Back in July when Her had a wedding shower, she setup an ING Direct subaccount named “Big Dreams Fund” so that we could stash our wedding gift money there.
And that’s about how far we got. For the most part, our wedding gift money hasn’t moved from our checking account. While we’re pretty good with our current budgeting scheme, we’re worried that the longer we wait to move our money, the more we may be tempted to spend it on hookers and blow (or unicorns and leprechauns).
We know ourselves pretty well, and we’re definitely out-of-sight-out-of-mind kind of people. But because of the nature of this money, we thought instead of just sticking our money into an online savings account we’d go an extra step further to protect it from ourselves. To do that, we’re going to setup a certificate of deposit (CD) ladder.
We’re going to do this for a few reasons. First, CDs can be found that have higher interest rates than most online savings accounts. Second, as long as the CDs are insured they are a relatively stable short to intermediate term investment – a very good thing in today’s market. Finally (an most importantly to us), there is a penalty for withdrawing the money before the CD matures. This last point is crucial for us to keep our grubby little hands off of it so that it can grow.
Hopefully our strategy now will let us truly realize our big dreams.
We’re not going to explain CD ladders because it has been done much better in other places. For more information, check out the following:
- CD Ladder Explained – Moolanomy
- Using CD Ladders To Save Wisely – Generation X Finance
- How To Build A CD Ladder and Get The Highest Interest Rate – Money Blue Book
- Creating a CD Ladder for Your Emergency Fund or Other Savings to Earn a Better, Safe Return – The Simple Dollar
- How to Easily Open a CD Ladder at ING Direct – Mrs. Micah
- A CD Ladder Plan For Beginning Savers – Free From Broke