This is a call to action to those of us that do not have a lot of discretionary income, but enough to maybe take advantage of some opportunities if we focus our attention towards it. We need to take advantage of the opportunities to make our money work for us and ensure we lock in value added for our saving. Recently, I noticed how I was letting money I had no plans to do anything immediately with languish in a savings account earning next to zero. The reason for the account was for a goal I was saving up for on Mint for Home Owner Association (HOA) fees I will pay at the end of this year, but that money could be earning 1% plus at a number of online banks you can find on Magnify Money. So, I moved immediately to take advantage. So, at the end of the year when it's time to pay my HOA fee of $325, maybe I have earned $2 or $3. I know, I know, it's not a lot of money but we are working on seeing and seizing opportunity to earn a bit of interest. A small change, but savvy!
Next idea is to set up automatic savings to be transferred weekly or bi-weekly from your checking accounts to one of the above high yield savings account you pick out for yourself. You can start with small manageable amounts like $25 and increase over time with the goal being not to spend all your disposable income on consumer items. At the end of the month, you would have put aside $50 or $100 using the example above of $25 earning about $.50 to $1 each month. Later, you can take these small chunks and make a bigger investment in something over time. A small change, but savvy!
For sophisticated savers, why not do this with take home pay from a job. You can start out by taking measure of your take home pay before using the technique I prescribe. Next, bump your W2 allowances up to 15 or 20, just a really high number, and on the next paycheck see the difference between take home before and after. That difference should go into high yield savings account like mentioned above. You are now going to earn interest on each of those dollars you worked hard to earn. Let me be clear in saying this is not money to be spent because you will still need to pay your taxes with this money set aside come April 15th, but you will have a little interest earned. So, expect for your tax preparer to say you need to pay ‘x’ amount of dollars at tax time, but you would have gotten all during the year the tax refund Uncle Sam might have returned to you. So if you are not disciplined, do not do this, period! Otherwise, if you are sophisticated, by all means be savvy.
Now this whole blog, I have been talking about how to earn a little extra interest on your money and now I going to speak about something to do totally contrary to earning interest as a savvy saver. I was not previously a gold bug, but understanding the current economics, the Federal Reserve (FED) is punishing people who have saved dollars by the printing of more money out of thin air and keeping interest rates at 0%. So the purchasing power of your dollars go down. That is one reason that those interest rates I mentioned above are at 1% or below. It almost is like what is the point to save at all, but we must not lose faith. So, if you can start converting those little sums earned in fiat currency or just disposable income you want to retain its value, save in precious metals. This measure is to ensure that you as a savvy saver does not have your savings undercut by FED monetary policies. Gold does not earn interest or pay dividend, but it is oldest currency recognized for its value or store of value across the globe when fiat currencies falter. So transition some of your fiat currency earned by the above measure into precious metals to the level of 5-10% of your liquid cash. I currently use Anthem Vault because I like their slick interface for seeing the amount of your precious metals on a dashboard. This is the new savvy saver!
Thanks for this wonderful content, it was really helpful</
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