When it comes to investing in these funds, banks don't really have that much sway over them (if they even have any impact at all), and basically all money market funds have shown steady returns since they started.

Bank deposits and savings accounts are state-guaranteed up to $133, whereas mutual funds don't offer any such protection

Paul Hernandez6 said:Bank deposits and savings accounts are state-guaranteed up to $133, whereas mutual funds don't offer any such protection

True, but let's be real—no money market fund has ever actually gone negative, let alone completely collapsed. On the flip side, we've seen banks fail along with everyone's savings... people end up just waiting for those guaranteed amounts to be paid out, minus interest—which is still a loss in my book. Just look at what happened back with Bank of Osijek and companies like that...

Paul Hernandez6 said:Bank deposits and savings accounts are state-guaranteed up to $133, whereas mutual funds don't offer any such protection

Do you honestly believe the government would even have the liquidity to bail out a major player like Bank of America or Chase if they went under? 🤷

Money market funds have seen dips—a handful of times since they were established—but we're talking about daily fluctuations measured in fractions of a percent. Given their investment strategies, I’d call them incredibly secure, regardless of whether the federal government is backing them or not. 🤷

Steven Reed said:Do you honestly believe the government would even have the liquidity to bail out a major player like Bank of America or Chase if they went under? 🤷

Money market funds have seen dips—a handful of times since they were established—but we're talking about daily fluctuations measured in fractions of a percent. Given their investment strategies, I’d call them incredibly secure, regardless of whether the federal government is backing them or not. 🤷

Yeah, I guess they do...

goldenwolf13 said:Yeah, I guess they do...

...credit 🙂

Not necessarily!!
They have enough factories, land, and other real estate assets on hand that they could probably take on this kind of debt another two times over without breaking a sweat...