Leftovers for Breakfast : Completely Random Snippets

I didn't have enough coherent thoughts to make a post on a single subject today, so you get some follow ups on a couple of subjects!

It's time to pay off the Credit Card

The credit card is due next week so I transferred the money to pay it off from ING yesterday. We'll be paying off $1,492.26.

At ING we made $2.29 in interest this month in the sub-account that money came from. There's still almost $400 in the account, so the $2.29 isn't solely from the Credit Card float. The $2.29 doesn't account for interest earned between when I paid off the Credit Card last month and the end of last month. I call it close enough.

We also will be getting $14.92 cash back for this month's charges.

That's $17.21 we wouldn't have if we were going cash based!

The Garden is Still Growing

The first crook-necked squash was big enough to eat. We had it in stir-fry. There are a whole bunch of green tomatoes on the vine. There are several gum ball sized watermelons now, and some fifty-cent piece sized pumpkins.

We planted two types of cucumbers (English types and regular types). One of them has probably close to 100 blossoms in the row, but we're not sure which row is which type.

The Okra, Kohlrabi and newly plated lettuce have sprouted and are growing well.

Learning to Live on A Budget

As of the 11th we'd used up about 2/3 of our budget while being only 1/3 the way through the month. Some of the expenses we'll get back (from the babysitting flex spend account, for example) but some of it is just us learning to live within our budget.

At the start of next month you'll get to hear our reasons and excuses...and our plan to do better.

Freecycle Saves Us Money

Once upon a time we had a bread maker which I had bought a thrift store for $5. We made home made bread for three or four months, decided we were eating too much bread and sold the bread maker for $15.

After the Easy and Cheap Home Made Bread post on Get Rich Slowly yesterday, I decided I wanted to get a bread maker again. My wife agreed as long as we buy and use whole wheat flour instead of the white flour we currently have.

I sent an email out to our local Freecycle list to see if anyone had one they didn't want. Someone responded to my email and all I have to do is drive the 10.1 miles to pick it up. That'll cost less than $5 in gas to get there and back.

New Job : I Am Now Free To Move About the Country

I got a job offer last Thursday. It's for the position I interviewed for last Tuesday.

The salary is $59,000 a year. That's $6,500 more than my current salary. There are less benefits, namely no 401K, or life or dental insurance. There is health insurance though, which is nice.

The best benefit though is that it's a work at home job. Besides getting an office with a window (my current office is solid walls) this means that when we go to move in January I can take my job with me. It means that even in a new city we'll know what I'll be making before hand.

The work is more up my alley too. Less of a computer-for-computers-sake type product and more of a computers-as-a-tool-to-help-people angle. It's a small (6-8 people) company which gives me more autonomy, which I've been wanting.

Mostly though we're just happy that we'll be able to save more towards our house and that we'll be able to move there more easily when we find one we like.

--

I think we might just go out to eat to celebrate, even though it wasn't in our budget (neither was an extra $6500 a year!).

Credit Card Reasons Revisited

Anonymous Says No To $350

Or, How To Miss Out On $29.20 a Month By Not Using Credit Cards

I recently listed 8 reasons to use a Credit Card which caused someone under the bravery of 'Anonymous' to call my advice crappy.

I understand that Credit Cards can be trouble for some people and I have no problem with people disagreeing with me. I did however take issue with these two segments of his response:

Why not keep the money in a high interest account and transfer it online,free, to your checking account as needed. problem solved
...
Rewards,benefits. Virtually useless. For most people the rewards/benefits do not outweigh the risks with credit cards

Great idea! And if one wasn't using a Credit Card at all, I'd agree. However, I found the line 'Virtually useless' rather suspect. I decided to run an analysis and see for myself (and for you, dear reader) what exactly is the financial benefit of using a Credit Card in the manner I use it.

Remember, our financial plan says to use the Credit Card wherever possible (and to pay it off on time, every time).

My analysis involves the following three scenarios:

Scenarios Under Analysis

Checking Account Only

• One 0% interest, $0 fees checking account


• Salary goes in, checks come out

Checking Account and a 3% APY Savings Account

• Salary goes into Savings


• Money is transfer ed over as needed

3% APY Savings Account, 1% Cash Back Credit Card

• Salary goes into Savings


• All expenses go onto Credit Card


• Credit Card is paid off at the end of the month

The Results!

With a monthly salary of $3,013.26 and monthly expenses of $2,187.50 using a 1% cash back credit card and a 3% APY savings account I will make $29.20 more a month than if I were just using a checking account. I will make you $24.96 more a month than if you I were using a checking and savings account (but no Credit Card).

See the whole sheet for a more detailed look including assumptions I made to simplify the calculations.

Table: Monthly Difference Between the Three Scenarios

Blog Sized Excerpt	Checking Only	Checking and Savings	Savings and Credit Card
Vs. Checking Only	$0.00	$4.24	$29.20
Vs. Checking and Savings	-$4.24	$0.00	$24.96
Vs. Savings and Credit	-$29.20	-$24.96	$0.00

A Partial List of Flaws

• Not everything can be paid for with a Credit Card.


• Expenses aren't actually evenly distributed throughout the month


• It is possible to get an interest bearing checking account


• Using multiple savings accounts will give you finer grained control over transfers to the checking account


• Some people really really really hate credit cards, so this won't work for them


• Some limitations may apply to 1% cash back purchases


• Carrying a balance even once will wipe out months of returns

Conclusion

I stick with my recommendation to use a Credit Card. I realize that my numbers are rough estimates, but I believe that they are strong enough and close enough to show that there is a clear financial benefit to using a Credit Card.

Using a Credit Card isn't for everyone, and I respect that, but just because they don't work for you doesn't magically make them crappy for everyone.

Comprehensive Financial Planning: Initial Thoughts

I've been slowly getting up to speed on how money works, on the importance of budgeting and appreciating the principle of compound interest. In this learning process I've realized that there are several expensive milestones which I should be planning for now. As I look at these events, I realize that I need a comprehensive financial plan.

Some Large Financial Milestones

• House


• Kids College


• Sons' Missions


• Helping my kids become financially stable


• Retirement

Some of these are so near it's scarry (House). Others are so far off it's hard for me to be able to estimate how much I need to save. All of them will require large amounts of money. Some (retirement, college) can get extra help from special types of accounts (529, 401k, IRAs, capital gains vs. earned income taxes) if I plan wisely.

Complicating Financial Factors

There are complicating factors for me to consider when thinking about these financial events. Markets will change, my job will probably change, I don't know how many kids we'll be having.

Side Note : Inheritance assets

On a trip last weekend to visit my grandpa-in-law I was also reminded that there are some people in my life who will be leaving something to me in their wills. My father and grandpa-in-law have potentially large assets, possibly my grandpa too.

Inheritance assets are hard to include in a comprehensive financial plan since there's no way to know when someone is going to die, or how much their assets will be worth when they do.

How To Get Started

I don't know how I'm going to make my comprehensive financial plan. I think that I'm on the right track to create it though. The first steps are to 1) get my day to day financies in order then 2) understand the events I need to be planning for then lastly 3) make educated guesses and estimates about the situation.

In a few weeks you should see an initial revision of my plan. If you have any suggestions before then, I'd love to hear them.

Groceries Without the Games

What's the Grocery Game

If you've been to a couple of personal finance blogs you've probably heard of "The Grocery Store Game". If not, here's a story on it over at Get Rich Slowly. The idea is that you combine coupons in such a way that you get most of your groceries and toiletries for very little cost.

It's Hard Work

Frankly, it seems like a lot of work. You have to go through all the store fliers each week, find the best coupon deals, find the manufacturer's coupons that match with the fliers coupons, etc. Oh. Then you have to drive to each of the different grocery stores and get all those deals, figure out what meals you can make with whatever products you may have been able to get for cheap.

As noted in the comments of the story over at GRS, most of the goods are actually toiletries or unhealthy foods. For me, I don't think it's worth the work.

Saving 14.5% On Groceries With (almost) No Work

As you'll see below, I save 14.5% on groceries before coupons even enter in to the equation. The process I use depends on the store having the two programs I use in place, so my process may not work for you.

Of course, playing the grocery game depends on you having the right big-chain stores in your area anyways, so I think this is a viable alternative for many people who could play the grocery store game.

Full Sheet : http://spreadsheets.google.com/pub?key=pFOJsib3bG6Gbi-GWZVFXRA

Here are the factors that let us save 14.5% whenever we get groceries:

• Grocery Gift Cards
  • Our grocery store sells gift cards which give you a 10% bonus. Eg. Buy a $300 gift card, get a $330 gift card. We bought $1200 of cards five weeks ago.


• Buy the Gift Card on your cash-back Credit Card
  • We get 1% on our Credit Card purchases. That's $12 back on our $1200 purchase


• 5% Student Discount Card
  • The grocery store has a special student affiliate card which gives you 5% off your purchase beyond the normal affiliate card price. My wife is still a student, so I don't think this is dishonest in the least.

Affiliate Card Price Caveat

The grocery store we go to doesn't always have the best overall prices, however when using the affiliate card the prices are competitive with other stores in the area. For this reason, I do not include the "mark down" that the affiliate card gives us. That mark down is only present because they mark the prices up for anyone who doesn't have the card.

Downsides

1) Be sure that the grocery store you do this at is one that you like, otherwise you get stuck with $1200+ of gift cards locked up in the one store.

2) It's easier to be spendy if you're spending gift-card money than real money.

3) You have to put down a large chunk of money right at the start. If the 10% bonus is going to be an ongoing thing, we will buy the smallest denomination possible, and leave the rest of the money in our ING account to further stretch our grocery money.

Real Life

Between May 9th and June 16th we bought $306.94 worth of groceries for a cost of $265.08. Considering that we had agreed to increase our grocery spending (we did) and decrease our eating out (we did!) we are about where we expected to be for grocery spending for the month.

Other

I have no idea where the extra $41.86 I saved went. Probably into my ING account...

8 Reasons to Keep Your Credit Card

Are Credit Cards Evil?

Credit Cards catch a lot of flack in the personal finance blog world and deservedly so. Many people have fought or are fighting mountains of credit card debt and feel that credit cards are unsafe.

Brack over at Goliath Debt, David Income is one of those people fighting back from debt. He is working on paying off "$68,000 in credit card debt, student loans, and a car loans". He recently asked if he should Cancel the Card? Or Be Prudent?.

Despite the risks of credit card use I still think they are a great too. I can't imagine having to carry cash or a checkbook everywhere so I am going to assume that the decision is between Credit Cards and Debit Cards. I think that keeping a Credit Card and being prudent with it is the best choice.

Eight Reasons To Use a Credit Card

Liability

The most you can be liable for a stolen credit card is $50 (if you report it correctly). With a debit card the limit is your bank account balance (plus overdraft!). See http://www.ftc.gov/bcp/conline/pubs/credit/atmcard.shtm

Built in Overdraft Protection

You have $50 left in your bank account and you're getting paid tomorrow. You buy $100 at the grocery store. With a credit card, there's no problem. With a debit card you will very likely have an overdraft charge.

This is assuming that you don't blow your credit limit of course. That kind of use wouldn't be prudent though.

Self control

As you use your CC wisely, you will improve your overall self control. This will benefit you in your financial life and in other areas of your life.

Earn Interest

It's seems silly to me to keep hundreds or thousands of dollars in your checking account when it could be earning money in a high-yield savings account or a money market account.

I put my paycheck into an ING savings account earning 3% APY. I pay off the credit card a few days before it's due. That gives me 25 or so days a month to have $1000 or more extra dollars in my savings account making me money. If that money was in my checking account, I'd make zilch.

Rewards

As I posted a few days ago, I am currently getting 1% cash back with my credit card. I'm not aware of any debit card that offers rewards, but if you are, please tell me!

Credit Score

If you have large loans in your immediate future, you probably want everything in your favor for a lower rate. If keeping even an unused no-annual fee credit card open will keep my credit score higher and make it easier to get a lower interest rate on my mortgage, you can bet I'm going to do it.

Benefits

Some Credit Cards offer benefits like car rental insurance. This can save you money if you use these services anyways.

Emergencies

If you do have an emergency, you will have the Credit Card to fall back on. No, it's not idea and yes you should use your emergency fund first, but debt is better than homelessness, missing meds, or other urgent situations.

Prudence is a Virtue

Essentially what you need to do is treat your Credit Card like a Debit Card. You can even write DEBIT on it with a sharpie if it will help you be responsible.

I come from a town where hunting is quite popular, but there's still a lot of controversy over guns. It seems that feelings among personal finance bloggers are similar, and I take the same position I do on guns:

They are useful tools if you use them right. If you use them incorrectly they are incredibly dangerous. If you or someone in your home can't use them safely, get them out. If everyone who will be using them can be safe with them, then by all means keep them around.

Driving Adds Up

Driving Cost Estimates

Blah blah blah price of gas blah blah blah. You already've heard all that.

On the Road Again

Our Chevy 2007 Malibu gets roughly 24 MPG city, 30 MPG freeway. Given the cost of gas, the miles per gallon and a couple of quick lookups on Google Maps, I now know how much it's costing us to go places. Like, say, $0.48 to visit the inlaws ($0.24 each way).

I kept separate columns for City and Freeway miles, and we just have to think for ourselves which trip belongs where.

Run the Numbers

This is a stupidly simple spreadsheet, but you might as well see how much you're paying for yourself.

1. Download it as ODS, XLS


2. Enter your MPG and local price per gallon. Get your MPG estimate at http://www.mpgbuddy.com/ if you don't know it


3. Use the dollars per trip to estimate the value of using public transportation, ride sharing, getting a new car, quitting work (just kidding), etc.

View the whole thing online

Next Steps

I have no idea how many times we drive different places. We should start tracking that so we can see if we can cut out trips to the inlaws ($0.48!), to the grocery store ($0.12!), etc.

This week I will also be checking our tire's air pressure and getting those pumped up correctly. We are also working to drive more smoothly to improve our mileage.

Scooter Love?

Lots of people are getting scooters thinking that they're going to save a ton of money. At least for us, this wouldn't have been the case if we'd bought the scooter ourselves. My scooter is a 2006 Honda Helix which was $5,000 new. Since I only drive it in the city, the money saved per mile is $0.07. At that rate, I'll need to incur no other expenses for the scooter (oil, tires, insurance, etc.) and drive 71428.57 miles.

That's not going to happen, and so I don't think I can recommend getting a scooter (at least at this price) in addition to a car.

If we hadn't been given the scooter we would have needed a second car eventually. In the case of buying a scooter instead of a second car, it can make sense.

Don't forget to get a helmet.

Warily Eyeing Credit Card Reward Programs

Are Credit Card Rewards Programs Worth The Trouble?

Currently we have two credit cards. One we've had since we got married, almost five years ago. The other we got when we switched to the credit union.

The old Visa card is through a large national bank, and is pretty crummy. 24% interest, no rewards. The only reason we haven't closed it is that it's the oldest piece of our credit history. We'll keep it around until our mortgage is secured, then we'll close our account with that bank.

The newer card gets 1% cash back at the end of the year. It's convenient that we can just transfer money from our savings or checking to the credit card account, all in one spot.

Our Spending Habits

Neither of us likes carrying cash. I hate having things in my pockets, and she loses stuff in her purse. As a result, we use our credit card everywhere we can, our debit card where that doesn't work, checks where debit cards aren't accepted and cash as a last resort.

We always pay of the entire balance each month.

Current Rewards Program

I guesstimate that this year we've been spending about $2,200 on our credit card each month. If 1% cash back works the way I'm assuming it does, that means we'll get $264 back at the end of the year (.01*$2200*12).

Other Reward Options

Thinking that I'll get $264 back and knowing my average monthly spending means that I can now start comparing other credit card offers and maximize my rewards. Some cards appear to offer really good deals with reasonable APRs and no annual fees.

Let's pretend for a minute that I really did get 5% back on all purchases (there are a couple of exceptions). Spending the same amount each month would then get me $1320 cash back. (0.05*2200*12).

Is this really how it works? If I use the card responsibly (paid off in full each month!) do I really stand to gain that much in cash back? Does anyone have experience with any of these types of cards?

Other Factors

Our credit union is local. We will be closing our accounts when we move in January. Since we don't like our other credit card or the bank it's through, we'll need to get a new credit card anyways.

The cards I listed all require having 'Excellent' credit. My credit score according to Credit Karma is 811. My wife's is similarly high. That along with a car loan in our name and regularly paid cell phone bills I think might put us in the 'Excellent' category.

I'm not fan of credit card hopping. I don't want to switch or open cards every year in response to good deals, so I don't care much about the introductory bonuses or APY; I want to find the card that will be best in the long run.

I've heard Dave Ramsey's and JD's calls to get rid of credit cards, but that's not how we live. We have both been pretty financially reasonable, even before we had a budget. We treat credit cards like we would guns: useful but dangerous tools that need to be treated with respect.


I'd love to hear other's advice and experience with these or similar cards.

Is It Time to Switch To CFLs?

I've known for quite a while that CFLs (Compact Fluorescent Bulbs) were cheaper in the long run, but I was ambivalent about the savings, and was under the impression that it wasn't that much of a difference anyways. Now that I'm trying to become more disciplined and save money wherever I can, I decided to do an honest evaluation of the potential savings.

We are likely moving in January, so I wanted the CFLs to pay themselves off before then since I don't know what kind of lighting our yet-to-be-found new house will have.

My plan was to a) analyze the costs and b) stick all the existing incandescent bulbs into a shoebox till we're moving out and take the CFLs with us.

We now have all CFLs, except for the two porch lights which are almost never used and which are difficult to replace anyways. If my estimates and calculations are correct, we should save about $10 a month and recoup our costs in four months.

Below is the spreadsheet I used for my calculations. Please let me know if you see any errors. The in-line view doesn't have quite the whole sheet. Please view it on Google docs or download it to see the full thing.

(Post continues after spreadsheet)

View it, Download it as ODS, Download it as XLS.



As you may have noticed, the longer you leave your lights on the sooner you recoup your costs. The obvious solution is of course to leave your lights on all day long. You'll be saving money before you know it! ;-)

There are some minor issues to switching to CFLs. If you're concerned about the color of your lighting, you may want to buy just a couple of bulbs and try them first. The CFLs, though they claim to be pure white, daylight or whatever do seem to have more of a blueish tinge than the incandescents.

I put the bulbs in our house last night, and due to the color of the glass around the light fixtures, the color temperature change isn't that noticeable, except in the bathroom, where we have a built-in vanity with six bare bulbs surrounding it.

When my two year old walked into the bathroom this morning, he said "We got new walls in the bathroom?", "No" replied my wife. "Somebody painted the walls in the bathroom?" returned my son. The color change isn't bad, but it does exist and may take some getting used to. For $10/month though, I'll do it.

Categorizing My Monthly Spending

When we used our accounts at Wells Fargo, we could see a categorical breakdown of our expenses, but only for the Credit Card. My current Credit Union doesn't offer this functionality, but I had a driving need to know where my money was going.

Initially I would download the .csv (comma separated values) files, and manually sort them out into categories on a spreadsheet.

Of course, that grew old quickly, and I was forced to search the internet for something better. Coming up empty handed, I wrote my own script to sort out my different expenses into categories.

You run it on the command line like so

./statementToCategories.pl list.csv of.csv account.csv statements.csv

It will ask you how to categorize different expenses, and when it sees them again, it will remember what you entered last time. When it's done, it will ask you what to save the file as, and will create a .csv file with the different categories, and how much was spent in each category. It will also tell you how much you spent in each category in an average month.

With that data you can make charts, make plans and moan about how much you wasted on eating out....

You can find the script here:

http://richerandbetter.blogspot.com/2000/01/statementtocategoriespl.html

The script is in Perl, since that's what I'm comfortable with, and it probably won't work as-is for you, unless your bank/credit union lets you download .csv files with the same format as mine does, and you're running Linux. You are free to edit the script however you want and redistribute it.

I have no idea if the .csv files I download are some banking standard, or if they're just the way my credit union decided to make them.

What Does a Pay Stub Look Like?

How Much Do You Really Get From Your Paycheck?

What does a real world pay stub look like? When I finally started getting real paychecks, I was initially let down. I had very naively divided my salary by 24 pay periods and imagined all the cool stuff I was going to buy.

Reality is a bit of a letdown sometimes. I actually only end up with a little over half of my salary coming to me.

So, without further ado, here's my current pay stub (with certain data blanked out!)


Green is income, red is expenses.

At the top left, Salary is the amount I supposedly get each pay period (every two weeks). It works out to be about $50,000 per year.

At the bottom left is the amount that gets deposited into my bank account every two weeks.

43% of my salary doesn't end up in my pocket!

It would be difficult to argue with the taxes portion of the paycheck, but let's take a closer look at the section titled "Deductions From Gross" and "Non-taxable Company Items".

Deductions from Gross

Deductions from Gross are voluntary amounts I choose to have taken out of my paycheck. As much as it stinks to get that much less cash, there are good reasons to get those amounts removed.

Less Taxes:
These deductions are taken out before taxes are calculated. It appears that the taxes are about 15% of the taxable amount. If this is correct, then I pay about $100 less in taxes each pay period by deducting these amounts from my gross paycheck.

What are these accounts though?

Health Insurance - Employee:
This is a medical 'flex spend' or 'cafeteria plan' expense. We estimated how much we were going to spend on medical costs this year, and are having that amount removed from my pay over the course of the year. This account can be used for dental work, eye doctor visits and glasses, birth and related expenses etc. Since we knew we'd be having a c-section baby this year, we knew at least how much we'd be spending.

FSA:
This Flex Spend Account is for child care. Since I'm at work and my wife is at school, we needed someone to watch our kids for part of the day most days of the week. With this account we can pay for child care from our pre-tax money.

401(k):
We are currently putting in 15% of my gross salary into our 401(k). We'd like to retire well, so we've got to make sacrifices now.

Even though these deductions don't come home with me, two of the three are or will be used by me during this year.

Non-taxable Company Items

This is the section which shows non-salary benefits that the company is providing. It appears that they company is paying $306.07 per pay period for insurance for my family.

They match 100% of my 401(k) contributions, up to 3% of my salary. It's true then that I am not being matched completely with my 401(k) donations, but at least it's something.

Take Home Per Year

In all my excited imagining about how to spend my money, it turns out that I should have been thinking about taking home just less than $30,000 per year instead of the $50,000 gross salary figure.

So, if you just barely landed that dream job with the huge salary, don't make too many plans till you carefully review what you're actually bringing home each month.

Good Books In the Home

When I was a kid I liked to read. I would read almost anything I could get my hands on from Medical text books to Shakespeare to Alistair MacLean. I would peruse the local library, but most of the books I read were ones I found at home.



I've often wished that my parents would have had more classics on the shelves. The classics that are sited time and time again by professors, by lecturers and by insightful people everywhere.

While I don't yet know if my kids are going to be voracious readers, I've decided that I am going to at least make it possible for them to be if they so choose. In that vein, I've been stopping at the local thrift store every month or so and picking up any classics I come across. They are usually priced $0.50 or $1 for a paperback, $2 to $4 for a hardback. The average price comes out to about $1.00 per book.

JD over at the Get Rich Slowly blog is usually against buying more books than you will actually read, but I see these as an investment. If having lots of good books around increases the chance that my children will enjoy culture and a love reading, I'll make that investment and take the risk.

And just maybe I'll learn to enjoy reading again.

Our financial strategy

Goals
Before figuring out a financial strategy, we had to figure out our goals. Our goals are:

1. Live within our means
2. Pay off debts before they cost us interest
3. Save for a house, and for emergencies

Summary
Here's a high level summary of our specific strategy, based on those goals:

1. Pay off debts first
2. Keep money where it will earn as much interest as possible while remaining as accessible as needed
3. Use a budget to maximize the amount of money we can save

Implementation
And here is our specific implementation, as of May 15, 2008:

When we get a paycheck:

1. Put tithing and offerings (10% of paycheck + offerings) into checking (we pay with a check)
   
2. Pay off the balance on the credit card (also use funds from the Money Market account, if needed)
3. If it is the start of the month, put $600 for rent into the checking account
4. If there are any other bills, pay those
5. Put $100 "we don't accept credit cards" money into checking account
6. Put remaining money into the Money Market Account

Spending:

1. Pay with the credit card when possible
2. Remember that there is only $100 spendable in the checking account
3. For non-standard expenses (medical, tuition, etc.) which can't be paid with credit card, transfer needed funds from Money Market to checking.

Money Market Surplus:
When more than $500 accumulates in the Money Market account after paying all expenses, transfer that money to a higher yielding (but harder to access) account. We are currently putting our money into CDs, but we have been looking at high yield online accounts, such as ING's.


Results

1. We earn 1% back on Credit Card purchases
2. We earn 1.144% on the money sitting in our money market account
1. 1 & 2 together effectively create a 0% loan from the credit card which is paid off each pay period (bi-monthly).
3. We keep enough money liquid to pay expenses for each two week period. This reproduces the paycheck-to-paycheck feeling we've lived with for so long
4. Money we don't need immediately goes to higher earning accounts while being protected from our merciless spending

We have been operating with this strategy for the past two months (April, May) and have found it fairly efficient so far. We know how much we have to spend because we can compare our credit card balance to the amount in our money market account.

We will likely modify some of the details going forward, for example we are looking at options to maximize our 'extra' money. CDs aren't giving a very great interest rate right now. We will also consider getting a credit card with better rewards once we determine which one will be the best for us.

Background: An overview of our current accounts

We have several accounts which we use to our benefit. Our main bank is the local credit union. Their service is excellent, and their rates are good. The real benefit for us though is the one-stop web page where we can manage (almost) all our accounts at once.

Our accounts at the credit union, their balances [amount] and the interest they earn (interest%,APY%):

1. Savings Account [$0], (0.797%, 0.80%)
2. Money Market Account [$2,308.40], (1.144%/1.15%)
3. Checking Account [$765.02], (0%,0%)
4. CD [$6,051.83], (3.057 %3.10 %)
5. Credit Card [$1,671.80], (11%?)
   

We also have an account at Wells Fargo. We keep it open only because the credit card there has been open for about three years longer than our other credit card, and we don't want to jeopardize our credit score till we've secured our house loan. Our accounts at Wells Fargo:

1. Checking Account [$100.08], (0%,0%)
2. Credit Card [$0],(21%?)
   

Other money we have includes about $150 in super emergency cash tucked away at home, a couple of savings bonds in our children's names and a plastic pig full of change.

You may have noticed that in the previous post I said we don't carry a balance on our credit card, yet there are over $1500 of charges on it at the moment.

On Tuesday I'll go over our current financial strategy and show you why.