Anyway, it wasn’t a broad stroke sort of thing — obviously saving isn’t for suckers — but, right now, with rates hovering just over one percent, well, it’d probably be a wiser strategy to put the money to use elsewhere.

As things currently stand, I’m saving like crazy so much so that I’m genuinely excited to post my net worth update.

Unfortunately, that also means that I’m a sucker.

I know it’s stupid — I should be paying down my mortgage at 6-something percent instead. Though I’m nearly 10 years into my mortgage, big payments now still make a much larger dent than payments of the same size 5 years down the road.

It’d be in my best interest to hit the mortgage hard right now while my savings are earning so little.

But on the other hand, there’s a lot of comfort that comes with a big number in the savings account. And I’m really trying to save up to get that much needed renovation (started and) paid for. Right now, I’m guessing I’m about 25% of the way there.

Now I know what you’re thinking, here he goes again… I’m not flip-flopping again — just re-evaluating my options.

Again.

I just want it all…

Maybe I’ll go 50/50 in the new year? You know, throw half towards savings and half towards the mortgage…

I can’t believe I even said that — my own personal history in debt reduction clearly indicates that financial moves like that get you nowhere fast…

Recapping financially, I’ve pretty much been on autopilot since the start of the summer…not really focusing on one thing over another, just kinda going with the flow.

It’s all good — debts are falling, assets are growing — but I’m sure I could make better use of the money that I fortunately have at my disposal.

So after a long conversation with my wife over the weekend, I think I’m going to try something new regarding the way I pay my mortgage.

Truth by told, the conversation only lasted around 15 seconds, but I’ve been thinking about it ever since.

See, I find myself with an entire year’s worth of minimum mortgage payments saved up. I call that piece of mind.

I know how I got there — but I still can’t believe I actually did it.

Now I’ve often complained of late that the monthly mortgage bill is a budget buster. I mean, a four-figure bill can’t help but get in the way…

So, what I’m thinking of doing is automating my monthly mortgage payment to be paid from my savings account — the one that has 12 months worth in it already.

My checking account will then be absent of the peaks and valleys that come each time a paycheck comes in and a subsequent mortgage payment clears.

All the while, though I’ll have that comfortable buffer of 12 months, I’ll continue to top-up the savings account on a weekly basis so as not to deplete things too drastically.

Make sense?

Basically, I’m taking my monthly mortgage payment from the forefront to the background and, over time, I’m hoping that it starts to feel like I’m not making mortgage payments at all.

That’s the plan anyway…

I just noticed this this morning… ING Direct lowered their interest rate to 1.391%.

The last time that they changed (and lowered) their rate was back on March 21.

At the time, if you remember, it was pretty much expected and it was their third or fourth rate reduction of the year. Every few weeks, they’d lower it a bit.

Things just seemed gloomy all around.

But it’s been quiet since then, the stock market has roared back up, there are media reports of people saving instead of spending, and, honestly, I was actually expecting them to raise the rate sometime over the summer.

You know, to maybe attract all of these reported *new* savers out there???

Now this?

Well, it’s disappointing…

A poor man’s interest calculator of sorts…

I plugged in my current ING balance and was thrilled to see that I should be earning over $50 per month in interest…

…using today’s balance and January 2007′s interest rate…

Of course, well documented here on PIAC, ING’s interest rate has dropped over 300% since then.

When I started way back in January 2007, with dollar signs in my eyes I might add, I was targeting a balance of around $8k so that I’d be earning around one dollar per day in interest.

That just seemed exciting for some reason.

So here I am currently around the $13k mark, well in excess of that $8k target, and I’m only bringing in around 50-cents each day.

Boooooooooooo!

Ouch!

So much for the budget!?

Last month, I *so* wanted to increase my savings by $1000, decrease my mortgage balance by $1000, and somehow manage to pad my checking account with another $1000 too…

Doing the math (while keeping regular monthly expenses in mind), technically, that doesn’t even seem to be possible. But, man, I came darn close in May.

So far, the new baby isn’t costing us anything more than we expected or could handle.

Of course, with child care looming in the future, I’m well aware that that’s going to change in a hurry so I’m going to do my best to put the biggest dent in the mortgage that I can while I can still afford to.

So, this past week (I’m already one payment in!), I increased my weekly additional mortgage principle payment from $75 all the way up to $230.

Wow, Brainy! How can you afford $230 per week extra?

That’s a great question, and really, if you asked me if I could afford to send between $920 and $1150 extra towards my mortgage each month, I’d immediately say “No freakin’ way…“

That’s why weekly payments are the only way to go.

You can afford to deprive yourself of more than you think you can.

Doesn’t Suze Orman say something like that?

I’m pretty sure it’s her.

She’s right.

Though I’ll just be scraping by, I somehow can afford to send $230 each week to CountryWide, or Bank of America, or whatever they’re called this month…

While making this budgetary change, which all but ensures that my mortgage balance will fall by over $1000 each month, I decided to make sure my savings account balance would grow by at least $1000 per month too.

It just seemed like a good time to go all out.

Five minutes on the computer and another modification of weekly auto-transfers — an increase from $165/per week all the way up to $250 per week.

There are always at least 4-weeks per month, so I’m guaranteed to increase my balance by $1000 plus interest.

That wasn’t so painful…

So, putting it all together, I essentially increased my weekly outflow by $240.

Considering that I was totally accustomed to my previous outflow, this almost feels like I’m eliminating $1k worth of debt and amassing $1k in savings for just $240 per week.

That’s a pretty good return.

I know it’s not as simple as that — it’s actually costing me double — but it certainly feels like I’m getting a great deal.

The only spot that I’ll tank each month will be in my checking account. I can live with that.

Now I know what some are saying, “Must be nice to have a 14-figure salary… I could do that too if I made as much as you…”

I’ll be the first to admit that $240 per week is not a small number. And it’s certainly not an amount that everyone can afford — and that’s okay.

I started with a $25/week auto payment to Countrywide back in June of 2007.

Twenty five bucks.

At minimum wage, that’s just a half day’s worth of work. You smokers out there probably spend more than that on cigarettes each week. Think about it.

Point is, $25 is do-able.

And it makes a difference. A HUGE difference — see for yourself.

Whether it’s for debt repayment, savings, or even investments. Automatic weekly (not monthly) payments and transfers are the way to go.

- – - – - – -
PIAC Factoid: Setting the record straight, I don’t make a 14-figure salary.

I may be a multi-thousandaire but I got there on a 5-figure salary…

That’s another drop of 0.2 percent in just the past two weeks.

That, well, sucks.

And I’m not just talking about the drop… I’m talking about the rate in general.

I claimed that I was “taking a break” from saving.

Yeah, it was less than a week ago.

In short, I stopped my weekly transfer into savings because my checking account was feeling drained.

That, and I also wanted to:

1. Pay my latest auto insurance premium in full.
2. Erase the remaining credit card balance from the baby furniture purchase back in January.
3. Be financially irresponsible and feed my addiction one last time before the smurfling is born.
4. Pad my checking account balance to $5000.

So here I am, less than a week later and I’ve already accomplished the first three items.

Insurance is paid, credit card balance is zero, and there are 5 new jerseys in my collection.

The crazy part is that my checking account balance doesn’t look too bad even after all of that! (This is due in part to my State Tax Refund coming in this week.)

So maybe I won’t be off the saving wagon for as long as I’d originally thought?

I think that all I really needed to do was break from the monotonous routine for a few days…

For the past few months, I’ve been transferring roughly $400 in to savings each week!

That’s freakin’ crazy.

Sure, I’ve seen my savings balance grow at an impressive clip but, at the same time, I’ve been cutting it real close in my checking account.

Too close for comfort, actually.

And, now… I want to get comfy.

So, with the money that I’m no longer throwing towards savings:

1. I’m going to pay my latest auto insurance premium in full.
2. I’m going to erase the remaining credit card balance (around $750) on the baby furniture.
3. I’m going to be financially irresponsible and feed my addiction one last time before the smurfling is born.
4. I’m going to pad my checking account balance to $5000.

That last one will likely take a few months.

And then, of course, when $5000 is the new $0, I’ll resume “feeding the pig” at my crazy high rate.

So I’m not *really* backing out, just, well, re-grouping, I guess?

And with the terrible rate that I’m earning in savings currently, well, this seemed like the perfect time to make this move.

The new interest rate is 1.835%

For the savers out there, this really blows.

I want a bail-out. ;0)

In short, I’ve added another automatic savings transfer to my very successful “weekly” schedule.

Every Wednesday, I’ll be transferring $15 from my checking account to my ING savings account currently earning a dismal 2.178 percent.

Fifteen bucks doesn’t sound like much. It’s not.

It works out to $780 per year or $65 per month. Those numbers are a little more respectable, I guess, but they’re still not real impressive totals.

They’re not meant to be.

I don’t even miss those $15. Not for a second.

I mean, if I weren’t so diligent about keeping track of my checking balance, I’m not sure I’d even notice it missing — that’s how small an amount it is.

But…that small amount increases, slightly, what I’ve already been dropping into savings each week — and that’s the point.

Now that I’ve now settled into my current income and expenses, I’ve found that an additional fifteen bucks each week can definitely be spared without any impact on my day-to-day routine.

Basically, I’m slowly working my way up to my maximum savings threshold, you know, the point where I can no longer afford to “save” any more.

I’m not there yet, but I’m getting closer.