I have a much more complicated financial life than I need to but I want to optimize the small advantages to make something big. This has required being vigilant about balances, transfers, and due dates. I recently had a negative experience with my primary credit union that prompted me to fire them and reexamine how I have things ordered.
This was home to my primary transactional account and changing things was going to be a pain so I wanted to it once and correctly. In my previous post I had shared how I had put the the cell phone and electric bills on auto-pay to credit cards. This eliminated two monthly payments leaving my checking account which both simplified things some and cut my expenses by about $2 per month through credit card rewards. $24 per year saved simply by changing the payment method! I had read elsewhere of the strategy of depositing all money into a savings account and transferring to checking only to cover expenses and decided to implement this. I had a little used Capital One checking account back from the ING Direct days and found that they also were among the higher savings account rates available without jumping through hoops.
I set my paycheck to deposit to the newly created savings account so it would earn interest from the day of deposit and created a timeline of my known due dates to see how much needed to be transferred to checking and when. I then went into all my biller's websites and configured auto-pay from the checking account. This arrangement will net me 0.10% on the checking balance and 1.00% on the savings account, I am forecasting this will increase my earnings by about $35 per year over the prior arrangement through increased interest and delaying payment to due dates. It will also reduce the time required to keep my financial house in order without sacrificing the use of multiple credit cards to maximize the rewards.
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