Sometimes the greatest temptation to not saving money is its accessibility. With credit cards, debit cards, checks, ATMs, and all the rest giving us easy access to our money, it can be hard - even when it's put in an account that's supposed to be specifically for savings - not to touch that money when temptation strikes.
It can instead be best to hide that money in accounts or investments that makes it more difficult to get to. That's what we do at least.
This doesn't mean that it's impossible to get to our money if necessary, just that it might take a few extra steps or be somewhat of a hassle to have access to these funds. Even just an extra step or two often acts as a deterrent to touching our savings.
Here are a few investment vehicles that make it just a little more burdensome for us to get our money, and therefore help us keep our hands off it.
CDs
In the past, we've found that putting money into a certificate of deposit can be a great way to earn interest on our savings and keep our money out of reach. An attached early withdrawal penalty can act as a deterrent to touching that money.
On our most recent CD (the only one we've ever had to withdraw early), we not only had to sign an early withdrawal statement - which in our case was done long-distance by way of an email within our online banking account since we were in another state at the time - but we also suffered a penalty of three month's interest, which was a big detractor to withdrawing the money in the first place.
Savings Bonds
I've been a long-time fan of government savings bonds and feel that I-series (inflation based) bonds are a good way to combat inflation. However, putting money into these bonds is also a good way to keep it safe and out of easy reach.
Knowing that to cash such bonds (I still have the paper bonds, not electronic), I have to get them out of the safe deposit box, and then wait while the teller converts them to cash, while not that difficult, is a deterrent nonetheless. Then I'd likely have to pay taxes on the interest earned. But more than this, knowing that if these bonds are less than five years old, I'd have to forfeit the three most recent months' interest, is yet another turnoff to cashing them in early.
Retirement Accounts
Putting money in retirement accounts has been another great way for us to allow some of our money to remain untouched. Knowing that removing this money before we hit retirement age would result not only in taxes being owed upon the proceeds, but owing a possible 10 percent penalty as well, is certainly a deterrent to touching it.
Our Home
Some people prefer to take on a larger mortgage in an effort at keeping more cash liquid and available for other uses. Personally, we've preferred to put more money into our home. This not only helps us pay less in mortgage interest, but it keeps our money out of reach.
Sure, we could take out a home equity line of credit if we needed it, but that's not easily done when compared to just popping into the local banking branch and making a cash withdrawal or hitting the nearest ATM. Having put a large downpayment on our first home, and buying our second home in cash has helped us keep that money from being touched, yet keep it as a sort of reserve account were it ever necessary to have in an emergency.
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