Budgeting with ING Direct
ING Direct has played a critical role in helping me get my financial life organized. They don’t advertise themselves as a great budgeting tool, but they really are. You could probably use this same budgeting technique at other banks, but I will show you why it is more beneficial at ING Direct.
Video explaining the process
1. Open multiple ING savings accounts
The first step is to open up multiple savings accounts at ING Direct (Yes, ING does allow you to open multiple accounts). At most other banks, this is discouraged, if not by the bank itself, by the amount of paperwork required for each. However, at ING once you have opened up your first account, any additional accounts can be opened with about three mouse clicks.
Each one of the accounts that you open will be something that you are saving (budgeting) for. For example, I have my emergency, vacation, car maintenance, entertainment, clothing, and any other savings funds at ING. I put a fixed amount into each account every pay period (ING can automate this if you would like).
2. Open up a ING Electric Orange Checking account
It is really this checking account at ING that makes this budget system possible. You could still use the ING savings accounts to make a budget without the ING checking account, but it will be much easier if you have the ING checking as well. And to be honest, I don’t think there is a better checking account out there that is better than ING’s.
ING’s Electric Orange checking is unique in a few ways:
- They do NOT offer checkbooks. It is a debit card based account
- You can send E-Checks to someone elses bank account for free
- It has a 3.93% (at the time of this writing) interest rate even with a $10 balance (try to find that at your local bank)
- Free ATM access at 32,000 locations across the country
- There are no overdraft fees. Instead of charging you $30 when you bounce a check, they just lend you the money until you bring the balance back up to $0. So instead of having a $30 NSF fee, you might have a $.50 interest charge. This alone is reason enough to switch. ING has saved me a lot of money with this feature.
3. Use the ING debit card to pay for items budgeted for
Once you have the first two steps taken care of and have saved up money in the accounts you are ready to go. Now is the fun part: SPENDING!! You have to do some work on the car? Just transfer the money from you car maintenance fund (this is a real-time transfer) to your ING Checking and head to the dealer or if you are like me and like to do car maintenance yourself, head to Autozone and swipe the debit card.
How is that for a simple budgeting tool?
I just get a lot of pleasure in simplifying my life. If you have ever used the envelope system for budgeting, you should be able to notice the advantages of this system. Like I mentioned earlier, you can probably do this at variety of banks, but I think it would be difficult to find a bank that offered all of the conveniences of ING as well as the great rates.
The negatives of using ING as a budget tool
The two things I would warn anyone trying the ING budget:
- Stay on top of your transfers from your ING savings accounts to your checking. If you do a lot of budgeted spending for a couple weeks and forget to do the transfers, it can be difficult to backtrack. Like most things in life, it works better with regular maintenance.
- You can only transfer FROM the savings accounts 6 times per month. This really hasn’t been an issue for me but maybe once or twice in the few years that I have been using the ING budgeting method. (But, I figured out a simple hack to getting around this restriction.)
If you are interested in signing up with ING make sure you contact me so I can get you a $25 bonus for signing up.
How to budget with other tools
If the ING budget method doesn’t interest you, then you could try the envelope system of budgeting. You could also try these household budgeting spreadsheets or some of the free budgeting software. If that doesn’t work you might want to check out YNAB’s personal budget software
del.icio.us Tags: How to budget , ING Direct
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Nice to find some Christian bloggers writing about money — pretty cool site =) One thing I noticed is that it’s hard to find where your comments link is at.. if you want folks to leave you messages you might want to make it more visible =)
take care!
1mil
Great idea! I had no idea that ING offered a checking account. I’m going to have to look into using your system!
@Millionster
hmm… I think I will have to work on that – thanks for the heads up
Thanks for the information! Why do they give a bonus for just signing up? Is that their new promo?
@Marie Claire
Yea, it is a promo that they have been running for years – not a bad deal
oh yes, i love ing!
Wow, link from The Simple Dollar, you go Bob!!
One word of caution with all savings accounts – you may not transfer money out more than 6 times a month. Although generally not a problem for this system, it has happened to me after too quick of a click and then a correction. You will receive a not-too-nasty letter alerting you that if it happens more than once or twice they will close your accounts.
@glglguy
Yea, that is always a good thing
@Kimberly
You are absolutely right. I have done that myself, it is actually a Government regulation that banks have to abide by. The bank will get in trouble if they allow it too often, so they pass the punishment down the chain.
Are the ATM fees free if I use the ING Direct Debit cards? Any bank can claim to use any ATM because they are part of the Star or Cirrus Network.
@Mark
You know I am not sure – Personally, I always use credit union ATMs, because I have not found a single one that charges a fee for using it. I am sure some do charge fees, I just haven’t found any yet.
Hi, Bob. I read some of the info on ING’s website, but I’m confused about something: in order to have a checking account with ING do you already have to have another checking account?
Thanks so much for your blog. I definitely enjoy reading it and learning the new information that you provide.
@Monica
I knew they did that for the Savings, but I didn’t know the answer about the checking. I did some digging and from what I can tell, your hunch was correct. I did read that they require you to have another checking from a US chartered bank. From working in banking for a few years, I know that a good majority of people who apply for checking accounts were not approved (at least at my bank) for credit reasons. So I assume that is why ING does that. Basically it sounds like they have another bank do the customer screening process for them.
Hi Bob,
This is my first time to your site and it is great. What a wealth of information. The first artcile I read was “How to Budget with ING Direct.” Very good. Thanks for that.
It will merge really well with a plan I use called the “Lack Attack Budgeting Plan.” In it people divide their income into six different “pots” and then spend accordingly. The Six Pots are Tithe, Savings, Fun, Household, Saving for Spending, and Education (or personal growth).
The ING Direct plan can so easily merge with the Lack Attack Budgeting Plan. Very cool!
Thanks for all your input and research!
Susan
@susan
Thanks for the encouragement and your plan sounds like a good one!!
Regarding the overdraft, if you have bad credit, they won’t allow you to use it. And if you try to spend more than is currently in your account, the charge just won’t go through. But a quick call to the company and they’ll do an instant transfer.
I have been giving instruction to people for some time and am preparing currently to give some group seminars in personal finance…how to budget, get out of debt, save, invest…etc. I would be interested in materials either cheap or inexpensive to utilize for this seminar training. Anyone that has ideas … please submit them to me.
Thanks,
Diane M.
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I love this idea and am seriously considering moving over to ING for all the reasons you give. I have one question though – how do you deposit cash or cheques into your ING account? From what I’ve read it appears I would still need at least one brick&mortar bank account.
Julie, you are right, you need a brick&mortar account to open an ING account. From there you can transfer $ to ing or deposit checks via mail…
So, if I’m understanding correctly from the above comment about how to make deposits you can only do that via the mail? OR is there a way to do that from my existing credit union account and have them linked? I wouldn’t think that’s possible but I wondered when you mentioned earlier something about the need for a brick and mortar bank.
Not sure what the mail comment meant, but I phoned ING to clarify and you can only deposit cash or cheques to a brick &mortar bank/credit union, thus the need to retain at least one account apart from ING Direct. You then transfer the money from that account to your ING account.
The rep also kindly pointed out that, because ING have no buildings you can walk into, they cannot offer immediate replacement of debit cards if lost or stolen. He advised this is another good reason to have another account – so you can still access money while the replacement card is in transit.