With today's economy and a growing family, personal finance has become VERY important to me. I do get some of the finance bug from my dad...he always drilled personal responsibility with money (among other things) into my head. Now I can thank him as I know what a budget is, how to stay on budget, and how to invest in my future. That being said, there are many gaps of knowledge when it comes to stocks, investing, and the whole personal finance picture. So I may be blogging more about strategies and tips for building a nest egg or stretching a paycheck to the maximum. That has become a little game to me lately. My husband and I both make decent money and more importantly, we live below our means. However, we are paying for childcare, preschool, assisting my mother-in-law with financials a bit, etc. I know everyone has their own situations so I will spare you the details. I was raised with the mentality that there is no free lunch and nothing is guaranteed...like a job. Christian and I never take our jobs for granted because Lord knows that is how we pay our bills. So we try very hard to make our paychecks stretch and save as much as we possibly can in our retirement accounts, our roth accounts, and our emergency savings. We sale what we are no longer using in the house and use that money to buy new stuff. We love to travel so we save up for it before we go. eBay and Craigslist are two of my favorite sites right now. :) People laugh at my eBay addiction but really it is my purging addiction that drives it. ha!
I have been reading up on CD Laddering and I think this will be the first system we try to put in place. Of course, that takes money to start so we will wait for our tax money to invest with this. But CD Laddering is a low-risk way to save money and earn good interest. But basically, you divide money into several different CDs with different maturities.
| Amount | Term | Rate |
| $1000 | 6 months | 2.75% |
| $1000 | 9 months | 2.80% |
| $1000 | 12 months | 3.10% |
In six months (or whenever the first CD matures) when the first CD matures, you have earned that interest. At that point, you can take the cash you need out and reinvest the rest in another CD at 12 month maturity. This will keep the ladder going as the second CD matures at 9 months, etc.
I plan on doing this with tax money but will probably do a 6 month maturity and a 12 month maturity. Then reinvest all of the CD for another 12 months out. That way I can have CD maturing every 6 months and earning good interest in a low-risk method. The key is to find CD with good interest rate. I will check my credit union first but will check bankrate.com or yahoo finance for other options.
Labels: CD Ladder
posted by Julie at 7:12 PM
