Me and saving money
For the longest time I had absolutely no ability to save any money. I’m not talking about, “hey here’s a coupon for $1 off”, but more like, “damn, I’m running kind of short this month, I guess I’ll make the minimum payment on all of these credit cards and pull from what little I have in savings for groceries.”
Yeah, I was really bad at saving money. My ex-wife always used to say that she had trouble with it because there was always another paycheck coming in next week. We’ll just say that my finances were a mess for a long time,and my paychecks barely covered my monthly expenses. If there was an emergency or anything unexpected I had to spend on credit and that just dug the pit deeper.
Then I changed things in 2019.
My car had a bad problem. It blew out the head gasket. It’s a $2000 repair. I didn’t have the cash for it, and my credit cards were approaching the limits. The repair had to be done, since I caught the issue when it wasn’t yet terminal it was going to be cheaper than if I waited until the car no longer ran. So I took out a personal loan to cover the repair.
Here’s the thing though, if I had stopped there I would have just been digging my hole deeper, but I was tired of that hole. So I did something that up front might not have seemed logical at first glance. I borrowed enough money to pay off all of my credit cards in full as well as pay for the car repair. The interest rate on the personal loan is only 3.5%, so I’m not paying nearly as much in interest to pay that off vs. all of the individual credit cards.
After paying everything off, if I spend any money on a card, I pay it off in full at the end of the month. I haven’t paid a dime in interest to any of the credit card companies since. Also as a nice side result, doing it this way shot my credit rating up above 800 on all three reporting agencies.
Since doing all of this, I started to be able to put a little bit of money aside in savings every month. As time has gone on that amount going to savings has managed to creep up a little every month. Some months, especially when uncle Sam puts extra money in my account, it’s been some nice money finding its way into savings. I really wish banks paid interest on savings like they did when I was a kid. So it’s not making much money sitting there, but it feels really good looking at the bank balance and seeing so much in reserve.
For the last month or so, I’ve been entertaining the thought of paying off my car loan roughly two years early and putting that car payment into savings every month. It might just happen...