Dear Dave,
My wife and I are following your plan, and recently we found some old savings bonds that had been given to her by her grandfather when she was a kid. Do you think we should go ahead and cash these in before they reach their final maturity date in a few months?
John
Dear John,
Absolutely! Every one of those savings bonds is accruing interest at the appropriate rate for the type of bond it is. The problem is every one of those rates stinks. I hate savings bonds. We’re talking about some very low interest rates.
Another reason I don’t like savings bonds is they’re not financial instruments which cause you to be responsible with them. People lose them, they forget about them, and then maybe they turn up in an old lock box somewhere down the road after making a whopping two or three percent.
Back in the day, they used to be positioned as patriotic and all that. But who wants to finance the stuff this government does? We’re not supporting World War II anymore, you know? Cash them in, and depending on what Baby Step you’re on, put it toward your emergency fund, your debt snowball, retirement, your mortgage—just be proactive, and do something better with the money!
—Dave
