Thursday, July 23, 2009

Every Penny Helps

I had to get gas for my carpool and gas for my truck today. I put them both on my Discover card to see if they will really give me 5% back as promised. There's probably something in the fine print about a minimum purchase before cash back rewards or something. I'll check it out on the next statement. I still need $3 more in cash back rewards before I can redeem $20 for a $25 Ace Hardware gift card. After that I think I'll take Discover out of my wallet again and go back to using my Chase card. I don't like carrying multiple credit cards with me.

I also opened a 9 month CD with Discover Bank at 1.75%. It's a sad little rate but better than nothing. When my other CD matures in September I'll open another CD, or maybe 2 CD's for different lengths, 9 month and 6 month. The cool thing is that since I plan to use that money to pay off my mortgage next year, I have to think about when I want the money to be available. A one year CD starting in September would be too long because I want to put chunks of it towards the mortgage a few months ahead of the payoff month which is next October (hopefully). That is just too exciting to think about. Only a few more months until the one year mark. Yea!

8 comments:

Over the Cubicle Wall said...

Very exciting to plan for. CD's are a safe spot for money you know you will be spending in a year or two. A better rate would be nice, but just having it there when you plan on needing it is good.

Daizy said...

And keeping it out of reach is good too. Gotta keep myself away from craig's list!

Lizzie said...

Come on Daizy, whats a CD? Here it is how you listen to music when you dont have a MP3 player. I do get it an investment just not quite how it works.

Anonymous said...

good job on the cd.. I wonder though: if you pay the mortgage down now with that money, would you actually be saving more that the return on the cd? or is $2000 in a cd making that return more money than the same $200 not incurring mortgage interest. math is hard...

bugbear said...

Smartypig has rates over 1.75% right now, I believe.

They don't offer cd's just deposit accounts, but the rate is still pretty good

Daizy said...

Sorry Lizzie, I forgot about that language barrier. Certificates of Deposit (CD) are investments that are insured by a bank and are very safe but the interest rate is low. They are locked up for a set time like 6 months or a year. They are used for short term investing. Unfortunately, they don't play music. :(

Daizy said...

Anonymous, you are correct, I would get a better return from paying down my mortgage now and it is very tempting but this money is actually my emergency fund. I'm going to use it to pay off the mortgage when it gets closer to the end but I think I should keep it around just in case I get laid off before I can finish my payoff plan.

Daizy said...

Thanks for the tip bugbear. I'll have to research rates again when my other money comes out in September.