3 Ways to Save Big in a Low-Interest World

I’ve been mulling around this new tag line for my blog… “Striving to live a Proverbs 31 life in a Romans 1 world.” What do you think? Part of my quest to live a Proverbs 31 life is to get my house in order. And part of getting my house in order is to deal with our budget and bank accounts.

In Proverbs 31, it reads, “She makes sure her dealings are profitable” and “she carefully watches over everything in her household.” This certainly includes the money aspect of the household. While we wives may think that earning money and keeping the finances is our husband’s job, wives are clearly supposed to take responsibility too.

I’ll be sharing some budgeting information in a future post, but today, I want to share with you what I’ve learned about saving, besides the fact that it’s hard. :)

It’s common knowledge that interest rates are low across the board. I knew that. But I didn’t realize how low! I was shocked when I called my bank to find out what the interest rate was on their savings accounts. Here’s the answer – .01%. What? Really, whats the point? So, I get a penny every year for every hundred dollars I save. That’s ludicrous!

So, I decided to shop around and educate myself a little on saving. Here are the 3 ways that I have found to save big in this crazy low-interest economy:

1. Change your mentality – Its easy to fall into the trap of spending everything that comes in. Many of us were not taught how to save as children. We got our allowance and we went out and spent it on candy and baseball cards. We need to change our mental belief that saving isn’t a punishment, but a benefit. It will grow our wealth and provide monetary security for later, when we need it most. Saving is a blessing not a burden. Say this to yourself 3 times each day if you struggle with the concept of saving money.

2. Save regularly – Open a separate savings account. Yes, even if it gets a terrible interest rate! The reason why it needs to be separate from your checking (even if your checking is earning interest) is because you need a place where you money doesn’t come and go, but just stays and grows. For this reason, you need a savings account that doesn’t charge fees. To save regularly, you should strive to put 10% of your income into your savings account each time you or your spouse gets paid. That means living off 90% of your income rather than 100%. In our case, it means living off 80% of our income because we tithe 10% to our church as well. If you cannot live on 90% of your income, then start smaller and work your way up. Start by saving 1% of your income and then once you can do that well, increase to 2%, etc.

3. Save 50% of increases – When you get a raise or a bonus or an unexpected gift, just put 50% of it into your savings account. You weren’t expecting it anyway, so you still have more than you did before. You get 50% of it to spend as you like. This is a win-win for your budget and your savings growth.

Shopping for a savings account with a higher percentage yield? Here are the best that I have found from Moolanomy.com:

1. The CIT Savings Account offers 1.00% APY interest rate when you maintain a daily balance of $25,000 or more (0.90% otherwise). No account-opening or monthly maintenance fees. Your interest is compounded daily to maximize your earning potential.

2. Ally Bank High Yield Savings Account offers competitive rate of 0.95% APY and easy access with no minimum balance and no monthly fees. The bank was rated “Best Savings Account” by Money Magazine in May 2010.

3. Discover Bank Online Savings is a product from the same reputable organization that offers the Discover Card credit card. In addition to competitive online savings rate of 0.80%, Discover Bank also offers money market account (0.70% APY), CDs, and IRA CDs.

4. ING Orange Savings Account offer a high 0.75% APY and it is very popular among savers. You can access your account around the clock via ingdirect.com, and open your account online in under 5 minutes. The best feature is the ability to open sub-accounts to help you save for specific goals.

Read more: http://www.moolanomy.com/1333/best-high-interest-savings-account-and-money-market-rates/

I’ll be trying out Ally Bank, since it offers 95 times what my bank is currently offering. :) I’ll let you know how I like it in a few months.

What are your best savings tips? And what is your current interest rate?

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This entry was posted on Saturday, January 12th, 2013 at 2:08 pm and is filed under Finances, Lifestyle. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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