Losing Money While You Save

My friend Alex has a great blog about finance that for some reason I just discovered today. Honestly, if you’re into that type of thing check it out.

Reading it today got me started thinking about my own savings account. (of course, being unemployed is also a good reason to start thinking about your savings account)

I myself happen to have 2 savings accounts, and a checking account. I usually keep enough in checking to pay 2 months bills, and the rest in savings. My other savings account handles all of the money my websites make. I decided to keep them separate so that I can measure actual earnings after I deduct for hosting, advertising, etc.

The question I asked today but couldn’t find a clear answer on is “what’s the interest on my savings account?” I noticed it’s not even listed anywhere on my bank’s web page. When I did track it down, I was shocked to see that it’s only at about 2%.

Why was I shocked? Well, that’s because the standard rate of inflation is just over 3%. That means I’m losing money simply by leaving it in the savings account. That’s not good.

Luckily, my website earnings are making 4.5% in their ING direct account. That means I’m actually earning money on that.

If you want more information about high interest savings accounts check out Alex’s blog post.

1 comment April 13th, 2007