Myn’s Deets: Where do I keep my muney?

in my mattress

Finally – the Big Reveal!

(Not that it’s going to be particularly exciting and in typical Myn fashion I’m going to ramble on about a whole bunch of other stuff before we get there.)

In case you need yet another recap, *previously on Myn’s Desk* I’ve nagged about how it’s important for you (well, us) to:

If you didn’t already know, all my notes are based on my own personal experiences and leisurely research. I’ve written before about how, why, and when I started to properly, really, really manage my finances (broke college student, obvs) and at the time I’d done it intuitively and instinctively. I knew how much allowance money I had coming in every month, and there really was no option but to make it stretch until the next batch of funds came along.

Once I’d graduated and landed my first job, I knew that – after treating myself a little bit, of course – my first serious financial priority was that I never wanted to be in a situation where money was tight again. When I was a broke student, being broke wasn’t really my fault: I had a full scholarship and was pretty grateful for the allowance I did receive, even if I did live and study in one of the most expensive cities in the world and my rent alone ate up over half of that amount. I wasn’t broke because I went shoe shopping every weekend or chose only to eat expensive, organic produce from Whole Foods. I was broke because the going price for a small head of broccoli was $3, the cheapest phone plan I could get was $50 a month on a flimsy LG smartphone, and it just wasn’t really possible to walk out of the grocery store with five items for under $20.

After moving back home and starting work, however, I knew that if I were to ever go broke again it would be entirely my fault. I live at home and don’t pay rent, my income gives me more than three times the purchasing power I used to have, I could even eat half my meals for free at home if I really wanted to pinch pennies. If my new graduate starting pay income wasn’t enough, then what would be? How embarrassing would it be – to earn all that money, still live at home, and then unceremoniously declare myself broke? DEAR LAWD I didn’t spend all those years living the ~independent life~ to come home and start breastfeeding again!

AW HEYL NAO

I’ve given you a peek into my general spending habits via my Wally data and expenses reports, even if I haven’t yet gone into the details of what I do personally choose to spend – and sometimes splurge – on (teaser: travel, coffee, eventually home-related stuff). And you already know that I have an emergency fund, which I’ve had to “withdraw” from twice this year already. I’ve mentioned in a couple of places that I have zero debt (for now); I have a credit card but I clear off the balance before the end of every month so I’ve never had to pay any interest. How much do I save every month? Haven’t told you that, but you know how much I save through the Five & Fifties game. What is my overall savings “plan” – do I save a fixed amount every month, how many accounts do I have, which banks, are they for different purposes, do I put money into all of them every month?

Let’s get started with that now:

I have a total of eight accounts with three banks, and one credit card.

WAT

Before you freak out, let me explain and it won’t seem so crazy:

  • I basically use two banks – HSBC and BIBD.
  • I have a general use ‘default’ account at both banks, both of which are linked to debit cards. (So that’s two accounts)
  • I also have a savings account with both banks. (Two more accounts)

So far so good? That brings us to four accounts with two banks.

Click here if you don’t know the difference between a general use account and a savings account.

Let’s digress real quick and answer the one question you might have:

Why do I have practically identical accounts with both banks?

Three main reasons.

Firstly, I diversify and don’t put all my eggs into one basket, in case one of the banks (like BIBD) has a major technical glitch that shuts down all branches, ATMs, and essentially freezes all banking transactions – I have funds at a different bank. Or if one of the banks (like HSBC) decides to start winding down, I’m already an existing customer at another bank so I don’t have to go through the tedious process of opening up brand new accounts, familiarizing myself with their services, etc.

Secondly, I prefer having accounts with at least one local bank and one international bank. My salary goes into HSBC, and I deliberately chose to have that done so I could gain access to the HSBC credit card. When I travel, this credit card is my best friend – I use it to book all my flights, hotels, and to pay for most of my travel spending. In my opinion, credit cards are the safest option for online transactions and purchases I make overseas because the charges are “held” until you deliberately pay them. This delay means that if anything shady pops up, I can still dispute the transaction with the bank if necessary. If you use a debit card, you automatically lose the cash as it’s basically a direct withdrawal from existing funds. Plus, the exchange rate the bank uses (for both debit and credit cards) is extremely fair so I don’t “lose out”; and if I need additional cash I can pop my HSBC debit card into an international ATM and withdraw foreign currency at a very low fee ($6 I think?). In general, I have more faith in HSBC when I’m abroad. I hear that the BIBD cards tend to get declined, and that’s not a risk I’m willing to take especially because I travel fairly frequently to quite far-flung places sometimes (not just the usual hops like Singapore or KL).

Thirdly, to take advantage of the promotions and discounts at local and international retailers. Sometimes HSBC has really good deals, sometimes BIBD has really good deals. For example, Fratini’s does at least 10% discount for HSBC card holders, and Bali Paradise does 10% for BIBD. I’ve got a card for both 😀

Back to the number of accounts.

My newest account is the extra savings account at BIBD for my Fives. which I mentioned opening online a few days ago. That brings the total to five accounts with two banks.

Additionally, I have two term deposits with BIBD – money locked up for a fixed period to take advantage of the better interest rate (and away from potentially accidentally touching it). Click here if you don’t know what term deposits are.

This brings the total to seven accounts.

My last account is a Tekad Haji savings account with TAIB. That’s the most clamped up and locked down one; I’m only allowed to touch it maybe once or twice ever and there’s no ATM card or online banking, I have to walk to the nearest branch with my old-school bank booklet, take a number, and wait in line.

Eight accounts, three banks. That’s two general use accounts, three savings accounts, two term deposits, and one Haj account. Not too crazy right?

mynaccs

Some people belong in the financial minimalist camp, and argue that too many accounts is just a lot of clutter, you need to simplify and streamline your finances, don’t get too distracted and bogged down by so many different things that it becomes difficult to manage.

I do agree that too many random accounts and spreading your money sikit sini, sikit sana is inefficient and not the best idea. If you feel that’s the case it’s probably better to centralize your funds for better control and neatness.

But well, I give my finances more thought than the average Joe does and I personally have good enough reasons (for myself) on why I have all these accounts. I’ve already explained the diversity across different banks, and why I enjoy having two debit cards, and a HSBC credit card. The HSBC savings account is actually just an extra “pocket”; I created it online and can easily transfer cash from the general use account to that pocket so that it “hides” the money from my debit card. It’s not a true savings account for earning interest, it’s just there as a spare pocket so I don’t have lots of money accessible with my debit card. It’s also an extra security measure if you think about it, because on the off-chance someone makes off with my card and PIN, they’ll only be able to access the general usage account via the ATM.

As a rule, I try not to keep more than a few hundred knocking around in my general use accounts. Plus, the general accounts have the lowest interest rates anyway (0.15% pa) so it wouldn’t be sensible to have lots of money sitting around in there.

My proper savings account is the BIBD Easysaver. It earns 0.4% interest p.a., more than twice the rate of the general accounts, and this is added to my balance as profit at the end of every month that I don’t withdraw any money (which is most of the time). If on the off-chance I need to take a little bit out, I only forfeit the profit from that month. My Fives account is also an Easysaver, and I already mentioned what that was specifically for in my last post.

My two term accounts are fixed deposits, one of them I opened almost two years ago, and the other is a year younger. They’re slightly staggered also, one matures every November I believe, the other one a few months after – something like that. Those accounts I forget are there; I don’t have to do anything to manage them, they’re literally just gone in my mind. They auto-rollover so even upon maturity, the initial amount + profit rolls over for another year of being in the freezer. These accounts earn 0.75% p.a.

My TAIB account is quite similar, I threw in some bonus money when I opened it and it’s been on auto-pilot ever since. I don’t do anything to manage it and I can’t touch it; it’s even more locked up than my term deposits so it’s basically set in concrete. I believe this TAIB account earned well over 1% in dividend/profit last year, but this isn’t a fixed or guaranteed rate. So my two term accounts and the TAIB one are probably better referred to as “investments” (albeit very safe, low return ones) because they’re less liquid (i.e. not really easily accessible; frozen) and are for more long-term savings purposes.

So while I may appear to have wayyy too many accounts, I don’t find them complicated or difficult to manage or keep track of at all. My three investment ones I sort of forget I have. My savings accounts are all easily accessible online. No big deal.

So do I save and add money to all these accounts every month? Equally? Or do I try top-up some accounts but leave some alone?

Until next time, bubye!

 

 

 

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4 thoughts on “Myn’s Deets: Where do I keep my muney?

  1. Hi.

    I’ve never had any problems with my BIBD credit card when I’m abroad so far. I used to only use it while I’m abroad but after seeing how fast I accumulate my hadiah points whenever I swipe it I started to use it like my “debit” too. I didn’t quite know how credit cards work back then (stupid, I know); had moments when a customer service rep. explained to me why my credit card limit was suddenly inflated at 430 am in the morning while I was several timezones away (I overpaid, hah hah).

    I have a general and 2 savings account. I only keep the min. $50 in my general account – and only transfer funds from my Account 2 when I need to withdraw some cash. Account 3 is my frozen-locked-never-touch-unless-its-a-life-or-death-situation account where I accumulate funds before I transfer them into my investment accounts. Oh. any leftover funds from my Account 2 goes into Account 3 every pay day.

    I intentionally make it less easy for me to access some fund by having to maneuver through the BIBD app all the time; but I do it because I know how bad and careless spender I can (used to) be.

    It’s been a great week since my mynsdesk discovery! Started the green challenge and finally getting off my ass to deal with Account 3 management.

    Have a good weekend!

    Liked by 1 person

    • Hi Nur, wow – thanks so much commenting! From the sounds of it, the way we structure and move funds between our accounts is very, very similar. The only difference is my salary is banked separate from my main savings, so I have to physically withdraw from HSBC and re-deposit into BIBD. That would be quite inconvenient for some people, but I work in Bandar and the banks are within walking distance and I don’t need to do it every month.

      My Easysaver account is like your Account 3, once I accumulate a sizable savings (which is more than I think I’ll need in the short to medium term), I’ll take a slice out and throw it into a fixed deposit.

      I also use the BIBD app and I think it’s great! I don’t earn Hadiah points (at least I don’t think I do?) since I only have the debit card, but I do try to use my HSBC credit card for all big purchases even in Brunei since I collect the Rewards points, which I eventually convert into Royal Skies Miles 🙂 I hear mixed reviews on the BIBD cards, a colleague of mine kept getting her card declined while we were on a work trip, even after she called them to try clear up any issues. But it’s good to hear you’ve never had a problem.

      Unfortunately most people don’t know how credit cards work – these things are never taught to us in schools, and it’s not in the bank’s interest to “warn” us about the pitfalls of maxing out our credit limit and the damaging effect on our finances of only paying minimum payments every month (our interest payments skyrocket and it takes forever to clear a credit card this way).

      I’m glad you’ve found my blog helpful – all the best with collecting green notes, let me know how well you do! Have a great weekend 🙂

      Like

  2. I have a “challenge” myself (actually more to my-wallet-doesn’t-have-the-pouch kinda excuse ahah!).Whenever I get any small change from the cashier, they go straight to the tabung. Although I tend to use my card whenever I can, so the amount of coins I’m putting in the piggy bank throughout the month can either be rather small or nil even. But as they say, sikit-sikit lama lama jadi bukit!

    Great post as usual!

    Like

    • I keep a little jar on my office desk for small change and sometimes it “magically” grows dollar notes when my colleagues need coins 🙂 I actually don’t use my cards for every use because I spend mostly on food and either a) my friends/colleagues and I split the bill and it’s easier if we pay our share in cash (or one person pays by card and takes all the cash), b) we’re at the usual “kopitiam” type places that don’t normally take card, e.g. CA Mohamad. But I definitely try to use my card for larger purchases over $50!

      Like

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