Well, I did the thing!
I opened my first real savings account. I’m such an adult. 😀
I didn’t realize they had so many rules for opening and having a savings account! For my bank, the rules are:
- Minimum opening deposit of $200.00
- 4 free withdrawls from the savings account or transfers from savings to checking per month. Any additional withdrawls/transfers cost $1.00 each.
- If the account runs below $200.00, the account is charged a $4.00/month fee. If it stays above $200.00, there is no fee.
- The account earns 0.05% interest, compounded 4x per year (February, May, August, and November) based on the daily account balance. I honestly have no idea how to calculate quarterly compounded interest with a variable daily rate. Too much math for me.
I went to the bank on my lunch break. I work at a very relaxed company. We have the option of taking longer lunch breaks and leaving later in the evening if we want. We work on an honor system so they just assume we make it all work out by the end of the pay period. I called the bank during the morning to find out how long opening a savings account would take. 20 minutes or so. Cool. My drive there is about 15 minutes. I figured I could drive to the bank, open the account, hit a drive-thru for some lunch, and get back to work in about an hour. I’d just work and eat at the same time to make up for the lost time.
Wrong! The drive there and back was fine. The time in the drive-thru was fine. The time at the bank? Not so much fine. I was there for at least 45 minutes. The lady, I assume because I look a lot younger than I am, decided it was necessary to read the entire 8 page legal document about the savings account line-for-line. I’m totally down for taking care of the younger set, explaining the rules, and whatnot. But I’ve been using a bank for 18 years. I’m familiar with how overdraft, account fees, and beneficiaries work. I really didn’t need to know all the legal disclaimers, have an in-depth explanation of the benefits of opening a gold-star account with a $20,000 deposit (yeah, never gonna happen lady), and get a play-by-play of how to use the phone app to transfer money. I can figure all of that out if you’d just give me that sheaf of papers. I swear I’ll read them when I get home tonight. But no, she ignored my repeated requests to finish the process faster. *sigh*
Anyways, I ended up being away from work for almost 1.5 hours. When I got back and told my boss about my ordeal, he just laughed and told me to make sure I locked up and set the alarm when I left since I’d be working quite a bit later than usual that night. lol We have a scheduled meeting next week so he can explain the whole compounded interest thing too. He is so awesome. 😀
Now that the account is open, I explained to my boss (because we do weird shit like talk about Harry Potter and makeup during working hours when we should be discussing international trade rates, import tariffs, and finding a new location since we have grown out of our current location) what I’m doing about personal savings. He is very happy that I’ve started putting some money from each paycheck into savings. He was very curious about the makeup-related part though and asked a ton of questions. He loves the idea of having a hobby, especially an expensive hobby like makeup, but tempering the expense with a matching savings amount. According to him, I am a genius. 😀
After our conversation, I have to question my original concept of this makeup savings account experiment. I didn’t really think this through all the way. My plan was to match in savings what I’ve spent through the year on makeup. To what end, other than having savings, I don’t really know yet.
- Should the amount of money I save this year dictate my budget for next year’s makeup purchases? This is an interesting question and I can’t really make a determination on that. What if I spend $2,000 on makeup this year?! What if I only spend $200?! I think I need to look at how much I’ve saved over the course of the year and decide what this experiment means for 2018 once we are closer to 2018 itself. It might be a better idea that whatever I save this year should be spent toward paying a lump sum toward my student loans in 2018. That would probably be smarter. I’m going to buy makeup regardless. But I only have 48 payments left to my private student loans. Whatever I save could potentially knock the number of private loan payments left down quite a few months. Er… Federal student loans are a different matter entirely. I will owe on them until I’m in my 50s probably.
- Do I count the opening deposit of $200 toward my makeup purchases and say I’m paid in full with about $130 in credit toward future purchases? Currently, I have bought about $70 worth of makeup since the first of the year. My frugal-self wants to say yes here but I kind of feel like that is cheating. The money in this savings account also includes general savings from each paycheck so it isn’t just makeup money. Since I’m depositing other things in this account, I think I’m just going to have to go with this not counting toward that $70 currently owed into the account.
- Should I count all the makeup purchases I make (including gifts) or just the makeup I purchase for myself? This is a huge conundrum for me. I buy myself makeup but I’d say about 20% of my purchases so far have been gifts to Mom and the kids. I don’t have a decision on this yet.
- If I only count makeup purchases for me, what about makeup I end up buying for myself but eventually give to the kids because it doesn’t work for me? If I only count purchases for myself, do I deduct the makeup purchases I don’t keep after the fact? This also feels like cheating but if I only count makeup for me, this is logical. However, that will create such a management fiasco of going back to receipts, calculating the retail price, taxes, and shipping paid toward that particular item. Then, balancing the account would be a nightmare. I’m probably going to say no, I’m not going to deduct makeup purchases after the fact. I probably won’t even deduct returns if they happen. Too much work!
- Actually, what about shipping costs and taxes? Does that count for this experiment? The easy answer is that these count just so I don’t have to go back and look at receipts. But if I am trying to be true to retail expenses for this experiment, do these charges really count? I want to say no to make myself feel a little less guilty about how much money I spend but I think I have to count this because I wouldn’t have the makeup without the taxes and shipping fees.
- What about beauty-related services? I got a pedicure the other day ($32.00). I also paid for Mom to get a manicure ($35.00). I tipped well for both services ($10.00 to each technician). Should those services count? How about the tips? It isn’t technically makeup. But I would certainly count nail polish if I ever bought any. Another conundrum without a solid answer yet.
Do you have any advice? Especially regarding questions 1, 3, and 6, where I don’t have a solid answer yet, what do you think? If you were doing this experiment, what would be your answers to these questions?