Originally Posted by CityofAngles
I've just started working a real full time job and want to make sure I have my finance setup right. My employer doesn't have a 401(k) match right now I'm thinking of putting that money into a roth IRA instead. I'll but around X amount into roth IRA and the rest into a savings account. Should I also open up a brokerage account for more short term investing? Ill add some index and mutual funds into this brokerage account. Or should I ditch the savings account all-together and just do an roth IRA and brokerage account?
I like the roth but there is a 5K cap. I don't know how much you are planning on making/investing but you might want to invest more than that--I made sure to both hit the Roth cap AND get the full employer match on my 401k (I actually did more than the match, but we had good fund options with lower fees than I could hit in a personal account).
You either still invest in the 401k (it sounds like they have one but just don't match?) which is nice because it is automatic from your paycheck pretax. You could also open a traditional IRA but they share the same 5K cap with the roth (and while the money is pretax, you probably still pay the taxes from your paycheck so you can't get it until the end of the year).
I would still keep a savings account...I use ING Direct which has the ability to make little sub accounts (so you can have a "folder" for vacations and another for emergencies etc, all in the same account)
For checking, I suggest charles schwab...they don't have physical branches (although you can do some things at their financial planning offices) but they refund 100% of ATM fees, accept deposits from smartphone apps, and generally kick ass. You have to open a brokerage account with them to have the checking account (this is why it is free...they know that if you have a $0 balance brokerage account already set up with them and you decide to start investing, you will probably just take the easy route and start using it rather than opening an account with another brokerage).
The atm fee refund thing is killer...even if you are with BofA or whoever has the largest ATM network, you know that the only nearby ATM when you are in that cash-only bar is going to be one of those dinky independant ATMs with a $3 fee.