Something a little different this week. Yet, I still think it is really important because we need to be thinking about how we can help ourselves and our families as they grow, and grow up. So let me start you off with this: I really like magic. My dad turned me on to it when I was little and he still has a ton of stuff in his attic. You know what feels like magic? Getting paid for doing nothing. No, this isn’t some get-rich-quick scheme or an email promising you $5,000,000 from a distant relative in Nigeria (but if you have it and am looking for a prince, I’m your man!). I’m talking about high-yield savings accounts (HYSA).
What’s that? It’s just a basic savings account, but on steroids. Ok, by now you are sensing my enthusiasm mixed with a potent dose of sarcasm. However, I’m being serious. I’ve helped multiple people over the past couple years set up high yield savings accounts, literally making them hundreds of dollars a month in interest, instead of a paltry $1 at the big bank standard savings accounts.
Quick thing here: I’m not a financial advisor, but I’m a friend and dad who does this. Take what I say, or leave it. This has worked for me and has helped us financially as we care for our kids. Add comments if you have something else to add too, but every situation needs different things, so consult with a professional if you need to. There are NO affiliate links in this post.
High-Yield Savings Accounts: The Real “Dad Hack”
Let me put it this way: if your regular savings account is the 5K charity walk, a high-yield savings account is like running the Boston Marathon and winning your age group (you knew I’d slip a running metaphor in somewhere). They both technically get you across the finish line, but one does it with way more reward.
I’ve been using high-yield savings accounts for over a decade, moving my money around like it’s in witness protection—switching banks when interest rates change to make sure I’m getting the best deal. But don’t worry, you don’t have to be that obsessed to benefit from one of these accounts. Right now I’m at Ally Bank. I may be switching soon as rates are a bit higher at some other banks like Synchrony.
My Money Workflow
Here’s how i make my money work for me each payday:
- I get paid into my regular checking account. I use Chase becasue I like the safety of a large institution with branches nationwide.
- I cover my bills, expenses, and impulse purchases (because let’s be honest, sometimes a dad needs a spontaneous splurge on a new pair of running shoes or, let’s face it, another gadget). This means knowing what you need in your account before the next payday. So if you have a $3k mortgage payment due in a few days, make sure you have that in your checking account. Then add in your $15 netflix account, $100 cellphone account, etc. All of that needs to be in your checking account to pay out of.
- Move the rest to High Yield Savings Accounts. Straight into the HYSA, where it quietly multiplies like bunnies on a long weekend. These accounts pay you between 4-5%! The savings account is where momjogger and I put our money to maximize our interest.
Missing Out on Free Money? Let’s Fix That.
Last Year, I was talking to a friend who was getting excited over the pennies he was earning on his regular savings account. I casually mentioned I was getting 5% interest (varies on the market), and he hit me with the classic “Wait, 5% interest… HOW?”
Turns out, he was stuck at 0.05%—which is basically like keeping your cash under the mattress, but less exciting. I helped him set up a high-yield account, and after just two months, he had made hundreds in interest—money he could’ve been making all along! There’s no way to go back and reclaim what you’ve missed, but you can definitely start making that money now. Let’s do a bit of math:
Let’s say you are ahead of the curve and have $50k in savings. You did the right thing and have an emergency savings fund. If you take 5% of that it is (50000 * 0.05) $2500! That is per year, so divide that by 12 and your emergency savings will grow by 208.33 per month! Here is where the math gets complicated. After the first month you have $50,208.33. Now you need to do our calculation again (50208.33 * 0.05) and find out that in your second month you will be making 209.20 that month. Around and around we go.
But this sounds risky right? Wrong! This isn’t the stock market. No mutual funds, ETF’s, or trading of any kind. Just a simple bank account, and it is FDIC insured.
Why Every Parent Needs This in Their Financial Arsenal
I get it, being a parent means constantly juggling between saving for your kids’ future (hello, college tuition), and keeping them from wrecking the house (or your sanity). Finding ways to stretch your money is key. While budgeting is critical (I was a hardcore budgeter once, spreadsheets and all, and I’ll go into budgeting for dad’s later), I know life happens. Some months, you don’t save as much. Some months, you accidentally order Moe’s Southwest Grill burritos for the family for the third time that week. We don’t like cooking or cleanup either!
But that’s where high-yield savings accounts come in. Even when life gets busy and your budget’s not as tight, your savings can still be working for you behind the scenes. Imagine the possibilities: Vacation, the new home gym you want, updating the kitchen like we want to, etc.
The Easy Way to Get Started (No Fancy Finance Degree Required)
So how do you start earning interest that actually makes a difference? Here’s the easy route:
- Research HYSA options: Look for accounts offering 4-5% interest (or more if you can). Most come from online banks, so check terms (limits on withdrawals, etc.)
- Check for fees: You want your money growing, not being eaten by maintenance fees. You should be able to easily find a bank that doesn’t charge for minimum balances, etc. I have a checking account from my HYSA so I can access money more quickly, and it automatically pulls money from the savings to the checking to avoid overdraft fees.
- Transfer your savings: Keep enough in your checking to cover monthly expenses and set a regular transfer to your HYSA for the rest. If you budget properly, you should know about what needs to move automatically. Or you can just check on it each payday.
And boom! You’re earning free money with the least effort possible.
The Bottom Line: It’s Not Rocket Science, It’s Just Smarter Saving
High-yield savings accounts are like running shoes: once you find the right fit, you’ll wonder how you ever lived without them. Sure, they won’t solve all your financial problems, but they’ll definitely help you stash away more cash for those rainy days. Or sunny ones—because sometimes a family vacation is just what the doctor ordered.
So, if you’re still using a regular savings account, it’s time to stop letting your money sit there like it’s in timeout. Move it to a high-yield account, and let it actually do something for you.
Now, go check those bank rates.
