Luna Llena

The high from making my money work for me.

Money is an energy. Nothing makes me feel more energized than buying something that I know won’t send me back into debt. How do I know? Because I plan for it. Every time I swipe my credit card, I stop to think about the cash I have sitting in various accounts. I have two checking accounts. One is my main checking where my direct deposits come in and the other holds my grocery and fun budget. Then I have a high yield savings account for my emergency fund and a separate high yield savings account for my sinking funds.

A high yield savings account pays you a much higher yield on your money. The average bank will pay you 0.06%, which comes out to pennies sometimes. Meanwhile, a high yield savings account can pay you 0.75% like Ally does now or more. Before the pandemic some high yield savings accounts were paying 1-2%. Let your money make you money while it sits.

Do you need two savings accounts? No. I just have two because I have too many sinking funds. But one will suffice. My personal favorite is Ally bank because it allows you to categorize your money into 10 different categories within the account. I don’t know if it’s because I am very “Type A” or because my moon is in Capricorn, but I love organization. When I feel like there is little I can control in what happens in life, controlling my money empowers me.

There are no rules to having only one bank or only one checking account. In fact, having separate checking accounts for fixed expenses like automated bills and a separate one for variable spending like food and gas can help you. It helps you keep an eye on the money you are spending in variable categories to make sure you don’t overspend. There is no confusion as to what money is for what, like when you have it all sitting in one checking account.

If you plan on opening a second checking account look for checking account opening offers. Banks will have special offers that give  you $100 or more to open a checking account with them. Make sure you read the details to qualify. I actually took advantage of an offer at my credit union. I got $100 for refinancing my car to a lower interest rate with them! Talk about a win win. When you are already going to do something like open up a second checking account, refinance your car or pay for groceries, the banks might as well give you something back for that. That’s exactly what leveraging opening offers and credit card rewards does!

There is something about being able to buy something you want with a credit card and earning points or other rewards. Rewards that you can later use to live the life you have always imagined. I will talk more about this part in my next column!

But doing so while knowing you have the cash on hand to pay off that credit card completely every month. There is a high I feel every time I pay off my credit card. Knowing that I am no longer under the control of high interest and fees. But I am in complete control of how I spend my money.

I believe in the power of credit card rewards to help us get more out of life. Rewards have made a huge difference for my family of three since we live off one income. On our last vacation they saved me $599 off our flights. You can earn cash back, points or miles from using credit cards. Debit cards don’t give you anything in return for their use. In fact some banks charge you for having a checking account. Paying with credit cards is also more secure. When someone steals your debit card information or your debit card they can affect your cash flow and cash immediately available to you. It usually takes time for banks to get your money back. Meanwhile, many credit cards have zero fraud policies that protect you from paying the fraudulent charge in your accounts.

I do have to mention however that I only recommend using credit cards this way IF YOU CAN USE THEM RESPONSIBLY!

What does it mean to use them responsibly?

It means you pay the credit cards in full every month. It means you stick to your financial plan, aka budget, even if you know you have a higher credit line. Make your payments on time. Review your transactions regularly to catch any mistakes or fraudulent charges. If you do this then using your credit card can also help you build your credit, something debit cards cannot do.

There is a beautiful flow between my budget and my decisions. My budget usually stays the same from month to month unless there are special occasions that require spending money. If you have thought ahead and planned for these occasions, set money aside for them months in advance, then spending the $50 on a gift or $180 on a flight is freeing.

I want you to feel that boost of oxytocin when working on your money. Feeling happy with the decisions you have made and hopeful for your future. I found my groove with my money once I made a decision that I didn’t want to live in debt. I had to put in the time and the energy for a few years to get out of debt and find my groove with my budget. But once we started flowing, we flowed in so much abundance!

Bring the power of positive financial energy into your life by taking control of your finances. If you are currently in credit card debt, read my previous column to read how I went from 18k+ in debt to using credit cards to my advantage. If you are scared of credit cards, follow me at @mom_money_boss to demystify credit cards. The more you learn about them, the more you learn to use them to your advantage!

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