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?
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Get 70% off all Luggage at Calvin Klein. Expires July 7, 2010.
Get $50 off all computers with trade-in at Staples. Expires September 18, 2010.
Book cheap one way flights from $43 and up, plus get an extra $10 off CheapOair. Deal ongoing.
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?
I totally overspent during the first week of my cash-only experiment (yes, I really did give up credit cards!) so I drastically scaled back during my second week. My cash outflow was drying up when – BAM! – I had to buy a new mattress. Believe me, it was that or sleep on the couch.
My mattress purchase leaves me with $157 for the month. Unless…I dip into savings to cover the mattress. Here’s how my spending looks so far.
Week 1 spending – $470 (including a pricey snowboarding trip)
Week 2 spending – $40 (just groceries)
Emergency mattress spending – $533
That adds up to $1,043. My target was to spend $1,200 this month.
Loading ...UPDATE: For some reason the poll is not working. We made some tech updates recently on BargainBabe.com so I’m checking to see if those affected the polling features. Hang tight!
This guest post is brought to you by Earl Fischer, who writes for The Digerati Life, a site that covers all things personal finance, from investing to budgeting and money management. Check out the site’s reviews of online brokers and the best credit card programs that are available today.
Know what the world’s oldest profession is? Well what about the world’s oldest business? That would be a bank, I believe. No condescension intended by the analogy. In fact, I like banks. I am a client of at least four of them. Banks have a way of sustaining an economy just as much as it can take one down.
What I dislike about some of these large financial institutions — aside from the fact that quite a number of them have siphoned my tax dollars, no thanks to government bailouts — is how they tend to resort to deception in trying to entice one to become a client. Take my recent experiences with two such banks whose names I’d rather not mention right now.
Extra Bank Offers That I Don’t Care For
1. The Upsell
From one bank, I received a replacement card in the mail recently. The instruction they gave me was for me to call a toll free number in order to activate my card. Pretty standard stuff. Well, I followed the instruction and after going through the entire rigmarole of entering my card’s last four digits to giving the names of my first dog’s offspring, I was informed that my card was now activated and ready for use.
Just as I was about to wish the phone representative to have a pleasant day, she tells me that I am entitled to an additional service which would give me fraud and identity theft protection, credit monitoring services and other security features. The use of the word “entitled” can be very deceptive. Does this mean it’s like a gift that I just need to accept? Or will it cost me something? Remember, this is a bank and nothing ever comes free. So the fact was…. there was going to be a monthly charge of $6.95 (not the true amount). I told her I was going to think about it and will give them a call when I was ready for this. But she was insistent. She told me that it would be better for me to avail of the service right away because should I later change my mind, I can cancel it within a certain period and get a refund of the fees paid.
Wait. Hold it right there! It’s obvious what the bank was trying to do. They are capitalizing on the fact that people like me might not read the account information that they send and that I would become too busy to call them to cancel so in the long run, the bank makes a fortune. Of course, $6.95 a month is hardly a fortune. But think of 5,000 busy credit card holders and that’s a lot of money. So just like with drugs, I just said NO!
2. Does “no maintenance fee” really mean there are no fees?
My other experience involved this online ad which I came across while paying my credit card bill. In some cases, to encourage you to open a high interest savings account online, a bank may offer you a cash bonus for the effort. I caught on to one such offer lately, especially when I noticed the big bold letters on the ad that said the words “No maintenance fee.” I decided to fill out a savings account application online. Just as I was about to hit the final key to submit my application, I decided to confirm the terms and conditions of being an account holder one more time.
Lo and behold! Upon a second review, that’s when I noticed that the account would carry a monthly service fee. In fact, because of this fee, my initial deposit would have been exhausted after just three months. To make a long story short, I didn’t like how this bank would dangle a carrot by promoting their “no maintenance fee” account, but in the end, would turn around and still charge me a monthly service fee. Sneaky! I had two choices at that point –- hit SUBMIT APPLICATION or hit CANCEL. And so did I hit cancel? Well, does a zebra have stripes?
This post is brought to you by CouponCactus.com, a great source of online coupon codes for taxes, groceries, and more.
BargainBabe.com readers are above average – way above! A whopping 75 percent of readers pay off their balance every statement, according to a recent poll in which 161 readers voted. Wow! The national average is 59 percent.
Just a smidge – 22 percent – of BargainBabe.com readers carry a balance. That is half the national average of 41.37 percent of Americans who carry a credit card balance. Another 3 percent of readers chose the ambiguous “other” option, including Danielle, who said “I can’t get a credit card, because I don’t have a credit card.” Hmm, really?
These impressive stats got me thinking…are BargainBabe.com readers above average savers?
Vote first then I’ll tell you how you compare to the national average on the next page!
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Just got some interesting economic factoids from the website BillShrink.com. Are you part of the savings trend?
- 46% of credit card holders paid their bill in full each month in Feb. 2009
- 59% of credit card holders paid their bill in full each month in Feb. 2010
- The average American family had $2,000 in unexpected expenses last year
- Americans have reduced their debt by $101.2 billion in the past 14 months ($1,874 per household)
- We are currently saving at record rates, setting a 15-year high (Check out BillShrink’s super cool graphic about American’s personal savings and debt, which goes back to 1960).
- We still over pay for lots of stuff, including ATM fees, credit card late fees, and dealership auto maintenance (though I’m seeing coupons from dealers these days)
To get this data BillShrink surveyed 154,000 users on its site from February 2009-January 2010. The pay off rate has been steadily increasing each month, according to the responses below.
Yes, I pay off balance each month No, I don’t pay off balance each month
02-09 46.03% 53.97%
03-09 45.92% 54.08%
04-09 41.75% 58.25%
05-09 43.19% 56.81%
06-09 46.28% 53.72%
07-09 46.92% 53.08%
08-09 48.72% 51.28%
09-09 51.21% 48.79%
10-09 51.99% 48.01%
11-09 54.73% 45.27%
12-09 57.25% 42.75%
01-10 58.63% 41.37%
I’m curious how BargainBabe.com readers compare to the national average.
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