By: Revanche

Our 2019 savings plan

February 25, 2019

When I was 7, my parents took all of our money, my life savings from New Year gift packets included, and sank it all into Dad’s business venture. I would call it “theirs” but we all know it was Dad’s brainstorm and his thing. Though I had no use for the money other than buying postage stamps, I was still sad about losing my stash.  Even then, I was a saver (*cough* money hoarder). Though, I could have blown the whole thing on books if I’d known how to get myself to a bookstore. I figured out how to take the dog to the vet for shots when I was a preteen, I think the bookstore mystery would have been solved in a jiffy with money in hand.

Once in a while I idly wonder how much I’d have today if my savings had been invested back in 1980-something. It was probably somewhere in the neighborhood of $2000 or $3000 by the time I was seven. Our family tradition tends to gift young kids a lot of cash in your earliest years when you have the least use for it. It’s confusing but a proper steward of that money could have made a real difference with that money.

In any case, that money went to funding a business venture that supported our household for almost ten years and then it all disappeared. The money going away as easily as it did impressed on me the importance of saving relentlessly. That and my health problems.

Today, we make good money. We also live in one of the highest COLAs. Go us. *snort*  It wasn’t intentional but it is what happened.

Though we bought in the cheapest possible neighborhood, by the time we’ve paid the two biggest fixed expenses of housing and childcare, we’ve paid out a whole salary. We always save first of course, but once the savings and slew of other deductions come out, and the bills are paid, we live on what’s left. Somehow it’s not all that much when you consider what we started out earning.

Since we work darn hard, and even harder to budget and save, I insist that our savings work hard too. There will be no lazing about in savings accounts, losing ground to inflation, for our cash.

This year, this is what we’re doing:

1. We keep enough cash in savings in a high-yield savings account at Ally currently at 2.2% APY (insert lament about those 5% APY savings accounts from before the recession) to cover any medium sized emergency. Not enough to buy a car. Maybe a cheap car.
2. Our formal emergency fund must be easily accessible so that lives in a CD ladder ranging from 2.40-2.85% APY. This covers a year of expenses in the event of job loss and we can access that cash within a week by breaking CDs.
3. As those CDs mature, we use that cash as seed money to earn bonuses like this HSBC Welcome Deposit promotion* and the Citi $200 Basic Checking bonus** (depending on how much work it requires) before I roll them into a new CD.
4. All other savings outside of the cash stash and the emergency fund, like our side money, earned dividends,  and savings interest, all go into our investment account. Our rental income stays in a separate account entirely and doesn’t mingle with the normal household income because that income has to cover any real estate related expenses.

*****

*HSBC Promotion Details: We received a targeted mailer for HSBC – a $10,000 deposit earns $375 after 3 months of deposit, paid out 8 weeks after fulfilling that 3 month timeline. With one of our largest CDs maturing, I went to their site to do my research. The targeted mailer was $25 more than what they offer online, but I did the math to see whether we should take that offer or go another route. With $27,500 in seed money, I could go three different ways:

Option 1, the targeted mailer. Lock up $10,000 at HSBC for five months and put the remaining $17,500 in a 14-month CD at 2.85% APY: $583.25 in CD interest + $375 bonus = $958.25

Option 2, 2 Choice Checking accounts, one each for PiC and me. Lock up $1500 for each account and put the remaining $24,500 in a 14-month CD at 2.85% APY: $816.54 CD interest +$200 bonus +$200 bonus = $1216.54

Option 3, 2 Advance Checking accounts, one each for PiC and me. Lock up $10,000 for each account and put the remaining$ 7,500 CD in a 14-month CD at 2.85% APY:  $249.96 interest +$350 bonus +$350 bonus = $949.00

Option 4: Just dumping all $27,500 in a 14-month CD at 2.85% APY: $916.53

I didn’t factor in the fact that once the five months are up, we’ll roll the seed money and the bonus money into a new CD.

Summary: This was a total PITA – HSBC’s site and process are utterly exasperating. They ask for way too much information and it’s far too involved. As a security question, they asked about accounts opened in 2004. I don’t remember accounts opened 5 years ago, forget 15 years ago! I was already well stuck in so I toughed it out but they’re really making me work for that bonus.

They rejected my first application out of hand because my credit was all locked down but didn’t tell me which bureau they would check or even give me a chance to unlock it for this application. ANNOYING. I shelved my sniping and handled PiC’s application and deposit first.  After that was done, two weeks later, I unlocked all my reports for a minute to submit my own application again. BTW, I hate the credit bureaus. They are so focused on making money off us and you can tell by how complicated they make it to just get to your free security freezes. Transunion was the least annoying offender of the three but they can all go kick rocks.

After my trial deposits were done, they made me call them to verify my info all over again (ugh) and then asked for my license to be emailed to them. I’m not in the habit of sending that kind of information to non secure message boxes, since HSBC themselves JUST violated someone else’s privacy sending their application information to MY email address, so I kept the person on the phone while I encrypted that file and sent it. Of course their email was down so I couldn’t just give them the dang password, I had to call back yet again. The second person didn’t want to help me so put me on hold for half an hour. Awesome. The third person took care of the problem in under 6 minutes. World class customer service my left pinky toe. We’re willing to be convinced of staying with banks and credit cards based on their service when we go for their bonuses – HSBC’s “service” guaranteed we won’t be back.

** Citi Promotion Details: Open a new eligible checking account in the Basic Banking Package between 1/1/19 – 3/31/19.
Within 30 days of opening your account deposit $5,000 New-to-Citibank funds into the new checking account.
Maintain a minimum balance of $5,000 for 60 consecutive calendar days.
Get $200 deposited to your account!

Summary: It took me ten minutes, tops, to complete the application process online for both of us. Mine was immediately approved, his had to go into processing and we’d hear in a week by mail.

*****

It’s possible that I’m missing some savings growth opportunities but I also want to keep things relatively simple.

:: How are you growing your savings this year?

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