While sipping my grande latte at Starbuck©, I swiped my debit card to pay for my morning cup of joe like I’ve done hundreds of times. This time I wondered, what was it costing me to purchase my daily caffeine jolt?
After scrolling (and cringing) through months of debit card statements, I was shocked. I was spending approximately $80- $100 a month... on coffee!
By skipping Starbucks© and making a daily cup or two of coffee at home or the office, I figured I could buy $1,000 worth of U.S. Savings Bonds in just one year. I was on a caffeine-induced mission.
I reached in the back corner of my kitchen cabinet, pulled out my shiny, barely used, coffee maker along with the cream “frother” and cleared some space on my kitchen counter. I then added my favorite coffee – including a Starbucks© blend – along with a few favorite flavored creamers to my grocery list.
I wrote down 40 “Buy A Bond” reminders in my calendar.
Since I didn’t trust myself waiting a month to purchase a $100 bond, I decided purchasing weekly $25 Series I Savings Bonds (the minimum electronic purchase amount currently allowed) would be a smarter way for me to stay on track.
I was realistic and took into account skipping twelve weeks of bond purchases throughout the year when I would likely need some extra spending money for gifts, vacations and holidays.
More importantly, periodically purchasing savings bonds in small denominations would be a simple and systematic way for me to save and help supplement my retirement. I could do this!
Currently Series EE and I Savings Bonds are available for purchase and both earn interest for 30 years. EE Bonds earn a fixed rate for the first 20 years that will not change (and may or may not change for the last 10 years of the bonds 30-year life).
I Bonds are composed of a fixed rate and a variable (inflation) rate. The fixed rate portion remains the same for the 30-year life of the bond. The variable interest rate can (and often does) change every six months based on market conditions. Even in the worst economic times, if the inflation rate is negative (due to deflation, which can offset some fixed rates), savings bond interest rates will never drop below zero percent.
Both EE and I Savings Bonds will never lose money and are backed by the full faith and credit of the U.S. government. To learn more, go to SavingsBonds.com
I felt an added sense of relief that I could cash in the bonds after holding them for just twelve months (although the last 3 months interest penalty applies for bonds redeemed in the first 5 years). If I had a financial emergency and needed cash, I could redeem the ones that were at least a year old, if needed.
My skip the Starbucks© plan was a success! I still remain fairly disciplined and continue to save money by making my own coffee (unless I run out at home). Admittedly, I do occasionally visit some of my old coffee shops to chat with my favorite baristas and treat myself to something new.
About SavingsBonds.com: SavingsBonds.com is an online financial bond management company providing essential U.S. Savings Bond information since 1992. For over 26 years, bond experts have created various consumer programs, tools