Reader Question: Where Can I Put My Money That Is Safe But Will Still Earn Interest?  

Today I have another great reader question for you. Remember, if you have any questions you can send them to me using the Ask Ali form. I’d love to hear from you!

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Here’s the question: I have money set aside in a “rainy day” fund. That money is not earmarked for any future down payment on a house, a new car, or vacations, etc. It’s just going to sit there in case I ever need it someday. Where should I put that money? Right now I have it all in an index fund. It makes me a little nervous in case there is a stock market crash. I really don’t want to lose that safety net I’ve created. However, if I were to put it all in a safe savings account it won’t make any interest and thus effectively lose value over the years. Thoughts?

This is a great question, and one I myself struggle with. How do you reconcile safety and getting a decent return? Traditional savings accounts are currently offering abysmal returns (I have a Bank of America account, which currently offers 0.01% interest – ouch!). The stock market has been seeing good returns, but we all know how risky the stock market can be, especially if you’re unsure about your investment time horizon.  CDs are an option, but the current APYs aren’t great and it feels risky to tie your money up for any length of time.

This brings me to two good options for savings: money market accounts and online savings accounts. Please note that all interest rates are current as of this writing, but interest rates change fast so make sure to check current rates. Continue reading

Reader Question: Is it OK to Have Multiple Credit Cards to Take Advantage of Rewards Offers?

In case you missed it, I recently added an “Ask Ali” feature to the blog! I would LOVE to answer your personal finance questions. No matter how big or small, if you’re wondering, chances are someone else is too!

Today I’ll share a question from a reader regarding credit cards. The reader asks: “I’m curious to know your opinion on having multiple credit cards to make the most of their respective cash back/reward offers.”

Luckily, I have LOTS of thoughts on the subject, so let’s dive in! Continue reading

The “Cost” of Your Time

A dear friend recently asked a personal finance-related question that has often plagued me: what is the cost of my time? Or, put another way, what is the value of my time?

This is a tricky question with an even less straight-forward answer than most personal finance questions. I could go with the age old “it depends.” And it does depend. It depends on what each individual person values and the resources that each individual person is working with.

Today, I’ll put aside the “it depends” cop-out and try to elucidate my thoughts on how to value time. Continue reading

Should I Buy A Car or Use Car-Sharing Services? Part 1

Recently a friend mentioned that he is thinking of buying a car. He lives in Cambridge, like me, and does not currently have a car. He relies on walking, transit, and various car or ride sharing services to get around. My immediate reaction was to say “don’t do it!” My gut told me that it would inevitably be more expensive to buy and maintain a car than take Uber or rent a Zipcar, even if you took Uber or rented a Zipcar every time you had the slightest inkling to do so.

I thought that I should run some numbers and really test this theory out. I’m sure that many people living in urban areas have had this debate with themselves. To own a car or not to own a car, that is the question!

This exercise turned into a LONG post, so I’ve broken it into three pieces so as not to overwhelm anyone. Today, I will share my analysis of what it costs to own a car. Tomorrow, I’ll post my analysis of the costs of car sharing and cab services, and finally on Saturday I’ll share some additional considerations that I think should factor into the decision to buy a car.

It is worth noting that I do own a car, even though I live in the city and have good transit access. As with everything, the decision to own a car is a personal one, and just doing what the numbers say isn’t always the right choice. Continue reading