Question for Shell :)

[bee9984]

I was wondering when your savings or is it emergency fund? reaches a certain amount of $ How much money do you leave available which you do not lock in and start rebuilding? Also, where do you lock it in? GIC?

Thanks for being such an inspiration!


I will be opening an emergency fund, possibly into an Ing account in jan. Sometimes I feel like I am doing things backwards. I am wondering if I do this where I should put the money once it reaches a certain amount....maybe into our retirement savings account? We put money in there already out of every paycheck. Dh has a pension along with a full time job and I am starting work part time in jan( I was supposed to start before this time but as it goes they were too busy to train me lol). Even though our income now has been steadily going up we have not changed the way we were living from before so all extras are paid out to retirement etc.We even pay our dd's at the beginning of the month now so that they will have their own money to start budgeting and no more coming to dad or mom for clothing money etc. (I got this idea from reading an aritcle by Mary Hunt .

Anyhow we have come a long ways over the past months

Thanks again,
Heather

[Shell]

Hi. I'm just on my way to work, but will be very happy to answer your questions tonight or tomorrow morning.

[bee9984]

Thanks Shell

[Shell]

When I save about $5,000, I either buy a GIC or go and see my financial adviser for ideas. I know should I have a big emergency I can cash my GIC any time. I would just lose the interest from that month.

I have read that you should have 3-6 months saved in your savings account. One article I have even read suggested 6-9 months as times are unstable.

One thing that really helped me to save was . . . PAY YOURSELF FIRST! Before you do anything else, get your savings to the bank before you piddle it away!

Hope this helps!

[bee9984]

Thanks! That sounds like the route I will take too but I think that I will leave $1000 in the account and put the rest in a GIC or something...lol....I should have an idea where to move it when that time comes

You have been a Great help

[Shell]

I'm glad that I could help. I love to see other people saving money too. It is such a great feeling to have some money saved for a rainy day.

[RuthNY]

What is a GIC?

[Shell]

When you buy a Guaranteed Investment Certificate (GIC), you invest a sum of money for a specific term, or period of time. When you cash in your GIC at the end of that term, you are guaranteed to receive your full principal investment, plus interest.

I don't know if they have it is the US. I buy it in Canada from a bank.

[Valerie in WA]

Is a GIC similar to a CD (certificate of deposit)?

[bee9984]

I found this article but I havn't fully read it yet but will here shortly and about a few paragraphs down he says this;

For example, upon recently visiting my bank I was asked if I would consider investing in a Guaranteed Investment Certificate (GIC in Canada), which is the same as a CD (Certified Deposit) in the US. The bank representative told me their rates are better than the big 5 banks (in Canada we only have a handful of banks). I asked the bank representative for the rate sheet. Here they are: 1 year 3.25%, 2 years 3.50%, 3 years 3.75%, 4 years 4.00% and the 5 year best rate is 4.15%.

I lost the website addy........I will post it in a second....lol.

Edited to say I found it


http://www.wiseoptions.com/Advantage...Investing.html

[bee9984]

I don't think I really care for that article

[happymommy]

Great quetion bee9984!

Shell, thanks for answering, I was wondering the same thing. lol
If you don't mind me asking, have you always payed yourself first?
Or is it something your learned, and if so what made you realize you should come first?

We are fortunate to have you and many other talented people. As a group are very inspired by your goals and encouraging others to do the same. Your helping so many people.

Your very generous and thoughtful to everyone! Happymommy

[Shell]

Ah shucks. Thanks Happymommy. No, I haven't always been good at saving money. Quite the opposite in fact. I used to get my paycheque and run to the mall. Before you know it, there's nothing left.

So, five years ago on New Years I decided to put $200 in the bank once a month. Meanwhile, I worked hard on paying off my credit cards. Books such as the Tightwad Gazette helped me as well. Well, as soon as all my credit cards were paid off I used that extra money and increased my savings even more!!!!

It's surprising how we can fool ourselves with money. You put $100 on this credit card and $150 on that one. The minimum on another and all of a sudden you have no money left. and wondered what the heck happened to all your money!

To break the evil credit card habit I put them AWAY! If I couldn't control my credit cards the I told myself I wasn't aloud to use them.

Once the credit cards were paid off. Woweee! I had a lot more money. It's amazing.

I have read a few books on saving money and a lot of them said to pay yourself first. This really works for me. Then I have to adjust my spending after saving my money---before I piddle it all away.

I also know that I might get tempted to spend that money and that is why I lock it up. You don't know how many times dh wanted to buy a big screen tv etc with that money. But once it's locked up, it's locked up! Ha!

I am glad that I can help other people through my own trials with money.

Another thing I did do was have money taken out automatically out of my account for an RRSP (IRA) I am so glad I did that. You save for your future and get a nice tax refund at the end of the year which you can use to pay off debt or better still SAVE IT!!!!

[happymommy]

Thanks Shell

[bee9984]

LOL!!! I have had this on my mind I guess quite a bit lately as this morning just before waking up I was dreaming that I was standing in the bank getting ready to transfer $5000 into a GIC out of my emergency fund and reminding myself to keep $1000 in my account......what an awesome feeling that was! but then...............I woke up LOL.

I can see this happening


P.S Dh is all on board for this except........he wants to have a debit card linked to this emergency fund. I told him that we could just scoot to the bank and withdraw it if a REAL emergency happened and if we can't get to the bank right at that second of needing it (say if Lightening struck our house on a weekend, 2 years ago that happened to the two houses right beside us and what a mess the houses were) then he could use his master card, which I don't like but then we could get to the bank and pay it off asap. We do have house insurance but I think it takes a few days to get the funds for any damage and paying the deductable etc.

I can't wait till jan