So I’ve spent a good part of this weekend going through our finances, planning for the future – both near and frighteningly far (retirement?!)…
The good news is, our retirement savings are actually in pretty good shape! They could be better – as is always the case – but I’m feeling ok with the balances as I’m about to turn 35 here in another month and they’re on a good track to be ahead of schedule another five years from now.
Our emergency fund isn’t bad, either, namely because it actually exists considering that apparently 1 in 4 don’t have anything for savings at all.
Debt-wise we could also be doing better, but by estimate we’ve managed to pay down about 20% of our debts in the last year and we’re now looking at a plan to pay off the rest in the next 2.5 years if we can stick to it. I think we can.
One thing I unexpectedly found myself circling back to today as I was reviewing everything and making some tweaks to our plan, though, was this giant tirade that I made last year about having lousy options for personal banking, and like a lot of other things that I’ve found myself more so just shrugging off that used to give me oodles of frustration in years past, I’m honestly not sure how much I really care about it anymore.
Maybe that’s what getting older and gaining wisdom is really all about – figuring out what to not give a shit about so that you can worry about the things that really matter! 😉
A year ago I talked about considering a plan where I would eventually move some of my accounts over to a credit union that offered better interest rates and whatnot … because “what’s the point of having everything in one place if the bank treats you like crap?!”
And don’t get me wrong – Wells Fargo still pisses me off from time to time because I just got a notice that they’re going to start charging fees for my business account because it doesn’t carry a high enough balance…
But still, having six accounts under their roof for the last year and another seven all at separate other banking institutions, there’s something quantifiable about being able to manage a good share of my banking from one login, and frankly the difference between 0.01% and 0.10% APY in interest earnings doesn’t even come close to comparing to how much time I can save.
Sure, the example still stands – $5,000 in savings makes me $1.50 a year at Wells Fargo and $17.50 a year at the credit union – but that $16 difference equals $1.33/month vs. a little bit of my sanity preserved for not having to juggle so many accounts in different places, and not for nothing but at 34 years old, I think my sanity is worth at least a buck and a half each month!!! 😛
So my long-term banking plan – which mind you won’t be fully in effect for another couple of years – looks something more like this…
- Personal & Business Banking – Primary Bank
- Personal Checking
- Savings – Emergency Fund
- Savings – Reserve Fund
- Home Mortgage
- Credit Card #1
- Credit Card #2 (one of these may disappear or go HELOC … not sure yet)
- Business Checking (if I can find a way to make the fees go away)
- Personal Banking – Secondary Bank
- Credit Card #3 (rewards card – we currently route regular purchases through here)
- Personal Investments – Primary Institution
- My 401k
- College Fund for Christopher
- Brokerage Account
- Personal Investments – Secondary Institution
- Sara’s 401k
I’d love to find a better rewards program under Wells Fargo to eventually ditch CC #3 just because there’s an annual fee and admittedly it’s not that great of a card. Plus, the addition of a Reserve Fund Savings will eliminate a lot of the benefits of this card anyways, as it’s our Disney Rewards Visa from Chase which we currently use to help fund our Disney World Annual Passes.
The idea of the Reserve Fund is something I came up with last night because I’d like to start pre-saving for larger, regular purchases so that they don’t have an impact on our normal budget anymore. It would pretty much work just like the escrow with our mortgage works – we’d identify a monthly payment for our Disney passes, average vet fees, car repair expenses, or whatever, and then as those came due we’d have a big pot to pull them from rather than diverting money from our regular budget and throwing it off for that particular month.
I’m also trying to organize things in Mint a bit better so that maybe we can start using that again to better judge how much we’re spending on groceries, gas, and whatnot to try and stabilize that part of the budget to maximize the larger things we’re trying to do.
Overall, I think we’ve got a good set of goals for the next five years…
- Finish paying off debts in 2 1/2 years (not counting mortgage)
- Save enough to buy a new house in 5 years
- Continue funding retirement and emergency savings
- Increase funding for Christopher’s college fund
- Stabilize budget to maximize focus on previous four items
And unlike the last year which previously focused mostly on paying down debts (and figuring out how to be a new parent!), the next twelve months hold lots of potential for making big headway with all of these, so it’ll be interesting to follow-up again next summer to see where things stand and if I’m still more or less content with settling for a big bank vs. a credit union! 🙂