Still all positives

Good morning,

Messenger, you are very wise not to touch your savings either short term or long term (except for a true emergency of course).
My husband and I saved like wild people while we were working, in fact we saved either his salary or my salary every year (whichever was less). We lived and still live based on our budget. There is a history of Alzheimer's in his family, so our goal was to have enough set aside so that if he came down with Alzheimer's I could stay home and care for him. We were able to retire at age 56. I was a high school teacher, and retired with my teacher pension, which also afforded us a high deductible medical insurance plan. We have been retired for 5 years and have felt the increase in cost of living every single year. I have managed to stay on my original budget all these five years! Learning how to save and be creative.
But our income has actually been cut by 60% because our interest income (given the low interest rates for the last 5 years) now yield that much less, and add to that the very fast and furious cost of living increases that we are experiencing. We don't want to touch our savings yet, because we fear that we might not have enough to fund our budget in future years. We will have to rely on our savings then. So we make due with what we have coming in at this time. We hope to get a boost once my husband is of Social Security Age (5 more years).
In the meantime, my attitude is of gratitude, the ideas come from various sources, including this forum, on how to save money for daily expenditures. So far our budget is adequate. So I can share my experience, strength and hope with you and congratulate you on your actions. Thank you for sharing those with us all.
Toty

Besides the 401K I have two savings accounts. One in a bank that is two blocks from my apartment. The other one is with an on-line bank.

I really need to start adding the majority of my savings into the on-line account. Right now, I just throw it the "left-overs."

I earn a lot better interest with the on-line account, it really is bad financial planning on my part to not feed it more.

Using simple numbers, let's say my physical bank has $100 in it and my on-line bank has $33. Which using ratios, is roughly what I got going on with these banks.

Anyway, the $100 pays interest quarterly... so let's just say in that quarter I get $1 interest. The on-line bank pays $1 interest for a month, not a quarter....

So, I earn three times the interest with the on-line account with only a third of the amount of money in it.

Anyway, that is the next step... I have a "comfort zone" figure for the savings I want in the physical bank and don't want to go below that amount. I'm just a shade over that amount right now... so I want to get it higher because I will be dipping into it to get airplane tickets and later in the year money for my holiday...

Messenger,
Have you checked your local credit unions? I realize that all states are different, but here in Texas, we can find much better rates of interest for our savings than anything I have seen online or at any of the national banks.
In the past our local credit unions were open for membership only to people that belonged to a certain class category (city workers, teachers, railroad employees, utility company employees, federal employees etc.) but now they are open to the public.
We can still get a 5 year CD that will pay 2.5% and they accrue the interest monthly. You can elect to have the interest transferred monthly to your checking account, or you can add it to the principal amount of your CD, earning compounded interest.
Again, I don't know how Nebraska deals with credit unions, but its worth checking into.
Also, since you are so disciplined with your money and spending habits, have you considered a credit card that pays back cash money for using it? We use one that pays up to 5% cash back every month, so we charge all our everyday expenses on it, and we get roughly $25.00 back every other month. Of course we pay the balance in full every month avoiding any finance charges. It all helps.
Again, I have to congratulate you for your financial discipline and goals. Take care,
Toty

Thanks Toty, I will have to look into a credit union near me. I really don't know much about them.

Right now I'm kind of cautious about getting a CD. The feds continue to purchase less and less bonds and T-Notes and everyone is starting to predict that interest rates will be going up. I really don't want to lock in any money for long term if the chances of rates going up.

As far as CC's go. I know a few people who pay everything with their CC and that at the end of the month write one check to the CC company. They get all the rewards and cash bonus. Logically, it is a great idea.

For myself though, I still have some fears (paranoias?) from my past. I've only been totally debt free for a little over two years. And things from that time of my life can still haunt me.

The ringing of the phone gives me an anxious moment. Even though I'm out of debt, that phone still brings back bad memories and it takes all my concentration to realize I can answer it with no fear because I have no debt.

Official looking mail has the same effect. Again, knowing I have no debt doesn't help. I look at the envelope and all I think about is someone wanting to garnish my wages.

I have three major CC's. I try to use at least one a month to help continue improving my Credit Score. The thing about though is as soon as I use a CC... I start getting ill. Stomach cramps, insomnia and a general feeling of panic. I know I can pay it in full and have not used more then 30% of the available credit at any time, yet I physically get sick by using it.

I went to using no more then 10% of the available credit and I still end up constantly worrying about it.

I still have a very real fear that what happened in the past will happen again. Until that fear is gone, I'm not sure if I will ever be able to take total advantage of CCs.

Dave

My money is getting tight and I am struggling to find a way to live without. I have applied for Work Connect, but the Benefit I have to claim to be entitled to it requires a sicknote every two months from my Doctor. I feel that trying to find work in this country is too arduous a task. Those who make the effort to find work are being made to pay for the extreme 'Benefit Fraud' cases the media love to mention.

Too many people have an, "I'm all right, Jack!" attitude in this side of the Pond. Appreciate the money you have while it's yours. You're on the right track, Dude.

Sadly, all governments are hurting for money and the easiest way to get it back is by cutting expenses. No government wants to balance their budgets by increasing income (taxes) so cutting expenses is the only way.

Right now in America, Social Security Disability will be bankrupt in 2016. Less then two years from now. One way to get money is tap into the main Social Security funds, which the working class will revolt against. The second way is to raise taxes again on the workers... which also won't happen.

So what's the choice? They will look at the folks claiming these benefits and see if they can do anything to get off of it.

It's not just the UK, it is everywhere. Governments are trying everything to cut expenses. I do know that some of the cuts that have been done in the UK would cause a revolution in America. it's just not right what is going on...

Good morning all,

Messenger, I just have a couple of comments. First, again for what its worth, I think you have done a wonderful job of turning your life around, and another testimony to that is that you are aware of your limitations and you have the honesty to admit them even on this forum. Wow!

Second, what you say about governments is so very true, I will add that our government (as well as some others) have one more choice to increase revenue. They print money. Every time they print money our currency is devalued, and cost of living goes up, its a hidden tax. Also because our government has soooooo much debt, I don't predict the feds increasing interest rates any time soon. We are following Japan's example, they have had zero interest rate for over 20 years. You see if the government raises interest rates, they would have to pay that much more to service the national debt. They won't do that. It's easier, and it requires less explanations to the public to just print money. Yes, future generations will suffer even more for this, but, for today, they get their votes. Another reason, not to forego any interest you can earn now on your savings.
Just my opinion. Take it for what its worth. Again, you are a great example of how a person can do whatever they want to do if you allow yourself to be rigorously honest.
Toty

awww wow Toty... never thought of the Japan comparison, which makes a lot of sense...

I do have a short work week but I will be looking at a Credit Union in my town and then go from there...

Well I did check out our local credit union. There is only one in my town. It's not that good. I actually make more with my on-line account. Even the CD's weren't as good.

So... I'll keep on looking but for now, I'll stay with what I've been doing.

I was afraid of that. I was hoping that Nebraska was like Texas. My mother-in-law lives in Kansas, and their credit union rates are not good either. It was worth looking into.

It certainly was worth looking into... I need to do that more often. We often search for little ways to cut costs, yet at least for me, I don't always search for the little ways to make money... in this case interest...