This lady is ticked off by bank fees. Credit: Betsssssy/Flickr
Whatever happened to credit and debit card fees? You might remember I wrote about debit cards being cash cows for banks, which was followed by a post on major banks eliminating fees. Banks exist to profit, so many are raising existing fees to make up for ones that have been disallowed. Here is a list from Billshrink with examples. The good news is that these fees are much more transparent and upfront.
- Credit card interest rates are rising. Over the past six months, nearly 20% of card issuers have (more…)
alancleaver_2000/Flickr
This list intrigued me because I continually ask myself if I am spending and saving responsibly. If many of these behaviors ring true it is time to consider changing your ways. How many of these habits are you guilty of? See my answer below.
The following list comes from Billshrink, a site that compares plans for cell, cable, and other services to see if you are getting the lowest price.
1. You charge group dinners on your card and keep your friends’ cash to spend.
2. You spend more than 40% of your total income on rent.
3. You’re constantly transferring your balance to get 0% interest on your credit card debt. (more…)
By Bobbi Burger Brunoehler of Bobbisbargains.
pupismyname/Flickr
I am against paying retail. Hence my motto, “Friends don’t let friends pay retail.”
However, sometimes even I have to go to a store and purchase something new. Hey, it happens to the best of us.
Let me assure you that when I do this deed I also ENSURE that I know the store return policy and keep my receipt, packaging and tags. If I am not 100% satisfied with my purchase, I return it.
I am amazed how many times I see items at yard sales, thrift shops and swaps that are brand new with their tags still attached. I always wonder about the economic condition of the seller. Are they wildly wealthy? Did they lose the receipt and figured they couldn’t get their money back? Or did they think it wasn’t worth the trouble?
I doubt anyone that is wildly wealthy is reading my blog (but if you are and want to make a donation to me, I am a willing recipient.) As far as returning items without a receipt; many stores will give you (more…)
If you are the parent of a teen and have been looking for the right time to talk to him or her about money – now is the time. Jill Russo Foster, author of “Cash, Credit, and Your Finances: The Teen Years
I’ve come to believe that financial education is the key for everyone. The sooner you start learning about money and personal finance, the sooner you can take control of your own finances. This book will start you off in the right direction and teach you how to build good financial habits.
Foster, who is now in the mortgage industry, started her financial career right out of college when she began working as a bank teller in an affluent neighborhood. She recounts that most people she saw at the bank wore designer clothes, had the latest car and were also on the overdraft list.
In the book, Foster uses examples of five teens that were given her book to read and later tells of the changes they made to change their money habits. The teens’ stories and her own – she admits to having 27 credit cards at one point – make the book easy to read. Your teen will be able to relate to the teens’ stories and learn from their success and failures.
This 84-page book will teach your teen about the basics of managing their money – think allowances and babysitting money – while thinking of long term goals like saving for college and short term goals like buying an iPod. The book is divided into five chapters that are filled with worksheets and practical examples for teens to understand. The chapters include information on creating a budget, the banking system, establishing credit, strategies for paying for college, avoiding identity theft and making major purchases.
This book is the first in a series of three books on personal finances by Foster. If you would like to win a copy of “Cash, Credit, and Your Finances: The Teen Years” for your teen, leave a comment explaining why your teen needs to read this book. If you can’t wait to get a copy, you can buy it on Amazon
Buying a copy supports BargainBabe.com.
By Bobbi Burger Brunoehler of Bobbisbargains.
HikingArtist.com/Flickr
I have just 25 minutes to speak about budgets at an upcoming conference – such a short period of time. As I started to prepare my talk I realized staying on budget and out of debt has only five key points.
1. You have to want it. No seminar, book or popular online money management software will help you to stay on budget unless you really want to. It’s like quitting smoking cigarettes. You must make a firm and true decision to DO IT!
2. Spend less than you make. Oh so easy to say but that is the bottom line. Somehow you have to increase your income and/or decrease your outgo until you are spending less than you make. It’s simple math.
3. You have to spend time looking at actual numbers. Our finances have become so automated that you can get paid, buy your food, pay your bills and transfer money to your significant other’s account without ever having to actually confront your economic condition. I spend at least one day a month going over my finances with a fine tooth comb. I examine all the receipts and evaluate where we are spending money. I balance every month’s statement and earmark money for upcoming expenses (like my daughter’s birthday or a new mattress.) I do most of my accounting with pen and paper. Bargain Babe has a 15-minute budget that is fairly simple.
4. Spending should not be an emotional decision. I don’t buy something (like a $750 leather jacket) because I “just HAVE to have it” or I “can’t live without it.” If I want it so badly, I should plan for it. Most often, all the items you buy on impulse won’t stand the test of time. Of course, I have a slush fund built into my budget that allows me the luxury of buying a little something (like a pretty hair clip) for myself when I see it – IF I really want it.
5. Ensure that the entire family understands and agrees with the above four items. It is vital that everyone is on the same page when it comes to budgeting. If necessary, have family meetings to go over these points until you have agreement. It just won’t work if everyone isn’t on board.
I’d love to hear any of your budgeting tips.
Casey Serin/Flickr
I get a lot of financial snail mail that I’m not sure if I should keep or not. I’m not talking about monthly bills – almost all of those I receive and pay electronically – but monthly statements, prospectuses, agreements about and changes to my investment account, and disclosure pamphlets. I get the feeling my bank is required by law to send this info to me, but if I read each of these brochures I would be up until 2 a.m.
My area of expertise is in everyday finance, not high finance. Instead of picking up the phone and tracking down an expert for an interview, I wanted to ask the BargainBabe.com community for their opinion.
What financial snail mail do you read? What do you keep? Is it necessary to shred everything I toss?
This change is weighing me down.
Grab your wallet and examine the contents. Are you carrying around things that make you vulnerable to identity theft? Are you needlessly carrying around receipts and cards that weigh you down? Are you missing important documents should you get into an accident? In my case, the answers are yes, yes, and yes.
Here is what’s in my wallet:
Vitals – license and current insurance card
Money – $41 in cash plus $4.91 in change
Plastic – main credit card, debit card, and AAA card
Plastic money – gift cards to Starbucks, TJ Maxx, Jo-Anns,
Plastic that is occasionally useful – loyalty cards for FedEx Kinkos, The Body Shop, Club Bev, Anthropologie, and the Ocean State Library system
Paper – 18 receipts, 8 coupons, two business cards, and a sticky note with two ID numbers I use for work
Lists – contents of boxes that I put in storage and carried in my cheap cross country move
Personal – two pictures of me and friends, two bobbi pins, half of a picture frame mount
My excavation was promoted by an email I received from a women’s personal finance site called LearnVest.com. According to the site, there are only 10 things you should carry.
1. Your main credit card—only.
2. $25 to $50 in cash.
3. A.T.M./debit card.
4. Driver’s license.
5. Insurance card for both health and auto insurance.
6. Transportation card, such as an unlimited rail pass.
7. Reward cards for stores you visit frequently (grocery, drug store, etc.).
8. Gift cards.
9. Membership cards (such as to your gym).
10. Airline cards.
Now for what not to carry in your wallet.
1. Personal information like your PIN (although a first name and phone number is OK in a note to someone who find’s your wallet)
2. Account numbers
3. Social Security card
4. Back up credit cards (they belong in a safe place at home)
Opps! I made three mistakes. Carrying around two ID numbers for work could make me vulnerable if someone know how to also log into that account. My receipt load is way too high; it’s time to sort out what I need to file and shred the rest. And I took my health insurance card out a few days ago and forgot to put it back in, which is a no no.
How did you do?
Having seen the value of my IRA drop month after month, I’m considering other means to save for retirement. Real estate? Not sure when that will be safe, either. One option I’m new to is gold coins, including the Gold American Buffalos.
The Gold American Buffalo coin is made of 24 karat cold and has a picture of a Native American on one side and a giant buffalo on the other. This coin, as well as American Eagles, gold bars and rare coins are available from the United States Gold Bureau, which has an A+ rating from the Better Business Bureau (I double-checked), and is known for pleasing clients with their customer service and competitive pricing.
One-ounce Gold American Buffalos are priced at just $59 above the spot price of gold. There are no commissions or hidden charges. If you are new to gold coins, like me, the site has education pages about
what to look for when buying precious metals. The United States Gold Bureau also has a newsletter for up-to-date tips and news on the gold market. If you want to learn more or you’re ready to buy gold, check out the United States Gold Bureau.
This is paid content. Interested in an ad? Read my Advertise page.
A bank vole captured by blackclough/Flickr
I recently switched banks for a higher interest rate on my checking account. My new bank is nontraditional so I had to consider what behaviors would let me take advantage of the account fully.
1. My bank does not have their own ATMs. However, all my ATM fees are refunded to me on a monthly schedule. As crazy as it seems, this is probably cheaper for the bank than maintaining thousands of ATMs across the country. I try to use the ATM only once a month so I don’t rack up a lot of fees, even though they are reimbursed, because I figure the bank factors the expense into other services.
2. My bank does not have traditional branches so I do not have access to bank tellers to make large cash withdrawals or deposits. This is rare for me, but uncomfortable if it comes up. The branches accept check deposits or I can mail in deposits.
3. The branches are few and far between so I do the vast majority of my banking online, through the mail, or over the phone. The bank website is great, I can request free deposit envelopes through the mail, and the US-based phone service is excellent.
4. I have free checking as long as I have a debit card for the account. This is my first debit card ever and I usually use it for small purchases. It does not feel as safe as using a credit card, however. I think that is just me.
5. My other bank services are free as long as I have a brokerage account, which I use to fund my ROTH-IRA. I like having my checking, savings, and IRA all through the same bank, though I’m worried it makes me more vulnerable if my identity is ever stolen.
All told, I’ve had to adapt my banking habits slightly to take advantage of my new nontraditional bank. But I think I made the right decision because I pay no monthly bank fees and my interest rate is higher that my previous bank. Knowing this, would you bank with a nontraditional bank?
xJasonRogersx/Flickr
AARP is an organization for older people, but I love its pro-consumer bent. A recent AARP Bulletin shared tips to make yourself look better to lenders. The list regurgitates old advice but is a good reminder to maintain financially healthy habits. Here are AARP’s credit tips on what harms your score and how to act:
Paying bills late - Car payments, electricity bills, even a late library fine can get reported to the credit bureau. Mark your calendar to pay bills at the same time every month or arrange automatic payments with your bank. My two cents: if you use Google calender, a reminder pops up for every item so you won’t miss a payment.
Closing credit cards - If you really want to close an account or two, close the most recently opened cards and the ones with the lowest credit limit. My two cents: doh! I just closed a longtime credit card because I no longer needed it.
Not checking your credit reports – Be vigilant about checking your credit reports at least once a year; nationwide consumer credit reporting communities such as Equifax, Experian, and TransUnion offer free credit reports. My two cents: true, but the free credit report does not include your credit score, which is like getting a paper back from a teacher marked up but without a grade.
Taking it to the limit- Aim to keep your charges to 30% or less of your available credit. If you’ve almost maxed out your cards, use them as little as possible for a while and pay them down.
Using cash over credit- If you don’t want to pay interest on credit cards, just pay the bill in full every month. My two cents: I disagree! My month-long credit card-less experiment revealed I spend significantly less – about 16% – when I use cash over credit. I think building savings is more important than building a high credit score.
Not shopping around for lower rates – Spend some time looking at cards and rates at Creditcards.com and Bankrate.com. My two cents: these are just two of the many great sites for finding a credit card that fits your habits.
Applying for extra cards- Too many inquiries at one time make you look desperate for credit. My two cents: but how many is too many? 2? 5? 13?
borman818/flickr
By Mike Barclay of 10CentsWorth.com
A lot of you may be surprised to know that I’m not the most financially savvy person. What might floor you even more is that I’m still learning. Here’s what I’ve learned and where I need your help. Deal?
Priorities and Will Power
If you were faced with the choice to pay rent or your cell phone bill, which would you choose? The logical choice should be rent, right? For a while, I would actually choose my cell phone. I figured it was okay to accrue late fees so I could text my friends. Well no more!
I have a file on my computer that sums up my bill priorities in the order they need to be taken care of and reminders on my calendar to check it periodically. Here are the top 5 things on my list as of right now:
1. Rent (I always make sure my rent is set aside. Being homeless = not a good idea.)
2. Court Fees (Speeding tickets people, speeding tickets. I’m no criminal.)
3. Cell Phone (For me, I need my phone on for potential employers, etc.)
4. Car Insurance
5. Credit Card Bills
I’ve conditioned myself to take care of the important priorities by having my friend reward or punish me with small things, like taking away my laptop for a couple of hours, or we’ll grab a bottle of wine as a reward. With proper budgeting I have enough to take care of everything.
Planning
I was an impulse buyer. I’d go grocery shopping with no list, a rough idea of what I needed, and a wad of cash. I’d walk into the market and out with a whole bunch of random food, inevitably forgetting an essential, like milk. I’d end up spending way over what I’d planned. Now, any time I go grocery shopping, I make a detailed list beforehand and, most importantly, I don’t deviate.
Banking Alerts
If my bank gave me the money they charge for over drafting, I’d be sitting on a beach somewhere drinking wine and doing nothing. I was horrible at looking at my account balance daily and making sure I had enough to spend. Thankfully, we now have modern technology. If you bank online, there’s a way to set up email and text alerts if your account drops below a certain amount. And (depending on the bank) you can even make it send you your balance text after every purchase. I don’t have an excuse to over-draft anymore.
Savings Accounts
My dad taught me the value of a savings account, I just never paid attention. “Have money, will spend” has always been my mentality. What I’m trying to do now is put away 10% of my check into a savings account and never look at it again. If I ever need car repairs or have an emergency, I’ll have money ready to go.
Some of these strategies I practice now. Others, I’m not fully on board with yet (e.g. putting money in a savings account). Do you have any advice to make it easier to manage my finances? What have you learned from your moments of weakness?
kevin/Flickr
This post is brought to you by Mint.com, an excellent source for a budget planner.
I’m getting fed up with consumers – the little guys like you and me – taking the blame for the economy. We as a nation spent like crazy, lost a ton of money in the housing and stock market, and now are getting blamed for being careful with our money. “Even as the economic recovery plods ahead, many American consumers are refusing to come along,” says an AP story published today. “They’re not spending freely – and they have no plans to.”
The story makes it seem as if “spending freely” were a good thing. Craziness!
The headline of the story in my local paper (it might have been different in yours) is, “Economy’s new threat: frugality.” If so, here is the face of the enemy: Marjorie Feldman of St. Louis, who owns a home that lost 20% of its value and who saw her retirement account shrink by 15%. Marjorie’s confidence in the economy will “never” recover, according to the story.
That’s code for she’s not spending like she used to. Marjorie’s new frugal spending habits, which many Americans have adopted, are important because consumer spending accounts for about 70 percent of our nation’s economy. If Marjorie and others in her situation would max out their credit cards, we could see the economy recover, the story seems to say.
Or…we could recognize that our economy has an unhealthy dependence on consumer spending that is not sustainable.
Instead of spending beyond our means, we could budget and live within our means. We could save money to retire before we croak. We could save so that social security, Mediccare, and unemployment are not our only safety nets. We could save so our kids can get through college without crippling debt. We could save so that when times get tough we have emergency savings to rely on.
Americans currently save an average of 3.1 percent, down from last year’s peak of 6.4, the story says. I save 10-20% of my income because I feel responsible for my fiscal future. Why do you save?
Anthrocopy/Flickr
Reader Diane sent me a darn good question via a comment on my post about approaching the end of my credit card ban. “When the experiment is over, will you go back to spending as before or will you make some changes,” Diane asked. “Either way, why?” My month-long cash-only spending experiment definitely changed the way I will spend money. Going forward I’m going to make three changes.
- I’m no longer going to rely strictly on credit cards because I scrutinize purchases more with cash. My goal is to use cash for everything under $50, which are the purchases that have the most wiggle room. Think I’m giving up a ton of credit cards perks? During the past seven months I earned an average of $16 in cash-back rewards each month. With cash I spent $200 less. That’s a much bigger perk!
- I’m going to strictly use cash for groceries because I spend so much more carefully with greenbacks. My dollars are finite no matter how I pay, but using cash makes my limits feel more apparent.
- I’m going to leave my credit card at home unless I specifically plan to use it. The more I pre-think about purchases before I leave home, the more likely I am to spend less.
Before the experiment I used to use cash for about 10% of my purchases and credit for the other 90%. Now I think my ratio is going to be closer to 60/40. What’s your ratio?
Clemson/Flickr
I was tempted to use my credit card four times this month, despite my pledge to spend only cash. None of the purchases were hard to push off or say no to. (I also put off purchasing airfare and making a hotel reservation for a blogging conference in July.)
1. A letter from my Alma Mater asking for money prompted me to pull out my credit card. Then I remembered my self-imposed ban. The letter is in my queue for May.
2. A coupon to renew my BargainBabe.com domain made me seriously consider breaking my credit card ban to get the discount. But the URL does not expire until June, so I can re-up in May.
3. A deal for a haircut (which I’m in need of) and hair coloring (which I’ve been contemplating) for $95 (orig. $225) landed in my inbox via SocialBuy, a new Groupon-type site for Los Angeles deals. I’m glad I passed, however, because a few days later I got a recommendation for a woman in Glendale who gives cuts for $20. My appointment is next week. (Full disclosure: SocialBuy’s founder is a friend of mine and is helping me improve my site).
4. Last year I forked over a whopping $400 over carelessly losing my iPhone. Ouch. A friend told me insuring an iPhone is super cheap, and indeed AppleCare costs $69 for hardware and software support, battery fixes, and phone support. The policy lasts for two years from the purchase date, so if I buy it in May I’ll get 19 months of coverage, which is less than $4 a month. The policy does not include damage from negligence, loss, or theft, however, so I may pursue other policies.
Frankly, I’m surprised that not a single purchase that required a credit card came up in April. I fully expected to confront 2-3 transactions that required credit. Is credit necessary after all?
Dplanet/Flickr
The day of reckoning is here. I sorted through my receipts and tallied my discretionary expenditures during my month-long cash-only experiment. The tally below does not include fixed bills like rent. (New to my forward-thinking budgeting system? It takes 15 minutes to set up.)
Overall, more than a third of my discretionary spending – 35 percent – is unaccounted for because I forgot to ask for a receipt. That means a picture of my spending provided below is woefully incomplete. This is also why some of my category totals, like meals out, seem low.
A number of seemingly random items sucked up my dollars – like bike repairs and gear in preparation for a triathlon May 1. I say seemingly random because unusual expenses like these pop up every month without fail. This is the main reason I created a forward-thinking budgeting system.
My totals for each spending category include tax.
Groceries: $172.22
Meals out, including coffee: $21.12
Drugstore items: $43.10
Bicycling gear and repairs: $169.38, including $100 to ship bike across the country and back
Business supplies: $15.86
Ski trip: $95
House and garden: $45.52
Gas:$41.57
Camping: $40
TOTAL accounted for spending for April: $643.77
TOTAL ATM withdrawals: $1,000
Cash left in my pocket: $11 (to last me until Saturday)
Total unaccounted spending: $345.23
Total rebates and gift cards earned: $29.69
Percent of spending unaccounted for: 35 percent!
My month-long cash-only experiment has taught me a lot about money. I dipped into savings only once, and that was to cover a $533 emergency mattress purchase. I’m telling you it really was an emergency! Grocery shopping takes longer because, with a finite supply of cash in my pocket, I add up the cost of each item I put into my cart so that I have enough money at check out.
