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Moving Money Around

April 21st, 2024 at 03:16 pm

I guess this is largely a MM(20) money update.  

I thought we would go over MM's cash during winter break, but he ended up not having much of a break.  I am surprised he still has any cash available, but he's been in extreme low spend mode and just stretching that $1K annual gift (using for spending money during college years).  We touched base during his spring break.  I think he had maybe ~$1,200 easily accessible cash.  He was very *shrugs* about it, just needs it to last 3 months.

MM(20) did decide that he was probably going to cash out some or all of his I Bonds.  But we decided to just wait and see what the next interest rate would be.  & we left it that he will need to open a new bank account this summer (to park extra cash).  

I just happened to notice two things last week:

1 - I Bond rate set for 2.97% inflation rate next round.

2 - One of our CUs is paying 5.5% interest.

The CU account is a mega interest account that was paying 4% when the average high yield interest rate was 1%.  It's fallen behind in recent months, but that 5.5% is perfect for MM(20) to park his I Bond funds.  The catch on this 'mega interest' account was that the cap was $5K for the mega interest.  

I can't even tell you why I checked, but maybe it's just because it's been so long since either of us has kept a full $5K in these accounts...  I figured I'd double check (if my memory was correct) and...  The 5.50% is on the first $10K! 

Note: We've already moved our own money over to take advantage of $10K @ 5.5%.

I let MM(20) know.  He is cashing out his I Bond and moving most of that to his CU account.  When all is said and done, he will have $10K earning 5.5%, $500 earning 7% (another CU), and $1,500 left in his checking account.  Maybe only $1,000 left after a few more months of college spending.  He will want to figure out a higher-balance high yield savings account at some point, but won't be necessary until he gets a job and starts piling up more money. 

In other news, MM(20) has had his rental figured out for next year, for a while, but was still negotiating the cost of the bedroom he will be renting.  I guess he got that sorted out and he told me it will be $808/month.  He will be saving $42/month, for a much bigger room and nicer neighborhood. 

Somewhat related, we need to cash out the rest of our I Bonds.  I have been dragging my feet because I got used to the easy separate buckets of money.  But I think I've only really been allocating this money to the kids 50/50 (in my mind) while it was doled out 50/50 into separate I Bonds.  The truth is that this is a '2 in college at the same time' fund.  I just needed a little time to wrap my brain around it.  I am thinking about loosely earmarking $20K for future DL(18) rent expenses.  & then earmarking the rest to MM(20).  I would earmark all of the mega I Bond interest to MM(20).  & also all future interest to MM(20), who is currently paying rent.  This is very simplistic and easy to keep track of.  I really only care about keeping the $20K for DL(18) if he is moving out this summer/fall (and if we are paying two years of rent for two college kids at the same time).  So if we end up falling a little short, this $20K is money we can probably tap if MM(20) needs it.  (At current, DL has no plans to move out.)

I wasn't sure if we would pay for MM(20)'s 5th year of college rent.  We left it as a bridge to cross later.  I wanted to give him ample notice if we expected him to chip in.  But at the same time, wanted to give it some more time to see how things sorted out.  He did his part.  He's done a good job keeping rent costs down.  I suppose when I tell him we are going to pay for the rent, will have to clarify that we can cover rent 'at this rent level'.  (We also found out his 5th year of tuition will be free, because adding the 5th year is giving him a 4th year grant.  I could just pull the 5th year of rent from his gifted college fund, if I wanted or needed to.  Now that we expect he might have anything left in there).

MM(20)'s current lease ends in July and I think the new lease starts August 1?  But he will be able to store his stuff there in the meantime.  MM(20) expects to stay at this house his last 2 years of college.  With everyone I know who rents being constantly kicked out by selling landlords...  I would never presume he could actually stay there 2 years.  But it would be nice if it works out.  Just my past experience re: sky high real estate.  It doesn't help that home sales just went from 0 to 100 overnight.  But I would have laughed at the idea of counting on this rental for 2 years, regardless.  We can only hope that it is that easy. 

1 Responses to “Moving Money Around”

  1. rob62521 Says:

    Good job on finding that high interest rate of 5.5%. I moved money to Discover Bank to get 4.5% a bit ago.

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