Tip 2: Open A Separate Account

If you followed my previous advice and found a way to get paid to do something, then you should have some extra cash now. It’s sitting right there in front of you, tempting and teasing you. You start thinking about all of the things you’ve been wanting to buy, and now you can.

STOP!

This is where my second tip comes in – discipline.

To make it easier for me to resist these temptations, I’ve opened a separate account to store the money that I earn. Since I’m still in school, my loans are in deferment, so I’m storing the money in a high-yield savings account until I have to start making payments. This gives me the following benefits:

• Easier to track – it’s not mixed with my spending money, so I just have to look at the balance on the account to see how much I’ve saved up to pay back.
• Easier to resist splurges – keeping this money separate will keep my spending account balance lower, making it less likely for me to purchase things I don’t really need.
• Earn more money – since the money will be sitting in a high-yield savings accounts, I will earn additional interest without having to do any extra work.
• Just in case – this money is still readily available in case an unexpected emergency comes up (auto, medical, etc.)

For my high-yield savings account, I opened an Orange Savings Account at ING Direct which currently has a 4.20% APY. Compared to other high-yield savings accounts, the APY is on the lower end, but ING makes up for it with a great referral program. If you open an account with $250 or more with a referral from me, then YOU GET $25, and I only get $10. That’s right, you actually get more out of it than I do.

If you’d like a referral, let me know!

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