Stupid
moneyrelations :: Jul.25.2007
Yesterday, I accidentally locked myself out of my online bank account because I couldn’t remember what my favorite dessert was. I phoned online support to get my account unlocked. While attending to my problem, the representative told me that my chequing account balance was quite high, and I’d be better off with putting my money in a savings account. Heck, I know that. I have a savings account with another financial institution but it was a hassle to transfer the funds because I kept on forgetting the username and password. So, other than living expenses and pre-authorized purchases of e-funds, I’d been letting my money accumulate from paycheque to paycheque while trying to figure out how to invest my money (la raison d’être of this blog). What jolted me into reality was that she mentioned I can make $800 a year in interest. When you voice it as a monetary amount, it all crystalizes. The interest rate is no longer just a percentage. It’s EIGHT HUNDRED DOLLARS.
Obviously, I know the balance of my chequing account but I didn’t realize (or it didn’t sink in) its earning potential in a humble savings account.
The moral of the story is that if you don’t know what you are doing or you haven’t decided what you are going to do, for cripes sakes, put it in a money market fund or a savings account. Don’t dawdle. There is no excuse for it.
I’m filing this one under stupid. OOooWww!
Stupid ::
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You sound like my GF — she who has THOUSANDS hanging around in a chequing account because she never gets around to moving it somewhere else.
Like, seriously. It’s free money.
I was actually hesitant about this post. It’s downright embarrassing. Here I am calculating MER savings but I don’t even see the forest for the trees and put it in a savings account? Mea maxima culpa.
I think we are insensitive to savings accounts’ returns. 3.5%? Yeah, whatever. Let me invest in the ultra hot market for a huge gain. However, if you take the time to do the number crunching, it puts things in a new perspective. You’re right, free money for no risk isn’t bad at all.
Oh well, this is exactly what this blog is for– to record my boneheaded moves for the betterment of mankind.
Why don’t you set up an automatic transfer from your checking to savings?
just a suggestion.
Hi GoldnSilver! Yes, that’s exactly what I’m going to do now. I had set up automatic purchases into some index mutual funds but I guess I’m a better saver than I thought so it gathered up nicely. It was also a hassle to transfer money back and forth between institutions when I needed it. I seem to either make irrational decisions without thinking or I think too much and don’t act. I’m going to make auto transfers to a money market fund with my bank so the money will be ready when I need it for those cheap buys