Christien Louviere

The perceived recession is over hyped. A recent Business Week article finally proved as much. Regardless of the economy, I maintain the mindset of ABS…not brakes…ABS = Always Be Saving. Our generation isn’t going to collect a dime of social security, so it’s important for us to save now.

George Costanza said very few intelligent things, but he did once say, “Interest…it’s an amazing thing. You can make money without doing anything.” He was half correct because you have to put the pieces in place to work for you. Here are 5 ways to get your money working for you:

1) 401(k) and/or Roth IRA

This is the biggest no brainer in the book especially if your company has a match. It’s tax free money. If your company has a match, then max it out. If your company doesn’t have a 401(k), then open a Roth IRA. I prefer Fidelity and Schwab, but you can use any brokerage service. Each brokerage I mentioned offers a method for incremental contributions just as you’d have with an employer. That way you can open an account with $50 instead of $3,000. The maximum contribution for 2008 is $5,000…try to hit that! You have until tax day 2009 to contribute.

Be a ROCKSTAR! If you can afford it, open a Roth on top of the 401(k).

DON’T TOUCH!! Pull the money out and you’re taxed 30%. However, there are little loop holes. For instance, you can make a withdrawal as a down payment on your first home purchase.

2) Mint.com

I work hard for my cash, and I want to know where it’s going. Throughout college my mom was baffled that I could never fully balance a checkbook. However, I’ve always been able to budget. I’ve used Quicken and Money in the past…never again! Mint is barely a year old. It has won an award, received major funding and is more efficient than those other two. The security is top notch, and the only information they need is your email address. It helps you track expenses, bills, budget, savings opportunities and much more!

3) Payment & Punishment

Once you have Mint setup…use it! Figure out your biggest expenditure, aka weakness, and exploit it. Take whatever you spend there and match it into your own savings. For instance, my weakness is for random runs to the nearest crack house…errrr…espresso distributor; so each month I find out what I spent on it and put that same amount into my money market fund.

So, if you spend $175 a month on Marlboros, then you put $175 into your savings of choice. This practice will have several positive effects on your financial life.

4) High Yield Checking

I only need a physical bank for one thing…ATMs. When I moved to Atlanta, I went with Wachovia because they are everywhere. My paychecks are direct deposits and my bills are paid via online checking.

Schwab now has an award winning checking account the garners interest. I can do everything with them that I do with Wachovia and earn 2% on my cash. In the rare occasion, I need a physical check, they are free. Visa debit card is included. If I need cash, the world is my ATM! They reimburse for ATMs worldwide.

5) AMEX One Card

This is a little known card from American Express. The only AMEX card I see less than this is the elusive black Centurion card. The One card is boring in appearance except as it’s mostly green. Green because it earns you money. AMEX One has replaced my ATM/Debit card. I use this card for all of my purchases.

AMEX opens a savings account for you and matches your spending into your savings account. They start you with $50 after your first purchase. Thereafter, they match 1% of your monthly expenditures directly into the savings account. While your money is sitting, it earns interest (currently 2.75%). It has interest protection for new purchases. Basically, this means that you don’t pay interest on the full balance but only on what was due before the current month. Having said that, I strongly suggest you only using this method if you typically pay your credit card off in full each month. Paying interest defeats the purpose of the savings account.

Bottom Line

Money, Knowledge and Sex are Power…Know where your money is going, use the intelligence to distribute it so you can attain more, this will make you more attractive on several levels and then you’ll have more sex. You are now ALL POWERFUL!!

Photo Courtesy of DeShawn Stevenson ;->