Do you spend your interest??

[Ima saver]

I love earning interest. I have a notebook that I track my money market account and all it's sub accounts (spec house, car account, christmas, vacation, etc.). I have one sub account for just interest.
Do you spend your interest or do you save it??

[jIM_Ohio]

I love earning interest. I have a notebook that I track my money market account and all it's sub accounts (spec house, car account, christmas, vacation, etc.). I have one sub account for just interest.
Do you spend your interest or do you save it??

The interest we earn increases value of EF. We have one months expenses in the bank... I'd think we save until interest gets us to 2 months or so (and that will take a while).

[disneysteve]

Do you spend your interest or do you save it??

I don't specifically spend the interest in that I don't withdraw the specific amount of the interest earned. However, I do regularly make deposits and withdrawals into interest-bearing accounts, so in a way, you could say some of the withdrawal money came from interest. I prefer to let my money compound as much as possible which is the best way to maximize the value of that interest. Let my interest earn interest and so on.

[Ima saver]

For a while, I was taking the interest out every few months and using it as an extra principal payment on my land mortgage. Now that I have paid the land mortgage off, I am letting it accrue.

[PrincessPerky]

interest has been useless as spending up untill this last month (a buck if)

but now that we will be getting more (ooh fancy 12 bucks) we plan on leaving it in savings till we get 6 months EF, which will take eons as we have decided to throw most cash on the car, and then the house.

Anyway when that magical (to broke selves) point happens we will cross the interest bridge..though I expect investment of some sort will be the 'spending'.

[bjl584]

Currently, I leave it alone. I'm in the process of building my EF, so I don't touch it.

[Aleta]

I have different things that I save for. I save for a car so the car gets its own interest. My Emergency Fund gets its own interest. Anything that I'm saving for receives its own interest and any escrowed accounts just become savings. I don't take away from it so I can't say that I spend the savings. I once knew a lady that like Ima had an account just for the interest and she said she learned a lot about interest compounding by doing that. Even if you have an emergency fund, it will need to increase in the future years anyway so as it collects interest, it will increase it.

[Aleta]

Something that I really got from reading YOUR MONEY OR YOUR LIFE by Joe Dominguez was the capital that you should build that would give you financial freedom. His idea in tracking your income and expenses was that eventually your capital would catch up eventually with your expenses. I guess that could be anything from rental income to interest. It is like Ima Saver says when she talks about the amount of interest that she is receiving today compared to how much she made from working years ago. Eventually, you would want to make enough that it would come in whether you worked or not. I gather from his book that he didn't push stock funds. That's what it seemed to me. He seemed to want to preserve the capital.

[Bookie]

I keep a record of interest earned by my various accounts, but I don't spend the interest. I watch it grow.

I live (and save) from my primary cash flow. Everything else gets tucked away in savings. Since I no longer have cc debt to service, I'm diverting those sums into savings as well.

[Aleta]

I think that that is the whole idea about getting out of debt. Everything goes to your saving account. Like you, I live off my primary cash flow as well. It is great watching your money grow. One day, I started figuring out how much I was making per day. That can be pretty exciting.

[Broken Arrow]

Save it.

[Ima saver]

I have been saving mine for over a year, it really adds up.

[Aleta]

Ima: Are you going to keep the interest it made or are you going to use it to buy more land or build another house?

[vsjhoc]

How I Would Know if I Were "Wealthy":

If my primary cash flow was from the interest.

[Aleta]

I would suppose that the capital that you needed to invest to get the interest would be covering your expenses. Wealth I don't know but if you can live off of your investments without having to do your hourly wage job - I'd think I was pretty wealthy.