This Is the Best Way To Save Money in 2024

[Music] brought to you by the every dooll app start budgeting for free today John it's time for our long running segment Talk Nerdy To Me man um I just want to know your thoughts just on that alone I just we've been traveling a lot and uh there's many of nights you and I are driving late nights you know to an airport or to a speaking gig and you're like John Talk Nerdy to Me and we get into it ah yeah we do and that's what we do on the we're going to make it a segment we're going to explain a financial concept that maybe you've never you know thought about all that much or you hear it and you go I think I know what that is and I try to pretend when I'm at a party that I know cuz when you're at parties what you talk about John is don't say it because I got a tip a clip to tease it you ready let's do it let's see if you can guess America based on this clip from Seinfeld I'm not an investor people always tell me you should have your money working for you I decided I'll do the work I'm going to let the money relax you know what I mean cuz you send your money out there working for you A lot of times it gets fired you go back there what happened I had my money it was here it was working for me yeah I remember you're a money showing up late taking time off we had to let him go Ah that's good stuff John that's gold Jerry is that any good to you no okay well John what we're talking about today is not investing it's the cousin of investing which is savings so there's a big difference savings think short-term investing think longterm and the the word of the day is high yield savings accounts or H YSA Talk Nerdy To Me George what is a high yield savings account so it's this one's kind of what it sounds like it's like automonopia I think that's what that is uh a high yield savings account has a higher yield higher interest than a traditional savings account so let's talk about those numbers a traditional savings account the average you'll get is. 46% in interest on your balance which is not even a half a percent high yield savings accounts we're we're seeing you know some record numbers here John at four or five% that you're getting on your money so you have $100,000 sitting in there if that balance just sat there over those 12 months you would make $5,000 which is pretty sweet for doing nothing MH and so we talk about having your money work harder for you and that's why I recommend people store their emergency funds their big savings like a home down payment you're saving up for a car because once you get that ball rolling it's nice to make a little bit of dough so the goal here is not to make 10 20% we're not investing this is for shortterm goals think one year two year three year four year goals a high yield savings account is a great place on top of your emergency fund and what you're going to see is this word apy annual percentage yield so 10,000 and a high yield savings account at 5% apy that's 500 bucks in interest at the end of the 12 months it's that simple and so with a traditional savings account at 0 46% you get a measly $46 a year versus you know the 500 and so that's why I recommend those high yield savings accounts it's a great place to store those things like the emergency funds syncing funds but again this is not a long-term investment strategy so do not think that you're investing by putting money into this type of account and if you're spooked by the stock market people go well I'll just put in savings well you're going to hopefully maybe keep up with inflation at that rate but your money is not going to grow so longterm think five plus years you want to invest into the market into your 401k Ira brokerage account short-term high yield savings so just practically speaking here's a couple of ways I've used high yield savings accounts when my wife and I were saving for house and we we were basically was a syncing fund but it was where we put a ton of money for our down payment we went put a huge chunk down we used a high old savings account and we did I looked up after 18 months I couldn't believe how much interest we'd made it was remarkable yes um also I use a high yield savings account for um I pay my my taxes and insurance and lump payments every year and so I basically pay a bill every month but I put it into that high yield savings account so it earns money over the course of the year and at the end of the year I'm never surprised by something right um and so those are two ways that we just use it in the delony household and if you're wondering well how are they able to offer these well they're generally offered by online banks which have lower overhead because they don't have to create a thousand brick and mortars and hire a bunch of people they can be a little more Nimble and they can pass the savings on to you so that's where you're going to see these uh recently John I partnered on my YouTube channel with a company called Laurel Road a great online bank and uh they've got a apy right now is 5.15% which is impressive and so if you guys want to check that out this is not like a sponsored segment I just am a fan of what they do lurel road.com Jorge you can check it out and John you use probably a different account for your yeah my smart Vestor Pro uh Craig with Swan wealth management he uh put me in Cambridge Stone Castle it works it's it's been in that in that range it's probably around 5% yeah give or take and don't go chasing like oh this account don't go chasing waterfalls and don't go chasing the spread because you found another company that offers a point 05% higher rate than you were getting the juice ain't worth the squeeze there uh but the key is don't go with one of these scummy companies that are like part of like Sofi or Capital One you're seeing a lot of these debt companies start to offer high yield savings accounts as a gateway drug to get you into their you know grimy little grubby fingers don't do that so you know there's some credit unions out there that have some great high yield savings Ally I think is one that Jade and Rachel have used I use Laurel Road and John uses a different one the key here is it keeps your money safe you want to make sure it's FDIC insured which means your deposits if the bank collapses you're going to keep your money safe up to 250 for a single person per ownership category or 500,000 if it's a joint account and the other thing is watch out for monthly maintenance fees so that's one thing I love about Laurel Road no monthly maintenance fees no you know heebie GB minimum balance require IR ired here you don't have to worry about that so those are some of the things to look out for we've got a great blog article on this we're going to link it in the show notes if you want to learn more about high yield savings accounts create your free every dooll budget today the simplest way to budget for your life