34F single mom, one toddler. I started an eBay store a few years ago and the money is coming in. I have no idea how to manage it though and need advice. I have no debt and have never had a credit card in my life. My only bank account is one checking account. We are coming up on my busiest season and I anticipate sales of 30-40K over the next couple months. I would like to save almost all of that. In past years my expenses were much higher and I was working less overall due to being pregnant, having an infant, etc. I have worked very hard to get my expenses as low as I possibly can, and things are finally lining up this year now that my child is not a tiny baby where I will be able to really work and make money.
What steps should I take? Do I go to my bank and ask to open a savings account? I have been reading and realize my money isn’t exactly safe sitting in a checking account because if my debit card gets stolen/skimmed, someone could steal my money. So I don’t want it depositing into my checking account.
I literally have no idea what to do so thank you for any advice.
Starting to make some money and I have no idea how to manage it
byu/StretchEast9853 inpersonalfinance
Posted by StretchEast9853
5 Comments
Sounds like you are asking about a framework for what to do with money.
Start with reviewing the Prime Directive in the PF Wiki. It will answer your question and many other questions you didn’t realize you should be asking.
* https://www.reddit.com//r/personalfinance/wiki/commontopics
If you’re worried about having all of your money in one checking account, especially one that isn’t going to pay much if anything in interest, you should open up a savings account.
You can do that at your bank, or, you can open one online (people will direct you to a HYSA, or high yield savings account, which will offer better rates). I recommend Ally Bank.
Beyond that, though, you’ll want to figure out how you can use this money to pay for your life while saving for retirement. There’s plenty of advice in the wiki on how to prioritize your savings.
I recommend to everybody to open a high yield savings account. I’m currently getting 3.75% at Bask Bank. Put your money there while you are figuring out what to do with it. It is also a great place to store your emergency fund.
In your shoes, I would recommend opening a Roth IRA account at a reputable brokerage and saving for retirement.
Is eBay your only income or do you also have a W-2 job as well?
Your business should have a bank account separate from your personal account. Any salary that you draw from the business can be transferred from one account to the other.
You should speak with an accountant to make sure you’re filing your taxes correctly. Set aside whatever funds you owe in taxes into a separate account.
Anything that isn’t being used to pay the bills should be placed in a high yield savings account until you have 6 months of emergency expenses saved up. After that, you should be investing in some sort of retirement account or just pur it in the market.
You’re doing great already. I’d open a separate high‑yield online savings account for business profits and emergency fund, keep checking for bills only, then read the PF wiki and look into a Roth IRA.