Monday, February 3, 2014

It's all about the money, money, money!

I spent bits and pieces of the past week gathering tax papers in "anticipation" of our accountant coming to get all our crap this weekend. On Saturday, the 1st, I could not understand why one of our banks had yet to send us an interest statement for our interest checking and money market accounts, when I had thought everything had to be in our possession by the 31st. Then an awful thought occurred to me, which I was certain could not be the case: What if we had not earned enough interest last year to actually get an interest statement from the bank? Nah, I was fairly certain you needed to earn at least $10 to get a statement, and surely we had earned that.

Spoiler alert: We did not!

This may not seem a like a big deal, but since we started saving money many years ago, we had typically earned a decent amount of interest. I know the interest rates have been quite low for the past few years, but I still thought we were making some money. So I logged into my account, and saw that for 2013, we had earned $7. What?! What the what, what?!

Just to make myself feel worse, I randomly looked at my tax return from 2007. We earned almost $500 in interest among our checking, savings, and a CD. And you know the sad thing, we actually have more money in checking and savings now (we no longer have the CD), even if it is just by a few thousand, because I had bought a car that year.

As I said to the hubby, I feel like an idiot paying interest on his (used) truck. We probably pay more in interest in a month or two on that truck (I would have to do the math, and I might cry if I do, even though our interest rate was pretty low) than what we earned in savings all of last year. Already I had been paying a payment and a half each month, sometimes more, but I am now planning to increase that amount.

But the reality is that we will need a lot of that money in savings. We really, really need to replace our roof. The hubby just this weekend informed me that our driveway is falling apart, so that needs to be black-topped. And if we expect to put our house on the market in the next few years, we have to replace our 25-year-old awful, stained carpet. And who knows how much longer our dishwasher, washer and dryer, and water heater will last. We cannot pay for those things without that money.

As bad as I feel for myself, because, as I have said many times, we live a mostly frugal life, I can't help but think of the people who pay hundreds of dollars in interest in credit card debt every month. It literally makes me twitch thinking about that. I would be pissed if I were paying $25 a month in credit card debt.

If nothing else, I actually feel better about getting a tax refund, which I am assuming we will get. People like Suze Orman and Dave Ramsey can say all they want that by getting a refund, the government is earning interest off your/my money. Well, I say good for them! Someone should be earning interest. As for me, if, fingers crossed, we get a decent return, a good part of it, maybe all of it, is going on the truck.

In the meantime, anyone have any recommendations for money market/savings accounts? Surely some bank somewhere has a better interest rate than the .01 I am earning...

3 comments:

Chris H. said...

I so understand where you're coming from. I, too, feel it necessary to keep cash reserves for emergencies and planned expenses, but it's hard to accept that the money is not earning you any returns. (And how is it that we're still PAYING so much in mortgage interest, even though we have a low rate after refinancing twice in the last 8 years.) Interest payments only seem to flow one way these days.

Facie said...

I just wish I knew how much I needed to have in reserves. Is eight months of expenses enough? I remember when it used to be four to six. But maybe it is a year?

I actually just got my online statement for the truck and was sickened to see that we actually pay about $50 in interest a month. I wanted to cry. As soon as I saw that, I paid a small but decent chunk of it. My goal is to pay off the truck this year. Even though we will still end up paying a lot in interest, paying it off in one year will be better than four.

But I still keep telling myself that there are people who are paying interest on things they use that day (like dinner out). I am not completely failing, I suppose!

Unapologetically Mundane said...

I'm very sorry for people like you who aren't earning any money off of their savings, but on the bright side, my college loan is getting paid off so fast because of these amazingly low interest rates. So, sorry, but thank you!