Financial Friday #5 – High-Interest Savings Account

Promises, Promises

As promised from last week’s lengthy post, I am talking about high-interest savings account. 

“How boring!” You might say.  And yes, I will agree and disagree.  Savings account were white noise as far as I was concerned before I got my big vision in place, but now every penny maximized is so exciting to me and brings us that much closer to reaching our goal.  So, you are going to feed off my excitement, and maybe by the end, you will be excited as well. 

Why Do I Need a Savings Account?

I can’t answer for you, but here’s why I have a savings account.  It is nice to keep my active money (money flowing in and out for feeding children, toilet paper, dog stuffies, etc.) separate from my fire-fighting money.  Fire-fighting money just sits there eating tortilla chips and playing card games with the rest of the fire-fighting money until the time when you need it for the big event.  While it’s sitting there, it might as well do something productive for you and earn a little interest, but its ultimate purpose is to be there to spring into action when you need.  

Photo by Felix Koutchinski on Unsplash

Have the Hose Handy – Accessibility

Fire-fighting money’s primary role is to be accessible within one to two days of requiring its services.  You need to know that when stuff goes down, you can get your hands on that money quickly.   That is why you don’t tie up this money with your investments.  You want no strings, no fees, easy access.  That fire-fighting money better be suited up and ready to go when needed without having to go out and pay for a fire truck.

What Constitutes Fire-Fighting Money

Fire-fighting money to me is anything that needs to be paid within one year.  Examples of fire-fighting money for us are car insurances, membership fees, property taxes, self-employment taxes, emergency fund money and soon may also include our house insurance and life insurance dues. 

Get the Longest Hose – Maximize

As always, maximize!  Don’t just go to your bank and accept the interest rate their account allows.  With technology and bank transfers, the savings field is so much more diverse than accepting the first rate offered.  Our bank currently offers a rate of 0.05% annual interest rate on our savings account. 

Let’s put that in context

$1000 x 0.05%/365 = $0.0014 interest per day = $5.11 per year (I think the air I breathe costs more than that)

Then, I did some shopping.

$1000 x 2.4%/365 = $0.0657 interest per day = $23.98 (the air is smelling sweeter)

$1000 x 3.3%/365 = $0.0904 interest per day = $32.99 (roses…I smell roses)

In Canada, 3.3% was the highest I was able to find, but with the caveat that this was an introductory offer and has since been reduced.

Our Choice

My husband and I decided to go with the 2.4% rate as it was connected to some services we already used, and so setup was easy.  We also had dealings with this institution, so we felt more comfortable with our money there. 

Now, this does not seem like a lot of money for a year’s worth of storing, but currently we have well over $11,000 in our fund (wait you say, your weekly roundup says you have around 5500…I haven’t gotten to blogging about the rest and will add as I talk about it).  That is $363 per year in interest…not too shabby.

Why Does It Matter

Remember the book “Don’t Sweat the Small Stuff…It’s All Small Stuff.”  My book would be called “Sweat the Cents Because That’s How to Create Big Moola.”  (It’s a working title.)

Whatever your big goal is, the little things matter.  These small items build on themselves, and all that positive energy can only continue to create more positive energy around your money.

Why Is It Called Fire-Fighting Money

I fell into a theme at the beginning of the blog post and could not figure out how to get out of it, so I went with it.  You’re welcome.

PS:  Do your own homework.  I am learning as I go.  I had to just look up how to calculate annual interest…not an expert.

Financial Update

Current Saved: $1150 Goal: $6000

High-Interest Savings Balance: $5746.46 (Property Tax and Car Insurance)

Note:  In the next few months, I’m going to make the specifics of our finances available only to those on my email list.  You will still get the info, but without Financial Update. Sign up if you’re nosy like me.  =)

Resources

Canadian Articles on High-Interest Savings Account in Canada

I’m Restless…Spring Is Coming

The Setting

Random varieties of dogs jump, tremble or saunter accompanied by their proud owners in a controlled, yet chaotic, fashion around me as I wander up and down the aisles of vendors flogging their wares.  Settling down in a stadium-style seating facing six different types of parrots and their owners, I prepare to be educated about the intricacies of owning a pet more intelligent than you and with the ability to remove fingers with their huge beaks.   Nearby a dog model (they exist!) poses with fans showcasing its red vinyl full body suit and bribed into cooperating with the photo shoot with low-calorie treats like a proper diva. 

So, where am I on this cold Sunday afternoon when I could be at home reading a book?

A pet expo

Why?

One word…Spring.

Let Me Explain

While I’d really like to believe that everything  I do is an anomaly, innovative and charming, 40+ years of living has demonstrated differently.  I have begun to recognize that there is a distinct pattern of behavior compatible with the seasons.  It is a little disheartening to note my unoriginality, but as I get older, I smile at my eccentricities and just go with it.  Using the phrase “seasonal whimsy” to describe my predictability gives it an air of magical adorability. 

The feeling starts with a quickening in my veins and a desire to clean up all the dust particles that are now illuminated by sunshine that were invisible the previous month.  When I walk the dogs, I can smell a freshness and sweetness in the air like Mother Nature has just dabbed a bit of perfume behind her ears and is finally making an effort.  The local newspaper which previously went from mailbox to recycling gets flipped through quickly to see if anything interesting is going on. 

In short, I’m done with hibernating, and I want to get out.  Spring is almost here. 

But It’s Still February

Sure, it’s only February, and the potential for snow is still strong.  Waking up in the morning, the roofs still show signs of Jack Frost, and the car windows still need the requisite 10-minute defrost (unless your spoiled like my husband and can start the car from inside the house…I’m so jealous), but I can feel it in my restless soul.  it’s coming, and the evidence is everywhere. 

The Evidence

Have an Adventure

While I don’t advise necessarily going to a pet expo (unless that’s your thing), if you have an inner restless like me and feel the stirrings of spring a-coming, love your seasonal self and go have an adventure…even if it’s just sitting at the park with a coffee.

To have an adventure, you need footwear, an open mind and to exit the front door. – Me

PS: The best adventures are free.  The pet expo cost me $35 for tickets, parking and 2 stuffies (pet swag).  There are a lot of expectations that come with $35, and they do not include a dog model in vinyl.