As we get closer to GERD (Grumby Early Retirement Day), we decided to switch both bank accounts and credit cards. We also got a great 1-year deal on digital storage. The countdown is on, and it is important to make sure that each month tells a tale of efficiency and progress. To see how our September decisions might help you, keep reading!
Bank Account Switch
For the past 10 years or so, we’ve been using a local bank that refers to itself as “The World’s Greatest Bank“. They did often have free coffee and cookies in the lobby and displays of local artwork, but the interest rate on our savings account was .01%. If we needed cash, we could only use their ATM machines, and the fee at any other machine was $3.00. That’s a 15% hit on a $20 withdrawal! These deficiencies are increasingly important with GERD on the horizon. We are building a higher savings account balance as part of our exit strategy. And when we’re riding our bikes through small towns, we’ll need to stop at ATMs from time to time.
We found an online bank that offers both a great savings account interest rate and ATM fee reimbursement. There is no minimum savings account balance and the interest rate is more than 1%! If we need cash when we’re riding through Nebraska City, we can use any ATM machine up to 6 times/month and receive reimbursement for the fees.
When we’re ready to officially close our old accounts, we’ll stop by the neighborhood branch. Gotta get one last peanut butter cookie!
Credit Cards are also an important consideration in our early retirement plan. In January we signed up for a card that offered 100,000 rewards points in exchange for a $225 membership fee and a commitment to spend $4,000 in 3 months. We front-loaded most of our 2017 charitable contributions to quickly meet the spending requirement and have accumulated another 21,000 points over the past 9 months.
Our renewal date is coming up and we decided we definitely do not want to continue with a card that has an annual fee. Our planned spend for the first year will not bring in enough reward points to justify any fees. Rather than try to figure out ways to creatively use all of our current points in the next 3 months, we are going to take the cash value – $1,200. Deducting the $225 fee, this represents a 6% reduction on our total 9-month spend. Not too shabby.
Our replacement card has no annual fee, offers 1.5% cash back on all purchases, and $150 cash if we spend $500 in 3 months (no problem). It also has the level of rental car insurance coverage we need for the rare occasions that we need to a car. Being a zero-car household, we do not have our own car insurance so this is an essential feature for us.
When we retire we’re not only going to have zero cars; we’re also going to have zero real estate. As full-time bicycle tourists, the only way we’ll be able to access our digital files from the road is to have a nice storage area on “the cloud”. As the resident luddite of the Grumby household, this just sounds like a bunch of hocus-pocus to me. I mean, a cloud is just a bunch of vaporized h2o, right? How could it possibly hold any zeros and ones?
Thankfully The Great Mr. Grumby is a technical wizard of sorts and found a great deal at iDrive. As former customers of CrashPlan we will have 2 terabytes (that’s a lot of bytes!) of data for $7 for the first year. After that, it will go up to $69/year. This means that we have enough space to become digital hoarders if we want to. When we’re on the road we’ll be able to upload thousands of photos through the iDrive app!
How Can Our September Decisions Help You?
Whether your savings account balance is large or small, find out how much interest you are earning. If it’s lower than 1%, maybe it’s time to change banks.
If you never carry a credit card balance, always pay on time, and don’t buy shit you don’t need, you are a Master of the Credit Card Game! Find a card that pays you to spend your money wisely. Check out the Mad Fientist search tool. Or, if you’re interested in travel hacking, take a peek at Travel Miles 101.
Being a full-time traveler is not a prerequisite for getting your digital files in order. If you do not yet have offsite backup for your important files (photos, etc.), they may all vanish when your computer crashes or gets stolen. Or when your home and belongings are damaged by a natural disaster.
Other Great Deals?
What benefits have you received from your credit card company?
If you use a card with mileage or reward point benefits, is the cash value equal to or greater than 1.5%?