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How Paying By Check Cost Me Money
One of the last bills I actually pay by check is my credit card, and it's come to bite me in the ass.
When we moved back in November, I changed my address with the credit union where I have my credit card. But apparently, Visa never updated it in their systems.
So even though I got my first two bills thanks to mail forwarding, my last two bills never came.
Because I didn't get my bills, I didn't pay my bills. Now I've got a past due notice and some finance charges sitting on my balance.
Thanks, Visa.
I called up the credit union, and they have my new address in the system, so they're blaming Visa. Thankfully, they're looking into getting the finance charges removed and I'm paying the bill right now.
If I had automatic payments set up for my credit card, this wouldn't have happened. My bill would have been paid, and I wouldn't need to take time to straighten this out and worry about any repercussions.
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Are You Saving For the Right Reasons?
One of the most basic questions anyone committed to saving money has to ask themselves isn't as easy to answer as you might think.
Are you saving for the right reasons?
I touched upon this briefly when talking about saving aggressively, but it deserves its own discussion.
When you say you're putting 10% of your salary into your 401(k), or you're pinching pennies to start a college fund, do you really know what you're saving for?
It's not enough to say "for retirement" or "for college." Sure, it's easy to say this when the goal is far off, but there's a deeper answer here.
For example, I'm saving for a house — not because I want to get into the real estate market, but because I want to provide for my family.
If you're saving to start your own business, chances are you're not doing it for the money — you're doing it for the challenge and the freedom to work for yourself.
The next time you put some money into your savings account or you decide not to make that big, unnecessary purchase, think about what you're really saving for.
Money is not the be all end all. Money is the fuel on the road to get to the be all end all.
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5 Easy Ways to Cut Your Living Expenses
Most financial advice says that, when you're saving, you should look to cut out your extra expenses: the latte factor, eating out every night, and services you pay for but don't use (like the gym).
It's true: you absolutely should.
But at some point, you're going to cut out everything you don't use. Where do you go from there?
In reality, we spend a lot of money just living: paying for a mortgage/rent, running water, electricity, heat, air conditioning and more.
They're all crucial to living a comfortable life and they all cost money. Here are 5 easy ways to cut your living expenses.
- Turn Stuff Off When You're Not Using It
Right now, I've got the TV on in the other room and no one is watching it. That's a complete waste of electricity. I'm going to go turn it off. Okay, I turned it off. If you don't like turning everything off all the time, consider timers for your lights and setting your computer to hibernate after 20 minutes. - Take Shorter Showers
It may sound like a PSA for when a drought has hit, but do you really need to take such long showers? Again, I'm guilty of this, too — especially when I need to wake up in the morning — but I've found that a good cup of coffee can make up for a shorter shower. - Use Real Plates and Utensils
Paper plates and plastic utensils are super convenient, but they're one-time use items (unless you wash them, which I've known people to do). If you've got real dishware and utensils, use them. - Open Your Windows to Cool Down
Fresh air is so much better than air conditioning, isn't it? It's also a lot cheaper. Use nature's AC the next time your house is hot and you need to cool down. - Plan Your Meals Out in Advance
We find we have the most success in deciding what to buy at the supermarket when we know what we're going to be eating in advance. Just like going to the supermarket hungry is a bad idea, going without knowing what you're buying is a bad idea. If you decide in advance what you're going to be eating, you'll buy exactly what you need.
What easy things are you doing to cut your living expenses?
- Turn Stuff Off When You're Not Using It
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When You're Saving Aggressively, It's Easy to Forget How Well You're Doing
We've got some pretty aggressive savings goals for the near-term future, mostly centered around buying a house while still contributing a lot to my 401(k) and to both of our Roth IRAs.
And we're doing a really successful job, too; we've got automatic transfers going into our housing fund every month (in addition to automatic Roth IRA contributions), we track our spending and live within our means.
But when you have such aggressive savings goals, sometimes your mentality overpowers reality.
I forget sometimes that we are doing a great job saving for a house and for retirement (and have an emergency fund, too). I want to save as much as we can — I think I am going put nearly my entire 2007 bonus toward the housing fund — and succeed.
But there's a line between being a smart and aggressive saver and just being cheap. I try hard not to cross that line — having money is not the goal. Creating a happy life for my family is the goal. Money is just the means to the end.
The next time you think you're being cheap, step back. Think about how well you're doing on your savings goal and how much the situation is going to affect your bottom line.
This isn't an excuse to go out and buy whatever you want; it's a reality check to determine if you're saving for the right reasons.
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HSBC Online Savings Account Drops to 3.80% APY
HSBC has dropped the rate of its online savings account again, in response to the Fed's rate cuts of the past few weeks.
HSBC's online savings account is at 3.80% as of Tuesday, down from 4.25%. That's a pretty big cut — moving beneath 4.00% for the first time in a while.
With chances for more rate cuts this week, don't be surprised if your accounts continue to fall.
HSBC Direct will continue to evaluate and respond to market changes so we can provide you with competitive rates. And if your rate changes, whether up or down, we are committed to always letting you know.
HSBC's online payment account is currently at a 2.50% APY, with online CDs up to 2.85%.
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Fed Cuts Rates, APYs Drop Again
Not surprisingly, after the Fed cut interest rates in an emergency session, a number of online savings accounts have dropped their APYs.
Among the notables:
- ING Direct: Orange savings account down to 3.65% APY, Electric Orange down to 2.50% ($0-49,999.99), 4.00% ($50,000-$99,999.99) and 4.25% ($100,000 or more)
- WTDirect Savings Account: 4.30% APY
- HSBC Direct: 4.25%
To find out if your account fell and to see which bank is winning the savings account war, check out BankRate's roundup.
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Digg Tackles 401(k)s: Why The Dow Drop Doesn't Matter
While the mainstream media is all over the place with news of the stock market's big drop Thursday, the community at social news site Digg isn't worried.
Check out some of the right-on-the-money comments from this story: Have any money in a 401(k)? You just lost a huge chunk.
cause letting it sit under my matress is so much better. It can take a dunk considering its been steady going up for the last five years.
The market will come back eventually. Now is actually the perfect time to BUY! Buy cheap sell high, and live below your means, you will retire well.
the title has nothing to do with the article. the whole point of a 401k is longterm investment for your retirement. one crappy period in the span of the 40 years until you retire really isn't worth losing any sleep over
These comments are encouraging, especially when the mainstream media is so focused on the stock market's fall.
Now, one could argue that Digg users tend to be younger than most mainstream media consumers, therefore have a longer time to go before they retire.
But it's really good to see smart personal finance fundamentals spread.
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Are You a Rate Chaser? Vote Now.
With the continued drop in rates for online savings accounts, I'm sure a lot of people have considered moving their money around.
But if you've moved your money around a lot recently, you might be a rate chaser.
So, we want to know: are you a rate chaser?
Do you go after the promotional deals? Open up new accounts for .05% higher APY? Move your money around every 3 weeks?
Are you a rate chaser? Let us know in a comment.
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Would You Rather Have Money or Prestige?
What's more important to you: money or prestige?
Michael Shermer, author of "The Mind of the Market: Compassionate Apes, Competitive Humans, and Lessons from Evolutionary Economics," has an interesting article in the LA Times about people and their money desires.
Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same.
Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?
It doesn't make much sense. But emotion has a lot to do with money, and when it comes to investing — especially when it comes to investing — you shouldn't let emotion overtake you.
Even though I have money in the stock market, I don't follow it every day. How can you, with all of the ups and downs?
Getting too involved emotionally causes you to make irrational decisions. Irrational decisions cost you money.
Now, don't get me wrong — money isn't everything. There are a lot more important things in life, like health, friends and family.
But if you want to maximize your investments and daily money decisions, step away from your emotion. Even if it doesn't sound easy, try and make rational decisions.
Take a few minutes to ponder what would happen if you made that financial decision you're considering. I really want Rock Band for the PlayStation 3, but I know there's a lot better things my money could be doing.
If you find yourself about to make an important financial decision based on your emotion, stop. Consider how important it really is. Think beyond the immediate results and consider how it will affect you in the long-term.
If you let your financial decisions be made emotionally, chances are you'll be making the wrong ones.
You can make smart decisions, if you let yourself.
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Wanting Rock Band, But Talking Myself Out of It
I want Rock Band.I really want Rock Band.
But I just can't justify buying it.
I have this whole process mapped out in my head, but I can't take the first step — and I probably won't.
Now that it looks like Blu-ray will win the next-gen DVD format war, I figure it's a safe time to buy a PlayStation 3, which features a built-in BD drive.
Price? $399.
And if I get a PS3, I'll want to get Rock Band.
Price? $169.99.
That's nearly $600 for a new video game system, Blu-ray player, and the hottest game out there. There's no way I can justify spending that.
Just think of all the things I could do with $600 — put it towards a vacation, save for a house, add it to my Roth IRA, pay off some debt … you get the point.
As badly as I want Rock Band, I can't justify spending all the money it takes just to get it.
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