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Archive for February, 2010

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Your bank and overdraft protection…

Friday, February 26th, 2010

Today’s article, Banks use scare tactics to get you to sign up for overdraft protection, addresses the new bank overdraft “protection” law that basically says that you have to voluntarily sign up for the overdraft protection to let your bank keep processing your debit card transactions even after you run out of money.  As far as I’m concerned, at $35 per transaction, overdraft protection is no service to it’s customers, and certainly shouldn’t be anything someone would voluntarily sign up for!

Now, I’m sure you can tell from above, we believe if you can’t keep a minimum amount in your bank account, or can’t keep from overspending because you aren’t diligent, then you shouldn’t have a bank account, and should operate on a cash only (money orders to pay bills) system.  However, if you choose to have  a bank account, and struggle to keep funds in it, then use the other services that many banks offer, that don’t come attached to a ~$35 fee PER TRANSACTION! 

The scary stuff you get in the mail from the bank, that says your debit card will stop working and the like is true, because OF COURSE it should stop paying people if you don’t have any money in your account!  That is the way it is supposed to work!  The card is not supposed to let you spend more than you have!  Overdraft “protection” is like you receiving a mini loan from the bank…kind of like those payday check cashing places, but wrapped in a prettier sounding name.  Ignore these letters from the bank!  You don’t want to keep paying $35 a transaction loan fees for the rest of your life!  DO NOT opt in to this plan, just learn to watch your account and don’t over spend. 

If you absolutely CANNOT LIVE without overdraft and refuse to be on cash only (hard headed, aren’t you??), then there are a couple of alternatives.  Many banks will allow you to link your checking account to your savings account to prevent overdrafts.  Some will also link it to a line of credit (not something we recommend) to prevent these overdrafts from happening.  Neither of these programs are free, but they are cheaper than overdraft, and won’t catch you off guard either, because, let’s face it, if you don’t have the money to cover your purchase, you definitely don’t have the money to cover your $35 a transaction overdraft “protection”.

If or when you start receiving these notices from your bank, do yourself a favor, and “just say no” to overdraft protection…instead, be more diligent with your account, or switch to cash!

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Some stars should keep their day jobs!

Wednesday, February 24th, 2010

There’s a new show about to start on NBC called The Marriage Ref, and while I think it’s likely to be funny, I also think there will be people out there who take the advice offered by the celebrity guests as more serious and less entertainment.  Why shouldn’t they take it as real, valuable or decent advice?  Because the stars slated to offer this advice include the likes of Madonna and Alec Baldwin!  Really?  Who in their right mind would take marriage advice from Madonna, given her 2 divorces and other past relationships.  What help could she possibly offer a struggling couple that a real, licensed therapist couldn’t do better? 

And let’s not forget the nasty divorce between Alec Baldwin and Kim Bassinger.  That situation was all over the entertainment magazines and shows when it was top news, and most of us remember the not so distant and very public fight he had with his 11 year old daughter, in which he called her a pig.  I don’t think he’s the best choice for helping a couple work things out.

To be fair, I think that this show will be hilarious, but only because the advice offered from the celebrities will be, to put it politely, “sub par”.  I worry that people watching it will give them credit as being an “expert” on fixing relationships, simply because they’re a celebrity.  We have a tendency to give people more credit than they’re due in our society if they’re on TV, which is ridiculous.  Just because someone is on TV does NOT make them an expert, and I hope our readers never forget it!

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Saving on ATM fees!

Monday, February 22nd, 2010

ATM fees are one of those things that we all probably wish would fade away (except perhaps the owners of the banks), considering they usually run $2-$4 each time, possibly from each bank!  Luckily, there are a few ways to avoid these fees.

The first is the obvious choice: Use only your own bank’s ATMs.  Not one on your current daily route?  Look into changing routes, or possibly changing banks to a bank with ATMs near your home or on your daily route.  One caution though:  Be sure if you decide to change banks for a more convenient location that you don’t switch to a bank with less features or worse interest rates/customer service. 

A better choice?  Skip the ATM and get cash back when you’re buying groceries or picking up something at the drugstore…any place that offers a cash back feature is a substitute ATM, without the fee.  Another good reason to use this method?  You definitely do not have to go out of your way to get the money you need!

Another option is to switch to an online bank that refunds its ATM fees (a new benefit, recently cropping up).  A great place to find a bank with this feature is Bankrate.com. 

With any of these options, you can save money on your bottom line every month.  The money you save can be allocated to paying off debt or go into savings, because let’s face it, you weren’t missing it in the first place.  It might as well be put to good use!

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Why spending today costs more than you think…

Friday, February 19th, 2010

Once again we look to Dan Miller and his 48 days blog (visit the links section of our website for more info on Dan Miller) for an interesting article.  Today’s article, Look rich-die broke was inspired by a sign in front of a car accessories shop in Florida that read: “Rent your wheels and tires here”.

Like furniture rental places, you can apparently also rent the rims you’ve been dying to have for your car as well, that way, you can look cool, and rich, even if you’re broke.  Dan Miller has a knack for talking about topics that are important to me, and there are few things that get my blood boiling more than people who spend themselves into debt chasing status.  He highlights the new book from Thomas Stanley, author of The Millionaire Next Door and The Millionaire Mind, both of which are excellent books (I will be buying and reading this newest addition to his works).  This new book highlights some of the habits of the truly rich (as opposed to those who only appear rich), which, in general, does not include renting your rims. 

Read the post, and go buy (or check out from your local library) Thomas Stanley’s newest book, Stop Acting Rich.  Let’s all begin to be open minded to the idea that having fancy things (for status) and spending obscene amounts of money on weddings and “McMansions” are not the real way for the average person to become wealthy.  Once you stop believing you are going to simply luck into a fortune, or become famous and rich out of the blue, you can focus on becoming rich the way most people do…through saving, working hard, and striving to be the best at their passion so they can advance themselves in that particular field over the years.

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Obsession with Hollywood not good for the pocketbook…

Wednesday, February 17th, 2010

Personal confession: I love reading fashion magazines.  I like to see what trends are out there, to know what the best beauty tricks and products are etc.  Unfortunately, part of that world is the celebrity.  Magazines put them on their covers, they include their opinions on everything from decorating to politics (yes, because acting in action movies with big budgets qualifies you more than the average person to decide what’s wrong with this country) and they make them larger than life.  Now, as much as I love looking at the pictures and reading the articles, I can’t stand the obsession with Hollywood and being famous.

What do I do with my fashion knowledge??  I use it to shop for bargains at retail stores that aren’t going to break the bank.  Some people, however, think that they have to have what’s in the magazine, and what the stars are wearing, and they blow through their credit card limits barely noticing as they chase the current trends.  These poor people would rather be in debt than off trend or insignificant.  They chase celebrity status and think they are entitled to the best things in life.  I feel very bad for these people, because they don’t understand the damage that they’re doing to their lives, all in the pursuit of fame and appearances.  Do a google search for how to become famous, get 80 million results…search for how many people become famous, and get no relevant or accurate results.  For many people, this is an obsession, and it will cause them a lot of heartache throughout the years if they don’t change.

So, what are a couple of ways to turn the negatives of obsessing over fame and status into a positive?  Well, deciding to become the best at what you do, even if it means you’re not famous or on TV, is a good start.  That way, you’re pouring your energy and ambition into something that is likely to help you secure a decent lifestyle and a comfortable retirement in the future, and you’re not distracted by what is not likely to happen.  Also, challenge yourself to either save everything you were spending on those expensive lifestyle goods, or challenge yourself to find the absolute best price on them.  You’d be surprised at how much money you can save, if you just stop paying attention to the designer label!  

Remember, being an adult isn’t about age…it’s about character, attitude and actions…don’t let your actions reveal you to be a child, only out to get attention and the latest, coolest toys.

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Saving on auto insurance!

Monday, February 15th, 2010

Premium prices on auto insurance are a killer.  Nobody enjoys paying more than they need to for insurance, so here are some ideas on ways to save some cash. 

  • Raising your deductible can save you plenty of money, if you are able to cover said deductible when and if you are in an accident.
  • Skip the collision insurance if your car is worth less than 10 times what you’d pay in a year for the collision insurance.  Need to know what your car is worth?  Got to kbb.com to find out!
  • Check into other discounts that your auto insurance offers, like good driver discounts and good grades for teens.  Another option to check into?  Combining home owners insurance and auto insurance at the same company can save you money too!
  • Check around and compare prices at insweb.com.  You might be able to lower your rates by up to $300 less than what you’re paying now!  

Good luck!  If you have any other ideas that could help lower auto insurance, feel free to share them in the comments section!!

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Cars, cell phones and burgers…

Friday, February 12th, 2010

While researching for today’s financial news post, I had a problem that I’m not sure has happened in the past.  I found TOO MANY good articles to write about!  Now, they’re not exactly hard hitting journalism, but they are all something our readers/consumers should be aware of, and so I’ve decided to share them all.  For the full story/article, you will need to click on the link and read it at the source.

  • Majority of scrapped GM,Chrysler dealers file appeals - Basically, what’s going on here is that GM and Chrysler, in order to stay in business, had to cancel contracts with some of the dealerships that owned the rights to sell their cars.  The dealerships, instead of finding a different product to sell, or closing down, are filing appeals to FORCE the 2 companies to keep supplying them with inventory or to pay a huge settlement.  This will cost the already struggling automakers (remember, they were bailed out already) even more money, and they probably will struggle with getting back on track and making a profit.  I hate that these dealerships will have to close and that jobs will be lost, but when a company expands too far and has to draw back to stay in business, this is what happens.  By trying for a settlement (these dealerships agreed to the terms of the contract, they knew the contract could be terminated), they are actually hurting the company more.  Nice.
  • Toyota’s next problem: Lawsuits - With the multitude of recent news stories and recalls, Toyota is working around the clock to combat the bad press and sort out their problems.  It might not help, though, thanks to the over 30 lawsuits (already, and growing) and class action suit (there will probably be more later) that are already filed against the automaker.  Here’s the deal…Toyota should pay for any medical bills (and final expenses etc.) of those people found to have directly been injured or died because of a faulty piece of equipment in the vehicle, and I have no doubts in my mind that they would willingly pay these costs.  There are 2 problems that stink with this situation though; 1. Some lawyers just see dollar signs and think of a big payday, so they will file suit for ANYTHING, even things their client doesn’t deserve, and some judges will award it, which just causes more financial problems for the automaker, and could cost jobs for their employees, and 2. the more lawsuits and such that are filed, the more bad press they receive, which could also cost money/employee’s jobs.
  • Your cell phone company’s dirty little secret - The big carriers have come out recently and lowered their prices on the “voice usage” side, or the “talk time” side of their business, but their secret is that they’ve started charging non smartphone users a fee to access the multimedia capabilities of their phones, whether they want to or not.  They say it’s because most people don’t know they can access the net, so they are making sure the user gets full use of their phone.  I say bull crap.  I shouldn’t be forced to purchase a service I don’t want.  I have a smartphone and DO NOThave a data package, because I don’t need one.  I did not buy the phone for it’s ability to surf Facebook, I bought it for other features like touch screen/qwerty keyboard/nice layout/and a calendar.  Maybe it’s more phone than I needed, but that’s my choice.  They know that people pick the phone they want, and so they figure they can charge you extra for service, because you like the phone.  It’s sneaky, but clever.
  • The burger and beverage recession - This one actually surprised me, but not in a bad way.  Coca cola, McDonald’s and Molson Coors all reported that their product demand is stronger abroad than in the US.  These are the products that we think of as recession proof, but apparently, people are still not willing to part with their dollars for them!  I very much hope that the companies can cut costs and innovate to continue to be profitable, but I am very excited that consumers continue to be wise with their money.  Spending less and saving more is a proven way to have something for yourself as you get older.  Are there quicker, more volatile ways?  Of course.  But with great gains comes great risks.

Follow the links to see the full articles!

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Valentine’s Day tips and ideas…

Wednesday, February 10th, 2010

Much to the dismay of many men across the country, Valentine’s Day is this weekend and now is the time to start planning (earlier would have been good as well, but I’ll take what I can get).  So, say you want to do something for Valentine’s Day, but either can’t think of anything, or are on a tight budget…what do you do?

Well, if you are having trouble coming up with creative ideas, let me put your mind at ease that most women (not all of us, unfortunately…even though Valentine’s Day is OPTIONAL, some women expect the moon and more) are appreciative of anything you do.  So no matter what it is, the fact that you’ve done something is enough to make us happy.  That being said, if you want to get creative with the traditional Valentine’s Day ideas, to score some bonus  points, there are some great ways to do that.  For example:

  • The trifecta – Flowers, candy and jewelry.  We all like roses, but get creative and get some orchids or tulips (red or pink are probably best).  Candy is great unless she’s health conscious, so either get her favorite chocolates (they don’t have to be expensive, just her favorite) or try something a little more healthy, like her favorite fruits or nuts (the expensive ones that she won’t buy herself).  Jewelry is a personal thing, but as long as you know which color is her favorite (yellow or white gold) and which type of jewelry (bracelet, earrings or necklace) you should be fine.  No matter what you choose, be sure to get creative and hide the box where it will surprise her.
  • Dinner and a movie- This is a great gift for the significant other that doesn’t get to go out much.  The dinner should be to a nice place (where she can get dressed up, if she likes that sort of thing) and the movie should be her favorite (yes, that could mean chick flick, but come on, it’s only once a year, I know you’re man enough to live through it).
  • Cultural – If your girl likes a little culture, a trip to the theater or a museum might suit her.  Take her to her favorite cultural outing, or to a new place (or show) she hasn’t been to yet.

If  you’re on a tight budget, some of these things can sound out of your reach.  Don’t worry!  These are ways to be sweet to your significant other while watching your pennies too!  Here are some examples of the above ideas, on a budget:

  •  The trifecta – Flowers, candy and jewelry.  Flowers on a budget at Valentine’s Day isn’t too bad.  You can get them at a discount store, like Costco or Sam’s Club/Wal-Mart, the price will be what you like.  Also, it pays to buy them a week early and give them to her then, since the price will be lower (unfortunate, but yes, the florists jack-up the prices on Valentine’s Day).  Candy is easy on a budget…instead of opting for an expensive box of chocolates, bake her a delicious dessert.  This satisfies her sweet tooth, saves money and scores you points for effort!  Jewelry is easier than you think on a budget.  Most women like “costume” or “fashion” jewelry, so find out her favorite costume jewelry designer, and, if it’s in your budget, get some.  Not in your budget?  Opt for something personal, like her favorite movie on DVD, with a bag of popcorn and a note about having a movie night, or a professional massage (check your local massage school, since they often offer these services at a fraction of the cost…or, give her the massage yourself!).
  • Dinner and a movie – If she likes to go out, do a dinner out, but scale back and take her to a moderately priced place.  Otherwise, cook for her.  You can buy the ingredients to make a fancy dinner at a fraction of the cost of that same dinner out.  Set the table for a formal dinner, with full silverware, linen napkins and candles.  Inform her that she should “dress” for dinner, and be dressed up yourself, since it will make the experience more memorable.  The movie can be watched at home (budget friendly), and if you want serious bonus points, a little dancing in the living room never hurt any man, I don’t care if you’ve heard rumors to the contrary!
  • Cultural – Well, museums are still priced right for the budget conscious this year, but the theater is out, so if the museum isn’t your thing, you could both go donate blood together, or do some community service work together.  Not in that kind of mood?  Well, find a safe but culturally different part of town, and go on a mini “tour”.  Walking, biking or driving, it’s up to you.  Just do something to make it memorable.

There you have it!  A few (and long winded) tips on ways to get creative or stay in budget for Valentine’s Day!  Good luck, and I hope everyone has a wonderful holiday!

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Fees and mirroring…

Monday, February 8th, 2010

For most of us, fees are the type of bill that give us heartburn or headaches.  They stink!  And, if we’re actually paying attention to our bills, fees just irritate us to no end.  Especially when we see all the extra taxes on there lumped in with the fees, since we give Uncle Sam plenty out of our paycheck every year.  But noticing these fees is very important!  As a matter of fact, being vigilant and reading through your bills as they come in is very important, since not only might you be paying a fee you shouldn’t, but you could also catch a company in the practice of “mirroring”.

I will be the first to admit that it is sometimes difficult to decipher fees when the bill comes in, but that’s no excuse for not knowing what is happening on your account.  If, after pouring over the bill for a little while, you still can’t figure out what is going on, call the customer service line and ask them to explain it.  A nice added benefit?  If you’re more vigilant about bills, it might carry over into your bank account, and then you won’t be charged overdraft fees (if you were overdrawing in the first place, because let’s face it, you shouldn’t be).  Overdraft fees from banks are one of the biggest stupid taxes around.  If you pay attention to how much you have in your account, you won’t be charged.  It’s only when you are unaware that they happen, and no one should be unaware of what’s going on with their money.

Now, how about “mirroring”?  Mirroring is a practice of charging you twice in the same month for only one month’s service, by companies who have access to your bank account because you’ve set them up on an auto pay function, where they have access to your account.  I use this feature myself, although, truth be told, I’m very sceptical of it.  We check our bank statement carefully each month to ensure that mirroring does not occur, and it has happened to us in the past.  Usually it’s not terribly complicated to get adjusted, if you catch them quickly.  The problems start to occur when you haven’t noticed the problem over the course of months, or a year, and them try to get your money back.  They have had it for a year!  It doesn’t always go well if you wait.  Remember, if you give a company access to your account, then you have the responsibility to yourself to ensure that they are doing right by you and only taking what they are supposed to take.  Never let them take advantage of you!

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Reality check for the amount you’re saving…

Friday, February 5th, 2010

Do you think you”re saving enough?  If so, are you sure?

Today’s article, titled, How much should I save?by Donna Rosato, is an in depth look at an entrepreneur and her retirement portfolio.  The entrepreneur is hoping that a financial planner who looked at her portfolio will “bless it” and tell her good job.  Unfortunately, like most people, she isn’t saving as much as she thinks she is!  Most people think that by saving anything, or by getting their “company match” in a 401k program that they are set for retirement…they’re not.  Yes, it is good to get that company match, but if that is ALL you’re saving, you won’t be able to retire with the same lifestyle you have now, and that is where the misconception comes in for a lot of people.  They think, “oh, well, as long as I get my company match, I can retire living at the same level I live at right now”.  WRONG!  If it were that easy, we’d all retire with no debt and a vacation condo!!  As the financial planner in the article figures out, the entrepreneur is saving less than half of what she needs to retire at her current lifestyle level. 

What is going on here?  As adults, we underestimate things…it’s what we do.  For example, we underestimate the amount of calories we take in in a day (to the tune of 20%-40% from what I have read) and we underestimate how much we should be saving.  So, how do you keep from underestimating things?  Get some help!  You can pay for it, or get the free kind.  Either will be better than nothing, but if you’re paying for it, be sure that the expert isn’t just trying to sell you products…if they are, then they DO NOT have your best interests in mind!  Need some basic (and free) ideas on how much you should be saving?  Check out this link at CNN Money, to get a rough idea of where you are and what you need.  Some extra tips are to be diversified, preferably in growth stock mutual funds, and, the article and I agree, that small cap, mid cap, large cap and international funds are all good places to invest your cash.   Whatever you do, figure out what you need to retire.  Don’t just think that a 6%-8% contribution to your 401k is enough.  Max it out!!  Start contributing to a Roth IRA!  HAPPEN to your life…don’t let your life HAPPEN to you!!!

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