I have been meaning to do more finance posts for some time now. Having lived in the US for almost 5yrs now, I’ve been surprised to learn about how many Americans live paycheque to paycheque, regardless of income. I’ve since realised I have a very different mindset when it comes to finances than the average American, because even when I didn’t have anything in particular to save up for, I still saved 20-30% of my income after tithing and gifting 10-15%.
As such, in the past 5yrs I have been able to:
Purchase a 3yr-old Honda Civic and paid it off in full within a year.
Accumulate enough savings to live without working for a year.
With my hubby, pay for our wedding in full.
Still have some savings left to make opening a CD worthwhile.
A friend asked me how I managed to save so much, and I really had to think about it because saving has just been somewhat second nature to me. I’ve now put it into words, and have decided to write it here in case you’re interested and it can somehow help you with your savings goals.
This may be particular relevant now as many Americans are struggling due to COVID, and we are very, very thankful that Jacky still has a job. We aren’t able to save up much now that we’re on his single income, but knowing we still have savings in the bank just gives us a lot more peace of mind.
So here they are, some key financial/saving rules I’ve followed subconsciously my whole life. Jacky and I are now slowly saving up for a house, following the same guidelines:
This post was published on 5/30/2020 and last edited on 6/16/2020.
Click here to skip this post and just read what we ended up opening.
In my previous post I wrote about researching the best CD in the market at present because we were interested in opening up a new one.
However, what we found out during the process of deliberation between Ally and Marcus, was that Marcus also have a High-Yield Savings Account (HYSA) that offers 1.30% APY. Also if you don’t live in California, there are other banks that give much higher APY %’s for their HYSAs. What the heck! So I guess if you live in another state you should look into what’s best for you there.
Anyways, let’s go back to the 1.30% APY that we actually have access to. This is higher than most of the no-penalty CDs!
But there’s also a reason for this: this high APY rate will fluctuate as the Federal Reserve’s interest rates rise or decrease, so you aren’t guaranteed that rate will remain. The Marcus representative I spoke to advised that unfortunately they do not send out emails to notify their customers if the APY rate decreases.
Edit: Turns out this is untrue and they do actually notify customers if their rates change! I literally just received this email:
As such, we had to decide if we should still open up a CD to lock in the APY rate, or if we should just put the investment into a HYSA instead. Also, if we were still going to open up a CD, should we open a 7mo or 11mo one? By this time, I already had my heart set on Marcus by Goldman Sachs, so all of these are related to what they offer. Here’s our thought process: