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Saturday, September 1, 2007

Savings Income – Finally earning real dollars

After years piling all my savings into my 401k and debt containment, my emergency fund is finally large enough (and better invested) to earn “noticeable” income. Frankly, it was embarrassing reporting investment income of $50 per year on my taxes.

Thankfully, my emergency fund is large enough to earn $50 per month in interest. While not a huge sum, it is real money. In terms of debt, I have a reasonable car loan, student loans, and a mortgage. No credit card debt.

12 month plan:
a. Save for wedding
b. Pay off smallest student loan (the floating rate one)
c. Continue to contribute 10% of salary to my 401k (plus company match). In a pinch, this money could serve as a backup emergency fund.
d. Begin to develop a post-wedding spending plan and budget priorities.

Savings Allocation:
1. $500 + $25 per month in savings bonds
2. 1 month savings - ING Direct Savings Account
3. $1,000 in six month ING Direct CD.
4. Remaining savings - Vanguard Money Market Mutual Fund.

1 comment:

Patrick said...

You're on a good track! I remember the first time I noticed that my savings was making real money every month. It's such a great feeling!