Four Accounts You Need, Four Accounts You Don't

It’s easy to manage your finances when you close unnecessary bank accounts and credit lines and chisel down to the bare essentials. Blueprint For Financial Prosperity has compiled an excellent list of accounts that you need, and accounts you should avoid.

Accounts To Have

  • High Yield Savings Account: These fully-liquid accounts can earn 4% APY, often more, without any risk.
  • Checking Account: Necessary for paying your bills and making ATM withdrawals. Blueprint For Financial Prosperity thinks the two should be separate: a checking account with a credit union, and an ATM account with a major bank – but we prefer to keep the two together.
  • Retirement Account: Roth IRAs are the best way to save for retirement, unless your company offers a 401k matching program.
  • Credit Card: Yes, you should have a credit card – one that offers rewards and a low APR – that you religiously pay off each and every month lest you undermine your other financial planning efforts.

    Accounts To Avoid

    • Store-branded cards: The APR on most store-branded cards outweighs any short-term benefit, like: “10% off today’s purchase!”

    • Finance Accounts: Don’t buy appliances on the installment plan. If you need a loan, go to your bank.
    • Additional Checking or Savings Accounts: Unless you are approaching the FDIC insurance ceiling, stick with one bank.
    • Reward-less Credit Cards: If no reward programs match your needs, choose a card that offers cash back; just don’t miss out on the fun altogether.

    Five Accounts You Absolutely Must Have (And Four You Don’t) [Blueprint For Financial Prosperity]
    (Photo: edwaado)