conversation: User (doommonky): "I'm a 28 year old male with a history of terrible financial decisions and I've had it with living check to check and not having access to any lines of credit or savings for emergencies.  It's well past time to fix all this, but I need some advice, because I'm really under-prepared in this area.\n\nSome basics:\n+My employment situation at the moment seems stable, while relatively low gross, but stable enough that I just took out a $2k loan against my 401k, $1000 of which I plan on using to jump start savings, and the other $1000 is to catch up on current bills so I can have a relatively clean starting place.  I'm also looking at getting a part time job to supplement my savings.\n\n+Along that route, what is the best way to save, and how can I make the small amount of money I can put away each month really work for me.  I'd like to have a decent nest egg built up as soon as possible, but it seems I may only be able to put $150/month into savings.\n\n+I have a few relatively large charge off accounts on my report from when I was younger.  The most recent of which is due to drop off in May, but others will be sticking around for a little while yet.  What is the best way of dealing with this sort of bad debt?  If you pay the full balance on a charge off, does it remain as a charge off?\n\nThanks for your time, Reddit.  I really need help on this.  "
  Self: "Put your first 5K of savings (at least) in a high interest savings account which is also insured by the FDIC (in case the bank goes bankrupt). This way your money is available (in case of an emergency) and safe. \n\nAfter you've reached that goal (which will take some time) you might want to put any extra money into investments which might make you more interest. But with more interest often comes more risk too and also it's often more difficult to get the money out quickly, that's why I said you should keep your first savings somewhere without risk. And you could still choose to keep the rest in savings too; or you could chose low-risk investments over high risk ones, it depends on your preferences and on how much risk you feel comfortable to take...\n\nYou have time to find out about where to put your money. If you leave the current 1000 in your current account for a month, you will "lose" at max 0.5% of interest on it, so that's 5 dollars. But giving yourself this month and reading up / researching high interest savings accounts might *make* you a lot of money if it helps you to find a better account with for example 0.5% extra interest per year (which gives you 5 dollars extra on the 1000 per year, and also 0.5% extra on any other money you put in).\n\nFor the investments you might make in the future: if you put your money away in a bad spot, you might lose it, or a chunk of it. If you find the right investment for you, you might make a nice profit. Here the differences are much bigger than the differences in interest rates of savings accounts; so researching it beforehand will be very worthwhile in the end. "
  User (doommonky): "Thanks for the advice!  This is kinda what I was thinking, but I was lowballing the minimum savings.  Since I don't make much, 5k might take me quite a while to come up with, but I will make it my emergency savings goal. \n\nI was looking at Ally and ING direct for savings.  Are these good choices or should I keep looking?"
  winterwhite87 (winterwhite87): "I use smartypig because it's fun, and the rate is one of the higher ones out there."
  