2018 Savings Goals

Every year I set a new savings/ financial goal, but since I wasn't blogging in 2018, I didn't write that one down even though I'm particularly proud of it.  So, better late than never.

2018, I bought a new-to-me car for the first time in years.  I started commuting about 90 miles a day to work, and after buying gas for my 2005 Malibu three times in one week, I snapped and went to get a more fuel efficient car.  Because this decision was somewhat impulsive, I did not do my homework beforehand and ended up financing through the dealership.  Despite my exemplary credit rating, they got me a loan at 5% interest, which seriously filled me with rage.  I tapped into savings and threw a few thousand dollars at it, but interest was accruing on my eight thousand dollar balance much faster than I liked, so I came up with a different plan.

This was around November, which is apparently when credit card companies start aggressively sending out 0% balance transfer letters.  I got one from my Capital One card that offered me 0% interest for 18 months, with a one-time 2% fee.  I decided to take an $8500 cash advance ($190 fee)  and pay off that stupid loan right away.  Then, since the interest rate on that card was 0%, I made the minimum payment on the card, and redirected the rest of my payment into a Money Market savings account that earned me 2% interest.  I'll pay off the card in full in July, before the 18 month period runs out, and for the year 2018, I made $150 in interest.

A few things I had to consider before doing this:

1. I had to do a bit of math to determine if I would have the money to pay that card off in full before the 18 month period runs out.  If I don't pay it off, anything on that card will be assessed something like 25% interest, which I do not want to pay.
2. I had to take that card out of my payment rotation completely.  I disconnected it from any automatic payments, and physically took the card out of my wallet and stashed it in my office at home.
3. My credit score took a bit of a pummelling.  My credit limit on that card is $10,000, and I put $8500 on it and paid it down by only about $100 per month.  That looks really bad on a credit report, but since my score was already excellent, it didn't matter too much.  I got a bit of a bump when I paid off the car loan, but not enough to compensate for carrying such a high balance for so long.

Despite those few drawbacks and minor inconveniences, I am 100% glad I did this.  I saved myself hundreds of dollars in interest on that stupid bank loan, and the balance transfer fee is a non-issue since I'll more than make that back in accrued interest on my Money Market savings account.  I had almost enough money in my emergency fund to pay the bank loan in full without involving my credit card, but that would have obliterated my savings, which makes me deeply uncomfortable.  This way, I was able to keep some liquid cash on hand for emergencies (which I did end up needing).