Monday Reader Mailbag #1

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I'm starting a new section here at Distilled Rose. Every Monday I will be answering any questions that I have received. Please feel free to ask questions either in the comments here or in my trusty contact form in the right sidebar. 

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Question #1

Matt asks : What is the best savings account if I have around $1k?

The answer to this question really will depend on how much access you would like to have to your money. If this is a savings that you don't need to get at any time soon, then I would recommend going with a CD. 

A Certificate of Deposit will hold your money for a certain term, usually at a higher interest than a standard savings account. If you choose to remove your money before your term is up, you do forgo penalties... usually something like three months of interest. 

Right now one of the best CD rates can be found at Washington Mutual. However, there is some concern right now over whether that bank is in trouble. It is not likely that it would effect your money if it failed, but if you are concerned about it, then check out CD's over at ING Direct, Countrywide or E*Trade. 

If you want access to your money, I would recommend storing it online in a High Yield Savings Account. I can't say enough good things about ING Direct. They have great products, great service, secure accounts, the ability to have sub-accounts, no fees, and a great referral program. You really can't go wrong with them. 

Question #2

Joe asks: What is the best free way to manage a budget?

Honestly, and I know that I am in the minority here, I use Text Edit (Notepad for you non-Mac people). I have a list of the bills that need to be paid, how much extra I need to make per month, and all of the balances on my various debts. At the start of the month I put an asterisk by each minimum payment which I remove as I make the payments. 

On my phone I keep a note of how much extra money I have, and I edit that as money comes in or goes out. 

I know that a lot of people prefer programs to track everything, but I believe in simplicity. Whatever works for you, though, is what is important. Managing your money is a personal thing and as long as you are aware of what you have and keep track of things, the format doesn't really matter. 

So, please do feel free to post questions in the comments below for next Monday's round up.