If I have one goal in this lifetime, it is to help women see the connection between their financial security, and their personal power.
When you have a strong income and earning potential, you make better decisions about your romantic relationships — like choosing me men who rock your world, and not who might help with the rent.
You can leave abusive or even unsatisfying relationships because you worry you can’t make it without his paycheck. If you have money in the bank, and confidence in paying your bills now, and your future later, you are more likely to make sound career risks, and less likely to stay in a crappy, miserable job.
When you have your financial act together, you are more confident, less stressed mom — because you know that what life throws at you, you are more likely to handle with ease.
I LOVE checking my savings accounts daily. Just looking at that cash sitting there, with nowhere to go but to my own sense of security, makes me feel very confident in pretty much every aspect of life.
Which savings account is best? — CIT Bank Savings Builder
CIT Bank has a Savings Builder account with one of the highest interest rates I could find at 1.8% APY (as of 1/14/2020).
The CIT Savings Builder not only has great rates, and is easy to use, it has a built-in savings motivator: The high rate applies if you deposit $100 monthly (or maintain a $25,000 balance) — awesome incentive!
CIT was founded in 1908 as a commercial bank in St. Louis, and today manages $50 billion in assets. CIT Bank is FDIC-insured.
I swear, to you this: between that money and daily use of coconut oil, my skin stays zit-free and glowing. FACT.
Unfortunately, most people — moms in particular — don’t have cash savings. In fact, a Bankrate survey found that just 39% of Americans have at least $1,000 in savings. Ideally, you have 3 to 6 months savings in cash, separate from your bank account, that you can turn to in the event of an emergency (37 reasons to consider, below!).
Bonus: Betterment's Savings Account
Betterment is a long-time leading robo-advisor, which is a type of investment platform like Ellevest, which automatically invests and allocates your investments to best help you meet your goals. Roboadvisors are gaining a lot of popularity, as studies find that by taking humans out of the investing equation, money actually grows faster. Plus, Roboadvisor fees tend to be much lower, again, thanks to technology replacing humans.
Betterment offers a checking and savings accounts, the latter of which offers a very hot 2.16% APY (as of 9/27/19), plus reimbursed ATM fees. Check out Betterment's Everyday Savings now >>
Bonus 2: Invest in Worthy Bonds
For the past 20 years, traditional savings accounts have offered very low interest rates — often below 1%. While low interest rates overall mean good things if you are buying a home, car or starting a business, they stink when it comes to savings.
Worthy Bonds are an excellent alternative to savings accounts because all deposits earn a fixed 5% interest!
- Get started with just $10
- Withdraw your money any time
- $0 fees
- Automatic payments
- Round-up savings feature. If you're familiar with Acorns or Digit, you know the power of a savings tool that tracks your daily spending and rounds up to the nearest dollar on every purchase — saving the difference.
- Super-easy to set up in 3 minutes. Just go to WorthyBonds.com, hit ‘Get started,' fill out your personal info, bank account and you're ready to start earning 5%!
- Feel good that Worthy earns that interest through secured loans to U.S. businesses
Worthy Bonds are a great place to park your emergency fund, or any other savings as part of your investment strategy. Gets started with Worthy Bonds now >>
Don't have an investment strategy yet? Check out: How to start investing for women
Why you need $1,000 minimum in a savings account
Reasons from members of Millionaire Single Moms, our closed Facebook group.
- Dental bills. I got hit with a $182 bill unexpectedly and had to pay before I left the office — Lakeshia
- Broken air conditioner in the middle of a scorching summer. — Maria
- Furnace goes out in the middle of the coldest week of January. — Sabrina
- Deductible if you make an auto or a homeowner’s claim. — Michelle
- Kids can’t fly despite what they may believe. — Vanessa
- Fat fingers in HR messes up your direct deposit so you don’t get paid on time. — April
- Car repairs. — A lot of moms
- Including new tires. — Shana
- Summer camp/daycare expenses you weren’t expecting. — Amy
- Unexpected sports/club related expenses for the kiddos. — Candace
- Your checking account is hacked and frozen, and you still need to eat. — Tiffany
- Unexpected legal expenses! We were surprised when we were taken to court for grandparent rights and visitation. Completely blindsided and never expected. — Mariah
- You need to flee an abusive situation and have zero family to help you. Laura
- Mice in the crawl space. — Dara
- Sick days when you don't have paid ones or you're out of them. —Cassie
- Jury duty making you unable to work/earn money. — Monique
- Appliance purchase or repair (dishwasher, water heater, washer/dryer, fridge, stove, oven, microwave. —Aimee
- Death or illness of a loved one who lives in another state requires airplane tickets. — Theresa
- You have a family emergency and need child care. — Ivy
- Storm takes out the neighbors tree that lands on your roof, and though insurance will cover it eventually you need someone to come at least do something to keep the water from pouring in. — Sabrina
- Natural disaster, hurricane, tornado, earthquake. — Olga
- If renting and you have to suddenly move you probably need a chunk of change before you get back the security deposit on the old place. — Monica.
- Deposit if you want to switch daycares. — Sarah
- Because it’s hers. I know that sounds facetious; however, the concept of “my” money got lost somewhere in my marriage and losing that ownership meant I lost some of my power and control over things that mattered to me but not him. Having your own savings account means you have some money to take care of things by yourself. — Lakeesha
- Unexpected professional opportunities that pop up and have costs associated with them. — Loren
- [Adds Karen:] Agree. Many companies will foot the plane fare if they have a travel office, but you will have to pay upfront for hotel and incidentals and get reimbursed upon completion of trip.
- Shit. Just shit that happens. Inevitably. — Kenyette
- I call it my Holy Shit Fund. — Beth
- Unplanned medical issue for a pet. — Ivy
- When the reliable child support check doesn’t come in like it usually does. — Sherry
- If you lose your job. — Ivy
- When you run into your ex-husband's garage door because you forgot to put the car in park! Wow… — Amy
- Spike in electric or gas bill. — Ivy
- My dog ate a tampon last week and needed exploratory surgery. $3k later, I was glad to have the ability to pay without having to make some sad choices. (I also had to invest in trash cans with lids after that little incident…) — Elizabeth
- Your purse gets stolen. — Ivy
- You need to be able to depend on YOU! — Neka
- Because you're a grown-ass woman and deserve to have and feel the power of financial security! —Me
Are you ready to build your $1,000 emergency fund?
Already have your cash fund? CIT Bank is amongst the highest rate I've found. Open a savings account with CIT Bank, with rates at 1.8% APY with $100 monthly deposits (as of Jan. 14, 2020).
But if you're ready to take it to the next level and start investing, Ellevest is an excellent robo-advisor designed specifically for women, where you can get started for $0. Read my Ellevest review or use this link to get your free financial plan from Ellevest + $50 to start investing >>
Rules for an emergency savings account:
- It should be in a bank separate from your regular checking account. A little harder to access. Keeps you honest.
- Do not think of this as fun money. This is safe money. Fuck-you money. Power money. It is not for vacations or clothes or dinners out.
- Look at that money often. Maybe it is linked to your Mint.com account, or you keep a statement within eyeshot on your desk. Give yourself regular reminders of how powerful you are because of that money.
Now, let's get you an account already!
You can find plenty of excuses not to mosey down to the local bank and stand in line to open a savings account. Time. Business. Whatever.
Thankfully, there are lots of great online savings account options that you can open from home, in a matter of minutes.
When it comes to your savings accounts, there are a few things single moms should look for in their bank in order to make sure they save both time and money:
- Accessibility: You need to be able to do your banking at night after the kids go to bed, not worry about getting to a physical bank location before closing. Any bank you choose should have a robust online platform and preferably an app so you can deposit checks, make transfers, and ask customer support questions easily.
- Low (or No) Fees: As a single mom, it’s important to watch your spending, which means plugging any financial leaks that pop up. Bank fees can be one of those slow (and sometimes quiet) leaks. Educate yourself on the banks that have low or no fees at all when it comes to their savings accounts. Don't be shy about asking questions!
- Mobile Deposits: Raise your hand if you just want to take a picture of a check and have the money appear in your bank account immediately. Who has time to wait in line at the bank drive through? It’s amazing that some banks still don’t offer this feature.
- Fantastic Customer Service: You don’t have the patience to deal with rude or unhelpful employees. After all, you already have to discipline your kids all day! Instead, bank with an institution that’s known for putting their customers first (and makes it super easy for their customers to contact them). Seek out banks that have award-winning customer service teams, or the availability to do an online chat when you don’t feel like talking to an actual human.
- Long-Term Savings Options: Once you establish a pattern for saving successfully, you’ll probably be interested in long-term savings options too. Look for a bank that offers money market accounts, CDs, or investment options for the future. That way, you can avoid switching banks or having too many accounts to keep track of when it’s time to invest for the long term.
How moms can quickly build a $1,000 savings account
Cash savings in the bank is a huge step in this direction, especially with a solid interest rate. I’ve parked cash in CIT Bank , an online, FDIC insured bank that was founded in 1908, because it offers the highest rate I’ve found.
**CIT Savings Builder is one of the high-interest online savings rate accounts I could find at 1.8% APY with $100 monthly deposits.**
CIT savings accounts benefits include:
- Access to 55,000 ATMs nationwide
- High rate of 1.8% APY with $100 monthly deposits (or a $25,000 balance)
- Just $100 to get started
- Takes less than 5 minutes to apply and fund your account
- Did I mention the high APY!?
How to quickly find $1,000
Sell stuff you already have
Sell your jewelry
Jewelry is likely one of the most valuable things that you don't use — engagement ring from a relationship that ended? Gold necklace that you never wear from a relative that you kinda dislike? Get rid of all that stuff!
For larger items worth about $2,500 or more, Worthy is my go-to recommendation. This online jewelry auction site has an A+ Better Business Bureau rating, has thousands of happy customers (including members of our online community, as well as me!), and has a 100% secure, transparent process to help you get the highest price for your ring, necklace, earrings, watch, bracelet, and estate jewelry.
Read more about how I sold my engagement ring.
If your jewelry is more modest, or is mostly gold, with small stones, check out CashforGoldUSA. I have also personally used this service, which was found by a Fox News investigation to pay out 3X its competitors. Read more about how you can find out how much your gold is worth, and where sell your gold for the highest price.
Sell your old stuff
Garage sales, consignment, CraigsList or pawn shops, getting rid of stuff you don't want, use or like is not only cathartic, it can be profitable! ThredUp is a great site to sell name-brand clothes, shoes and accessories, while Decluttr is where to unload iPhones, computers, books, video games and electronics.
Cut expenses to save money
Money-saving apps like Trim and Billshark are magical in that they will negotiate savings on your phone, cable, TV and other bills on your behalf. They also comb your accounts for recurring or duplicate subscription bills that you may be paying for — but not using. (I once paid double accidentally for Netflix for 6 months! Ouch!)
The clear leader in the bill negotiation field, though, is Truebill. How do I know? Research, ladies — plus the fact that Truebill saved me $39.20 per month on my AT&T and TimeWarner/Spectrum Internet bills. At the same time the app negotiated a better plan with AT&T! Truebill works with more than two dozen providers, including Netflix, Hulu, Amazon, Spotify, Audible, insurance policies and gym memberships. It also lets me track my savings and investments at a glance. Start saving with Truebill >>
Related: How to save money on a low income
Shop around for life and car insurance. Bestow is a unique life insurance company that provides plans for as low as $5/month for $250,000 of coverage — which can be perfect if you need short-term coverage between jobs, or after a divorce. Get a quick free life insurance quote now >>
Earn more money!
The best way to save more money, is to earn more money. Ask for a raise (here is how), start a side gig (13 high-paying work-from-home jobs for mom), or find a flexible career from home.
FlexJobs is a paid job board that provides postings ONLY for jobs and contracts that are from vetted companies (i.e. no scams) that are work-at-home, telecommute, or otherwise flexible. Read my FlexJobs review.
How many bank accounts should I have?
The answer to this question is, of course, personal, but here are some guidelines for when separate accounts are needed:
You need separate business and personal checking accounts.
If you are in a relationship or marriage, each partner needs their own, separate checking account. You may choose to also have a joint account for shared expenses like rent and utilities, or these can be paid from each partner's own account.
Some co-parents choose to share a checking or savings account, so they can each deposit funds for the children, and then pay for medical bills, school fees, college funds or extracurricular activities out of the shared account.
You may choose to have multiple savings accounts for separate savings goals, such as:
- Emergency fund
- Home purchase
- Home renovation
- Car repairs
- New car purchase
Advice from a divorce lawyer why married moms must have their own cash:
The following is a guest post by New York City divorce lawyer Morghan Richardson.
Every married woman needs at least $5,000 in a bank account in her own name – no matter what her husband thinks.
Far too many women are going to reject this mandate as an act of marital treason. Let's be clear: I didn’t say the account had to be a secret. I leave that up to the individual woman. Nor did I suggest that you shouldn’t care what your partner thinks. In a healthy relationship, you should absolutely care about his opinion. But you should have an account, regardless.
Having your own money is part of being an adult
You’re an adult. You should have some access to cash in your own name, not because it is a “divorce slush fund,” but for scads of other reasons. Having your own money to budget and spend is part of being a grown-up. It should be there for emergencies — what if he dies and the joint account is frozen (it happens all the time)? It should also be a place from which you can spend on the occasional luxury or other expenses without having to explain every nickel to your husband. What if those fabulous patent leather Jimmy Choo platforms that happened to be on sale? Or your brother is in (another) jam and asks for help? Money affords you options — even if you don't believe you need some of those options right now. That feeling is empowering.
Should married women have a ‘divorce fund'?
But should your account indeed be a “divorce slush fund”? Maybe. I don’t need to throw a bunch of grim divorce rate statistics at you. If you live in this world, you already know. So let’s get real:
An account held jointly in both spouses’ names can be accessed by either person. If your husband drains the account, a judge may require he pay you back some of it. But that can take months or even years. What will you do until then? How do you hire a lawyer to make him pay it back? How do you pay your bills and feed your kids? He may not pay child support or alimony unless that same judge requires him to do so – again, this takes time. How will you make it?
The vast majority of people who come into my office (all of whom are there to get divorced) have an arrangement in which one partner handles the bills and budget, and the other is oblivious to the family’s income, investments, debt and spending habits. This arrangement didn’t make for a happy union – these couples are divorcing, after all. You don't have to guess which spouse gets burned in the divorce.
No one sets out to get a divorce. No one sets out to have a car accident, either. But sometimes the minivan gets wrecked, and thank God you have insurance, right? So insure yourself. Get an account for all of the harmless reasons, but also know deep down that you have insurance if your marriage fails.
Having your own money is healthy for your marriage
Another thing: opening an account may serve as a pulse-check for your marriage. If your marriage is open and strong, then why would your husband have a problem with you having your own money? If you feel it is out of the question to even mention such an account to your husband, then you probably need your own funds more than you realize. Does the topic make you nervous? Because turn-about is fair play: I suggest he have an account in his name, too. And maybe he already does.
Need to set up your own checking account? Which checking account is best? — BBVA
Quick top pick: BBVA. Free checking, ATMs, cash-back debit card rewards, bill pay and mobile deposit. Plus: BBVA also has a high-interest savings account.
BBVA is a growing U.S. bank that has been in business for over 50 years. Their free checking and savings accounts are accessible throughout the country (as well as dozens of countries throughout the world).
Known for their willingness to serve customers, an award-winning Mobile Banking app, and innovation, it’s no surprise they are leading the list of best banks for checking accounts.
BBVA ClearConnect Checking offers:
- No monthly service charge
- Free online and mobile banking
- Bill pay
- Mobile deposit
- Cash-back rewards for debit card purchases
- BBVA has one of the highest APRs for its savings accounts, making it easy to bank and save in one place
Open a free checking account online with BBVA
To open an account online, you will need the following personal information ready such as:
- Valid, government-issued identification (driver’s license, passport, State or military-issued ID)
- Social security number
- Email address
- Phone number
- Funding information (where your initial deposit will come from: savings account, checking account, credit card, automatic transfer from an employer, etc. Basically the bank wants to know your money is legit, and not from your international drug cartel.)
Create a profile
Create login information for a username and password by using a variety of letters, numbers, and symbols. It is best practice to have login credentials not used with other websites.
Enter personal information
The application form for most online banks is simple to complete. You can expect to provide personal information such as a full name, date of birth, primary address, contact information and identity verification.
Questions regarding expected account activity, employment, income, and whether this is a joint account will need to be answered before moving on.
Fund your checking account
Many online banks require a minimum deposit from an existing savings or checking account or from a debit or credit card. Be sure to check online to ensure that you deposit the correct amount of money to fulfill this requirement.
A welcome packet, debit card, standard checks (if available), and other information regarding the new checking account will be mailed to the address provided in the online application.
Once received, activate the new card and create a personal identification number (PIN) so you can use it.
How to choose an online checking account
When deciding on an account, you may believe that free checking alone is enough to save money.
However, actual dollar amounts are only part of the equation. Every single mom needs a checking account that allows her to save both time and money.
Fortunately, there are many online checking account options to choose from. Selecting accounts with features that are best suited for your financial needs is now easier than ever.
With that in mind, single moms should look for a handful of additional features to help ensure they select the best checking account. These features include:
- No minimum balance requirement: Avoid keeping money locked up in a checking account, because they typically don’t pay interest (that’s what savings accounts are for). Instead, opt for banks that offer no minimum balance. Some banks start charging fees, or reduce their perks, if you don’t keep a minimum of $1,000, $5,000 or more in the account
- Free online and mobile banking: Look for banks that allow you to manage your accounts on your phone or computer. Perks such as snapping a photo to deposit a check via mobile deposit, budgeting tools, viewing transactions, and overall account access is now standard.
- Free ATM access: There are many things in life you have to pay for, but paying to access your own money shouldn’t be one. Just say no to banks that charge ATM fees — both in and outside of their network! It will surprise you how much $5 ATM fees add up.
- Customer service: Great customer service and support is vital when your money and time is involved. Check online reviews and ask around.
Difference between saving and checking accounts
Here’s a quick overview explaining the difference and functionality of each type of account:
A savings account is a bank account that is designed for saving money over a longer time. Many people refer to it as a “virtual piggy bank.”
Savings accounts offer an interest rate, allowing users to earn interest on the money saved there. In recent years, savings accounts rates have been low — typically 1% or less.
This account can include saving for things like an emergency fund, vacation or a down payment on a house.
You can opt for a stand-alone savings account, or link it with a checking account to transfer money between the two.
A checking account is a bank account used for spending that occurs while making in-person purchases, shopping online, or getting cash withdrawals at an ATM.
While you’re unlikely to earn high interest on your money in a checking account, you can take advantage of features that make accessing and managing money a lot easier. These include:
- Check writing
- Debit card purchases, which immediately pulls money out of the account
- Automatic bill pay
- Some online checking accounts pay interest
In fact, a good checking account will have all the features needed to make managing your money convenient.
True story of a mom who secretly saved to get out of an abusive marriage:
I know an amazing mother of four children. She is on her second marriage and this time, the marriage is extremely successful. She and her caring, supportive husband are both school teachers. They have two-year-old twins and a house with – literally – a white-picket fence around it. It wasn’t always this way.
I’ll call this woman “Anne.”
Anne’s ex-husband was an obsessive, controlling and verbally abusive police officer. He drank. He cheated. And when Anne protested, he threatened to use his job to take custody of their preschool-aged kids and make her life a living hell. He also threatened to use his position as the sole bread-winner to hire the best lawyer and steam-roll over her in court. Yet, rather than feeling trapped and overwhelmed, Anne seized control of the situation – by taking control of her finances.
But not in the way you might think.
Wealthysinglemommy.com founder Emma Johnson is an award-winning business journalist, activist and author. A former Associated Press reporter and MSN Money columnist, Emma has appeared on CNBC, New York Times, Wall Street Journal, NPR, TIME, The Doctors, MONEY, O, The Oprah Magazine. Winner of Parents magazine’s “Best of the Web” and a New York Observer “Most Eligible New Yorker,” her #1 bestseller, The Kickass Single Mom (Penguin), was a New York Post Must Read. A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Emma's Top Single Mom Resources.