The Millionaires Club - Saving $$ challenge!

[higgies]

Re: The Millionaires Club - Saving $$ challenge!

Hey guys! I thought I'd just throw out the whole online bank thing. Typically, there are no minimum balances, no fees, and the interest rates are MUCH better than regular bank savings or money market accounts. I've had an account online with ING for a number of years and It's the best thing I ever did. I can set an automatic transfer from my checking to this account, and I'm earning 4.5% (most CDs can't even come close to that). Another good thing is you aren't tying the money up in something like a CD. You have access to it and can get it transferred to checking when you need it.

Just thought i'd throw that in there.

I'm super anal about tracking my money, even if I'm not so good about not spending it! I'm trying to get a better handle on my spending now that I need to pay off things for the upcoming wedding.

[biogeek]

Re: The Millionaires Club - Saving $$ challenge!

MP, hope you get your money back! What a hassle!!!!

higgies, I agree with you on on-line banking. Until recently, my Citibank savings was earning 5.0% APY compared with 1.0% or less with the local banks. The rate just droppped to 4.75%, but that's still pretty good in this current market.

[sadie147]

Re: The Millionaires Club - Saving $$ challenge!

Thanks Higgies! You know in the past I'd considered opening an ING account but have never known anyone to have one. The rate is only 3.5% here but that's still better than my savings account! I just used their comparison tool, apparently i'm only getting .1% compared to their 3.5. hmmm I think I may consider that for my savings!
Miss phode sorry you had to go through that. I would hate to have to get all new bank accounts .

[Miss Phode]

Re: The Millionaires Club - Saving $$ challenge!

I have a question. With the ING type accounts, is the high rate of interest paid every month, or is it just once a year?

Let's say I put $20,000 into one of those accounts at 4.25%. Would I earn 850 a month or what?

[biogeek]

Re: The Millionaires Club - Saving $$ challenge!

No MP. Usually when you see 4.25% or whatever, that's its APY. It allows you to compare rates & terms with other institutions in an apples-to-apples manner.

Hope that makes sense...if not I'll go into further detail.

[Miss Phode]

Re: The Millionaires Club - Saving $$ challenge!

So how much do you get a month bio?

[biogeek]

Re: The Millionaires Club - Saving $$ challenge!

So you take 4.25% and divide it by 12 to get the monthly rate. I have no idea how often the interest is compounded, so we'll just do it for one month.

0.0425 divided by 12= 0.00354% times $20,000 = $70.83 for the first month. Then it will get a bit higher each month due to compounding interest, assuming monthly interest paid.

If I made a mistake with above, please feel free to correct it.

[higgies]

Re: The Millionaires Club - Saving $$ challenge!

You are correct. It's the APY, and it is paid and compounded monthly.

Almost everyone I know has an ING account now. The interest rates for my regualr bank savings is only like 0.25%! Can you believe that? I haven't had a savings account at a bank in over 20 years I think.

[biogeek]

Re: The Millionaires Club - Saving $$ challenge!

I looked into ING, but chose Citibank b/c they were offering a free IPOD if I held a free checking account for a year. That was a no brainer. So it was really easy for me to open a savings account with them at their kick-butt interest rate.

MP, When you're looking at interest rates, you gotta know if they're giving you APR or APY. It makes a difference in how interest is calculated. I don't remember how to calculate APR, but for APY, it's simple: (1+periodic rate)^(# of periods -1)

So for higgies, it would be (1+0.425)^(12)-1.

[boonie stomper]

Re: The Millionaires Club - Saving $$ challenge!

Breakfast today was 3 eggs, 2 slices of venison sausage and 2 slices American cheese. It cost roughly < $1.25, plus stove heat. Could anyone beat that price?

[higgies]

Re: The Millionaires Club - Saving $$ challenge!

Hmmmm..yeha, maybe...I don't know... All I did was just check my interest earned last month divided by the principal and then multiplied by 12 and it came out to the 4.5%. ANYWHO...

Yeah, I don't think Citibank was doing that back when I started this account. I've had this for a number of years. Now it seems every credit card company and a couple other online banking services have started the same model.

One other thing I've found indispensable for managing my money is a software package. I use Microsoft Money, have done so for as long as I can remember. It really helps you get a good picture of what you have, what you owe, and how you can manipulate things to really work more to your advantage. Although like Ftiday, I think I am a little obsessive about it.

[Fit4me&kids]

Re: The Millionaires Club - Saving $$ challenge!

Ok...I'd like to join this challenge! Hubby and I are trying to be 100% debt free ASAP...After reading up the several suggestions here and reading "Frugal Living" I've decided to do the following and have everything set up now:

-I have $30 a week transferred now-$10 to each kid's savings account.
-I have $10 a week transferred into our savings account.
-Set up $10 a week Xmas club

All are transferred automatically each week from bank.

-I called the phone company, evaluated our phone plan, dropped to cheapest, excluding long distance (which is free on cells), AND, by bundling my home internet (and upgrading to DSL at home-cancelled dial up service elsewhere), I am now actually saving about $8 a month on this. (I also checked with dial up service company on upgrading to DSL and bundling telephone service..their rates were higher)

-Checked cell phone plan for hubby and made sure it was best plan for minutes used. Changed to new plan. Will save $6 a month. (my work already pays for my phone)

-INSURANCE: Called car/homeowners insurance company...I now have payment auto deducted from checking each month...savings...$5 a month. PLUS, our rates went down for upcoming renewal in March...savings will be $30 EACH month more!!! (I did shop around for rates as well and this company has best rates and service hands down).

-Called newspaper...normally get 7 day delivery for $13 a month...I am a MAJOR newspaper reader from front to back....now set up as auto deduct from checking at $10 a month....savings $3 a month.

-I want to see if I can continue to beat my coupon usage at the store (this is a game with me to see if I can beat my prior week savings...I have a family of 5 and can save about $30-45 average a week in coupons!!!--The highest I've ever saved was $63.) I really watch my per unit price and shop between my local grocery store, BJ's, and walmart. **I will now transfer the savings each week from coupons to our savings account.

-Changed to budget billing with fuel company. This should help with my budgeting of fuel money with this darned weather. No savings but predictible payment...reconciles at end of year if over or under.

-I called the credit card companies that we have and asked them if they could lower any interest rates, even if for a short time, and 2 of the 3 have done so. We don't have much out there to pay off...but hey, a reduction of interest helps.

We already use Quicken and do the change jar. So, I pretty much know where our money goes. Anything to reduce the money going OUT certainly helps!

Well, I think that gets me started. A couple bucks each month helps! Any other good suggestions?

[boonie stomper]

Re: The Millionaires Club - Saving $$ challenge!

SPEAKING of money goig out... someone once told me that if you open your front door on a day with a big temperature gradient you could lose $$ worth of heat or A/C in less than a minute. Holding a door open, a draft gets established which increases exponentially in the first few seconds. Close doors within 7 seconds if possible when entering/exiting to save fuel!

[Fit4me&kids]

Re: The Millionaires Club - Saving $$ challenge!

The things you know girl!!!!

I'll remember that as I'm herding my troops out the door. Actually, we just started using the back door here lately as the front door had such a draft with all the winds here we sealed it off....more fuel bill savings!!!

[biogeek]

Re: The Millionaires Club - Saving $$ challenge!

I should update that APY calculation as it's slightly off. Guess I didn't have enough coffee in me or something. so....

To calculate: APY = (1 + APR/n)^n - 1. This will now allow you to compare interest rates fairly among banks.