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My Finances and Saving System With ING Direct

by The Happy Rock on December 11, 2008

ing-direct-finance-should-be-clearI have said it before, but I love ING Direct and I have the accounts to prove it.  I have an Electric Orange Checking Account, ING Direct Savings, and an Orange Mortgage all through ING.   Here are 5 reasons I like their products:

  1. Their web interface is a joy to use and they are constantly improving it
  2. Customer service has been great
  3. All the accounts play nicely and instantly together
  4. Very good interest on savings and checking balances
  5. Simple and straightforward.  ING doesn’t like to play games with fees or complexity.

My System

Both paychecks are direct deposited into our checking account where it starts earning a solid interest immediately.  I pay bills as necessary out of the checking account using free bill pay or their free online paper check writing.   The only transferring I do during the month is for The Rockette’s incoming checks where I transfer 40% into a ‘Taxes’ savings account and transfer the rest into our house down payment fund or whatever savings goal is at the top of the list.  We try hard to live and pay all of our expenses and even  do some saving out of my salary so that we have flexibility regarding jobs and money if and when we need it.  At the end of the month I will not only pay the few bills I have due, but I will also transfer our agreed upon amounts into their appropriate savings cubby hole.

It is these cubby holes that endears this system to my soul, since I love it when everything has a nice neat home.  ING Direct lets you create as many savings accounts as you want with the just the click of a few buttons.  I currently have 14 savings account.

How come so many?  Let me list a few of the accounts so you can get a flavor for what I am doing.

  • Emergency Fund
  • Taxes 2008
  • Property Taxes
  • Auto Insurance
  • Auto Maintenance
  • Gifts
  • Replacement Car Fund
  • House Down Payment
  • Frank’s Stash (Birthday money and such)
  • Entrepreneur Income/Expenses
  • Replacement TV Fund

I think the category titles speak for themselves, but let’s take a closer look at a few accounts to see how it all works. For Property Taxes, each month I transfer ~$250 from checking into that account.  Every third month instead of transferring in, I transfer the money back to checking and pay the quarterly bill.  Simple, clean, easy to manage, and I also get a free $10 of interest for working it that way.   Same setup for Auto Insurance.  I transfer 1/12 of the cost(~$90) each month and then once a year I transfer out and pay the bill.  I earn interest and avoid any service charges for monthly payments.  I think you get the drift.  I am willing to answer any questions about certain accounts or the system if there are any.

Benefits of the system

Here are the key points that I love about the system.

  1. Everything is there in one spot, easy to access, easy to see.  This makes things like preparation for the monthly budget meeting a snap because all I have to do is print the accounts page and you can see where all our money is.
  2. It is simple.  No weird gyrations to get extra interest or avoid fees.  It takes almost no energy or thought once the system is set up.  Financial auto pilot is a great feeling since it frees you to think about answering the bigger questions about money and life.
  3. Transfers are instant between all accounts.  No lost interest or account instability while the payments transfer.
  4. Paperless
  5. It fits my personality.  I brings  a calmness to my finances…well it is probably the no debt except the mortgage and a fully funded emergency fund that gives me the peace, but the system does connect with how I like to do and see things.  Finance is personal and this system won’t work for everybody, but your system should definitely align with who you are and how you like to do things.

That’s how The Happy Rock is working his money right now.  How about you?  Any questions? Any glaring holes in my system or areas for improvement?

*Note – ING does offer a free $25 for opening a savings or checking account with minimum $250 deposit on referalls.  I would also get a free $10, if I refer you.  Contact Me if you would like to recieve the offer.

{ 11 comments… read them below or add one }

Jeff@MySuperChargedLife December 11, 2008 at 12:35 pm

I like how you have your money divided out into separate savings accounts. It seems like a good way to keep the money organized and to be clear on its intended purpose.

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Ray Merkler December 11, 2008 at 12:38 pm

Pretty similar to my system, except I have 23 savings accounts on ING. :)

I also have the transfers into those accounts automated based on what I need to budget for each expense each month. For example, I budget $100/month for the electric bill, so I have a recurring withdrawal set up to transfer $25 into my Electricity account each week. Saves me a lot of clicks.

The big reason why I like this system is that I don’t have to think about it any more often than my paycheck changes, which might be two or three times a year at most. I do the budgeting math once, set up the account transfers, and from then on, I can rest assured that I have the money that I need set aside when the bill arrives.

If I could marry ING, I would, but Prop 8 and all…

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Frugal Dad December 11, 2008 at 1:12 pm

That’s a pretty sweet system! And I thought I had a lot of ING sub-accounts (8). I have yet to take the plunge and open an ING Electric Orange checking account, but after looking at your setup it would make things much easier than transferring in from my external bank. I could always keep a little here locally to satisfy my paranoia over having money nearby.

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Mike December 11, 2008 at 6:24 pm

Clever way of managing a budget, but I have a question about the replacement accounts. Doesn’t separate replacement accounts encourage you to replace it earlier if your account balance is high enough for the item you want or spend everything in that account?

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The Happy Rock December 11, 2008 at 9:18 pm

@Jeff- Thanks

@Ray – I like the weekly auto transfer, which would work for bills but not savings…the Rockette’s check doesn’t show up on regularly scheduled intervals. In general I like to do things by hand, but I think if I broke it down to a weekly level, I could be less hands off.

@Frugal Dad – We still have a local Wachovia account with a little money it for quick check writing, backup options, and counter services. I don’t think you will regret moving to Electric Orange though. You can sign up and make the transition slowly if you want. It took us a few month of transition to get comfortable and switch everything.

@Mike – In general, the replacement funds are for things that we know we want or need to replace in the future. The money doesn’t burn a whole in our accounts though. We will see what happens if the TV fund gets finished off and sits for a while though.

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ChristianPF December 12, 2008 at 5:54 pm

We use a pretty similar system with ING. The only difference I can tell (assuming I understood you correctly) is that we have 2 checkings one and ING and one at a CU. One checking is specifically for bills, the other is for other stuff…
But I am with you in my love for ING… I hope they keep it up!

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pranky December 13, 2008 at 1:00 am

Very nice and also useful way of managing all of your money by using separate savings A/C.

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bill@money-saving-tips December 15, 2008 at 11:27 am

I didn’t know they could create new accounts on the fly like that. Very cool. That would work well with the “envelope budgeting” method. Many people used to budget that way, but it’s tough in a cashless society.

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Andy @ Retire at 40 December 16, 2008 at 3:25 pm

This post has been featured on the 89th Carnival of Money Stories at Retire at 40.

Cool way of sorting out your finances. Hope it goes well.

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Scott January 14, 2009 at 6:59 pm

I like your system. It’s very similar to what I’m looking to set up soon. I’m trying to decide between something like ING with multiple sub-accounts, or just having it all in a lump account, and having a spreadsheet that “splits” it up, so I’ve been doing a lot of research on ING.

I have a couple questions:

Are you able to rename your sub-accounts? I’m wondering what would happen if I wanted to change my savings goals, or even to put the total dollar amount we want to achieve in the name, so I can see at a glance how close to the goal I am.

I know even with ING, you are only allowed 6 transactions a month (I think only withdrawals are limited), just like all other savings accounts in the US. What happens if you go over? Do transfers between savings sub-accounts and/or the ING checking account count toward the 6 transactions? Do each of the subaccounts have a 6 transaction limit, or is it 6 for all of those accounts?

I’m glad I stumbled on your site! My wife and I are taking the plunge of doing our finances together this year, instead of me handling it all, so I’ll keep reading your site for inspiration.

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The Happy Rock January 16, 2009 at 8:27 am

@Scott – Account names can only contain numbers letters and spaces, so a savings goal and amount would be fine.

Transfers between accounts and an electric orange account checking are instant, free, and unlimited.

I have never had a problem with the 6 transfer limit, but it is a federal law for savings accounts I think. I would need to look into it more, maybe in a future post. Contacting INGs service force would get you a quick answer.

Let me know if you find out anything or have any other questions.

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