I also am buying short term T-bills. 4,8 and 13 week . The returns are modest 2 to 3% but it is still far better than bank rate and the turn around is quick so you have liquidity unlike cd's or other term instruments
Where do you keep your small money?
- Thread starter Henro
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armylifer
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One thing that is forgotten about in this thread about I bonds is that the interest on them is counted as income when they are cashed. If you are cashing in I bonds be sure to be aware of the amount of interest that you have to add for annual income for a particular year. Interest income can put you into a tax bracket that can negate certain income related benefits at state or even federal level.
I will give an example that affected me. I lost a property tax reduction exemption because of excess income last year. Interest income from I bonds purchased over 20 years ago can really add up to much more than the purchase price of the bonds from back then. If you are thinking about cashing in I bonds just be aware of how much the interest income will affect you at tax time.
I will give an example that affected me. I lost a property tax reduction exemption because of excess income last year. Interest income from I bonds purchased over 20 years ago can really add up to much more than the purchase price of the bonds from back then. If you are thinking about cashing in I bonds just be aware of how much the interest income will affect you at tax time.
RCW
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Getting back to the title, "small money" is defined differently for different folks. Very subjective.
When we had premature twin infants 30 years ago, small money was $5.
I tried to keep a C-note tucked in my wallet just in case. That bill was BIG money for us back then.
My wife spent $97 on 12/26 Day after Christmas sales one year. I couldn't pay the rent due 1/1. That $100 bill saved the day....
30 years later, small money is $1,000. I keep that in cash normally, in my wallet.
For me, it still spends "hard," it never burns a whole in my pocket......
Works for farm auctions, emergencies (bought a generator on a Saturday morning years ago), unforeseen fun expenses, such as a wife's junket with her friends, and other stuff that pops up.
That "tuck fund" as I call isn't used often, maybe once/twice a year.
House is paid for. Cars paid for and no credit card debt. Have some stocks and some dollars in the bank.
If you walked a mile in my shoes, you know it helps you sleep at night knowing you've got some dry powder....even if it’s $1,000 in your wallet….
When we had premature twin infants 30 years ago, small money was $5.
I tried to keep a C-note tucked in my wallet just in case. That bill was BIG money for us back then.
My wife spent $97 on 12/26 Day after Christmas sales one year. I couldn't pay the rent due 1/1. That $100 bill saved the day....
30 years later, small money is $1,000. I keep that in cash normally, in my wallet.
For me, it still spends "hard," it never burns a whole in my pocket......
Works for farm auctions, emergencies (bought a generator on a Saturday morning years ago), unforeseen fun expenses, such as a wife's junket with her friends, and other stuff that pops up.
That "tuck fund" as I call isn't used often, maybe once/twice a year.
House is paid for. Cars paid for and no credit card debt. Have some stocks and some dollars in the bank.
If you walked a mile in my shoes, you know it helps you sleep at night knowing you've got some dry powder....even if it’s $1,000 in your wallet….
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Biker1mike
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Dry powder in my house was the powdered milk that mom mixed with water and added to the whole milk to try to stretch it out. Still tasted like crap.
That and USDA silver cans of peanut butter will never be in MY house, ever.
Different shoes but I know the path.
Never have more than 50 bucks in my wallet.
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We keep our emergency funds and project savings in high yield savings accounts.
Not nearly the return you are getting (as of this writing it is at 1.4% APY and has been steadily climbing), but better than lettings it sit in a standard bank account and we have easy access to it. Everything else is invested in our 401ks and separate brokerage accounts.
Not nearly the return you are getting (as of this writing it is at 1.4% APY and has been steadily climbing), but better than lettings it sit in a standard bank account and we have easy access to it. Everything else is invested in our 401ks and separate brokerage accounts.
Anyone notice Treasury Direct website crashing due to the rush to get in on the current 9.62% rate on I bonds By the end of October?
Mike
Mike
fried1765
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Yup.......very little cash!
No fee credit cards that give 2% back.....paid in full monthly!
Yes...doesn't pay to wait to the last minute sometimes I guess. I got what I needed earlier in the year (May), and a neighbor did earlier this month when I advised him he might want to...he and his wife both maxed out on purchases.
Today out of curiosity I checked and you can't even log in...down for scheduled maintenance they say...
Thanks to you Henro!
Wife and I both Maxed in May, we got one daughter to open an account also. I passed info about I Bonds to other friends and family too.
Sounding like Nov rate may be about 6.48%, which is still pretty good, best CD we have bought was 3.25% - 12 Months.
Mike
It was 9.6% and now it is 6.89. The government is dropping the rate as interest rates are going up. I guess that too many people took advantage of the old 9.6% rate.
The I bond rate is set by the rate of inflation over the previous six months. If we are not happy with it we put our money elsewhere. Not directly related to whatever commercial interest rates are.
You are right lots of people took advantage of the end of the 9.6% rate. It was common knowledge it was ending. I think I read on one day at the end of the month they sold more I bonds than in all of 2021.
I agree starting when younger. I tell everyone that works on my team to at least put in to our 401k to get company match. We match first 3%. I wish i started early hind sight.
Biker1mike
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Our company 401k investment firm had some great online tools to see just how much you really need to put away to reach your goals. Took a lot of pleading to get the younger ones to look into them. Almost everyone that ran the programs were amazed at how far short they were going to be by just doing the minimum. More than a few old folks got caught by surprise on just how little they actually had saved.
I'm well into retirement and haven't touched a dime of my tax deferred money and it is good that I still have the full nest egg. While I have to take the RMD, I kept the money invested in a taxable account. With the hyper inflation this past two years the programs you mentioned probably need major adjustment. With the scum destroying my rental property, inflation and local taxes going crazy, my comfortable retirement is being rapidly destroyed by forces beyond my control.