Results tagged “banking” from iVillage - House Calls
If you're shopping around for a bank, you may be wondering how to decide which one is the best place for your money. The good news is that as long as the bank or credit union you choose is backed by the FDIC or National Credit Union Administration, your money will be safe even if the bank fails. The bad news, however, is that rates and fees can vary widely from bank to bank, so you'll need to shop carefully to get the best return. CNBC personal finance expert Carmen Wong Ulrich has some tips for finding the right bank for you.
Find more information on coping with the economy with our Bail Yourself Out resources.
This week, Tracy Davidson, consumer reporter for WCAU in Philadelphia, answers the question of whether your money is safe in the bank and in your 401(k).
Is Your Money Safe?
by Tracy Davidson
iVillage user thegymmom asks: Are we truly in trouble? Should we take our money out of the bank and hide it? Is it as scary and dire as the media is predicting? Or is it all hype, just another way to help the rich keep their money?
Are We In Trouble?
First, we truly are in trouble, for a number of reasons. Fortunately or unfortunately, our economy runs on credit. The credit markets are frozen, which basically means that banks have stopped lending money to each other and to major customers. And that trickles down. Small businesses depend on credit; some use it to make payroll. Consumers need credit to buy homes, cars and make purchases. We are all impacted by this crisis, so it needs to be solved.
Should We Take Our Money Out of the Bank?
But I really want to address your second question about taking your money out of the bank and hiding it. No, no, no! Here's why:
The money in your bank is safe! If your bank is FDIC insured, your money is insured. What does that mean? The FDIC insures accounts up to $100,000 per depositor, per insured bank. So if the bank fails, your money is still safe. If you have more than $100,000 in the bank, the bill that passed the senate Wednesday night would raise that insurance to $250,000.
What About Your 401(k)
You also shouldn't stop contributing to your 401(k). The markets are volatile right now and I know people are panicking, but don't. Your 401(k) money could be your greatest retirement asset, so it's important to keep it intact. The match of money provided by your company more than makes up for any hits you're taking right now in the market. It's free money!
When it comes to your 401(k), the best thing you can do is make sure your asset allocation is right for your financial plan. Do you have the right amount in stocks versus mutual funds and bonds? If you're not sure, ask your HR department to explain it.
Finally, whatever you do, don't take money out of your 401(k), because you'll be penalized for it. If you really need money, find another way to get it. If you think there is no other way, seek professional financial advice before you touch your 401(k).
Lessons Learned?
What can we, as individuals, learn from all of this? That it is dangerous to live on credit. We live in a world—or we did—where we could buy a house bigger than we could really afford, where we could buy a car that was nicer than we could afford, or where if we didn't save, we just said, "credit card." It's a dangerous way to live. Remember the days when, if we wanted something, we actually planned and saved until we had enough money? That's what we need to get back to.
Check out All That & More with Tracy Davidson.
Read more of Tracy's blog posts.
Is Your Money Safe?
by Tracy Davidson
iVillage user thegymmom asks: Are we truly in trouble? Should we take our money out of the bank and hide it? Is it as scary and dire as the media is predicting? Or is it all hype, just another way to help the rich keep their money?
Are We In Trouble?
First, we truly are in trouble, for a number of reasons. Fortunately or unfortunately, our economy runs on credit. The credit markets are frozen, which basically means that banks have stopped lending money to each other and to major customers. And that trickles down. Small businesses depend on credit; some use it to make payroll. Consumers need credit to buy homes, cars and make purchases. We are all impacted by this crisis, so it needs to be solved.
Should We Take Our Money Out of the Bank?
But I really want to address your second question about taking your money out of the bank and hiding it. No, no, no! Here's why:
The money in your bank is safe! If your bank is FDIC insured, your money is insured. What does that mean? The FDIC insures accounts up to $100,000 per depositor, per insured bank. So if the bank fails, your money is still safe. If you have more than $100,000 in the bank, the bill that passed the senate Wednesday night would raise that insurance to $250,000.
What About Your 401(k)
You also shouldn't stop contributing to your 401(k). The markets are volatile right now and I know people are panicking, but don't. Your 401(k) money could be your greatest retirement asset, so it's important to keep it intact. The match of money provided by your company more than makes up for any hits you're taking right now in the market. It's free money!
When it comes to your 401(k), the best thing you can do is make sure your asset allocation is right for your financial plan. Do you have the right amount in stocks versus mutual funds and bonds? If you're not sure, ask your HR department to explain it.
Finally, whatever you do, don't take money out of your 401(k), because you'll be penalized for it. If you really need money, find another way to get it. If you think there is no other way, seek professional financial advice before you touch your 401(k).
Lessons Learned?
What can we, as individuals, learn from all of this? That it is dangerous to live on credit. We live in a world—or we did—where we could buy a house bigger than we could really afford, where we could buy a car that was nicer than we could afford, or where if we didn't save, we just said, "credit card." It's a dangerous way to live. Remember the days when, if we wanted something, we actually planned and saved until we had enough money? That's what we need to get back to.
Check out All That & More with Tracy Davidson.
Read more of Tracy's blog posts.
