How AMEX And ING Gave Us A Wedding Gift

My wife and I have been married for almost two years now.

When we were planning our wedding (which we planned in three months) we didn’t want to get too extravagant and end up in debt because of the wedding (not a good way to start a life together). Still we knew there would be some hefty expenses to cover.  Luckily for us I got an offer for an American Express credit card with 0% interest on charges for a year.

I know, some of you may be thinking “Uh-oh credit card debt!”

Well yeah but look at how we made a new credit card work for us:

  • We charged what we could on the card. This included not only wedding expenses but also the honeymoon and many other charges over the course of a year (we would have charged more but some vendors preferred cash or check).
  • When the monthly bill came we paid only the minimum. I know, another red flag – Never pay just the minimum. Stay with me it gets better.
  • We took as much of the remaining monthly balance as we could and put it in our ING account and labeled it AMEX. This money would only be used to pay the Amex bill once the 0% offer was over!
  • Fortunately we already had money saved for the wedding so we were able to add money to our ING “AMEX” account. Essentially we could have covered the credit card bill at any time but let it sit since we weren’t being charged interest.
  • At the end of the offer we paid our bill in full. We continue to use the card paying off the statement in full every month.

Basically what American Express did was give us a free loan for our wedding! On top of that we were earning decent interest in our online high-yield savings account for money that could have paid off the card. AND for the charges we made on the card we were earning rewards points as well. The points translated into a nice gift certificate to the Pottery Barn! Thank you American Express and ING!

Understand, we had to be disciplined to do this. At no time did we go crazy making charges we couldn’t already pay off. We had a plan and stuck to it.

This shows you that credit cards don’t have to be bad if they are used correctly. Money can be saved and earned in all sorts of ways. We just have to be open to how it can be done.

Let me know what you have done creatively with a credit card or online bank account!

Start Saving and Let That Money Build Itself

So we all want to save more money right?   What can we do to increase our savings?

Many of us were told by our elders that if you want to save money the best place to put it is in a savings account at the bank (remember that old question of whether it’s better to put it under your mattress or in a savings account?).

This was good advice back in the day but the problem with it now is the average bank savings account barely gives you any interest on your money.  Truth is, for most people you are probably losing money since your interest rate is lower than the rate of inflation.

Yup, all that conventional wisdom about putting your money in a savings account is losing you money.

So what do you do?

A savings account is still a good idea but you need to find one that actually gives you a decent interest rate.  A good place for that is an online bank savings account like Capital One 360 Savings.

I’ve been using them for about four years or so and it has been great (there are other online banks out there but 360 Savings has been pretty good to me so far).  They have no minimum and no account fees.  Many other banks offer higher rates but you have to start with a good amount of money (doesn’t it seem likes it’s easy to make money when you have money?).

Go over there and start saving.

Here are some tips to start saving up money that will build itself:

1. If you don’t have to put a lot in, start with something small like $20.  Now you aren’t going to get rich with this but you will see your money growing.

2. Set up an automatic deposit for $5 a week.  We can all scrape together $5, can’t we (you can even start smaller if you need to)?  After a few weeks you’ll see your account growing.

3. As you feel more comfortable try to up the dollar amount, maybe $7 or $10?

4. Once you’ve saved for a bit ask yourself if you can afford to put away some money that you will absolutely not touch for six months.  It doesn’t have to be a lot just something you won’t be needing.

Really, don’t touch the money!  You don’t want to use this money.

Now take this amount and open up a 6-month CD, or Certificate of Deposit (Capital One also has no minimums for their CD’s).  This will give you a slighter better interest rate than your savings account.  Remember though, you shouldn’t need this money for at least six months (12 months CD’s are even better but that’s up to you).

When your CD matures (the six months are up) see if you can open up a new CD maybe with more money.

If you have specific goals to save for you can set up different accounts within your account and fund them differently.  For example, if you need to save up for the holidays set up a holiday account and put a few of your dollars in their every week/month, etc…

You should be seeing your account growing now both due to the money you’ve put in as well as the interest you’ve earned.  It’s actually kinda fun to look at my account and see how much interest I’ve earned this month.

I didn’t mention it but you will need to have a checking account already.  This will be where you transfer your money from into your 360 Savings account (and vice versa).

This in itself isn’t going to get you rich but it can help you to start saving more effectively.  The hardest part is putting those first dollars in there and keeping up the discipline.

The journey of a thousand miles starts with the first step.  The same idea holds true with savings and wealth – it all starts with that first dollar!

Let me know what you think and if this works for you!