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Money Saving Links: 5/30/08
I just got back from my trip to California (which was awesome!) so I apologize for the lack of posts — we'll be back on track next week.
Money and Values hosted the 153rd Carnival of Personal Finance, which included Automate Your Finances, Feel Comfortable.
Here are a couple of great links from that roundup.
Using the web to save money - Money & Fitness Blog
Using the web to save moneyThere is no doubt in my mind that I have saved hundreds and thousands of dollars by making purchases on websites rather than in Best Buy, Target, or any number of stores. I have used a number of different websites that have helped me over time and I thought it would be a good article to write about for those money savers out there.
To Stimulate Or Not To Stimulate? - The Happy Rock
So it looks like there is potential for the stimulus checks to infuse economy with a little money, but there is plenty of debt as to whether our government borrowing money to give to people to spend will do anything to truly stimulate the US economy.
Plan Ahead: 6 Steps to Secure Your Financial Future - My Dollar Plan
Ever since I can remember I’ve been a planner. Planning ahead has allowed us many rewards that we otherwise wouldn’t have gotten the opportunity for.
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What Are Your Favorite Personal Finance Books?
Open thread: what are your favorite personal finance books?
I'll start it off. Two of mine are:
The Bogleheads' Guide to Investing got me started on the path to index investing, helping me realize that there is no way to long-term successfully beat the market. It preaches paying low fees and going along for the ride, rather than trying to actively outperform benchmarks.
The Automatic Millionaire taught me about paying yourself first and automating savings and investing. When you're automatically socking money away, you're increasing your net worth without even thinking about it.
Share your thoughts. What are your favorite personal finance books?
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How Lower Retail Prices Depress Buying Power
Retail trade has an average monthly employment of nearly 15.5 million. While it is not the biggest part of America's economy (government is bigger and health care is almost as big and gaining fast), it is the percentage of America's jobs that makes retail different from other sectors.
In 2007, retail trade had 11¼% of wage and salaried jobs in the United States. It was also 11¼% in 1975. Back in the late 1940s, it was 10¼ to 10½%, but the percentage slowly crept up to 11% in the 1970s and briefly reached 12% in the late 1980s before beginning an 18-year decline to 11¼% today.
Using computer technology in trade, especially for barcodes and inventory management, increases labor productivity. Retail and wholesale sales volumes per work hour are up and sometimes at rates comparable to productivity in manufacturing.
Higher productivity means potential savings as lower costs and competition pressures retailers to lower prices, but the savings limits job growth and decreases the retail share of jobs.
Employment data by state or metropolitan area tells the same story. The percent of retail jobs by state cluster tightly around the 11.25% average and the percent variation above and below that total is usually less than a percent.
Because retail jobs remain at roughly the same percentage of total employment, the only way to have more retailing jobs is to have a bigger population to serve. For anyone in local government or a chamber of commerce who wants to boast local employment by luring in a big national retailer, the plan will not work.
Before much time goes by, the new retailer displaces existing retailers and jobs fall back to 11 or 12 percent.
The matter of displacement is controversial because the retailer Wal-Mart has the reputation of charging low prices but paying the lowest wages in the retailing industry. When a large retailer such as Wal-Mart enters a new market in a new location, there will be potential savings for consumers from lower prices if Wal-Mart really has lower prices.
However, if Wal-Mart really does pay lower wages, then lower wages without new jobs depresses local buying power, which will depress all of the local economy.
While it may appear that lower prices are savings for many, lower paying jobs have secondary effects that spread throughout the area. Savings are more complicated than lower prices. Savings over time depends on prices and wages.
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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Money Saving Links: 5/16/08
This week's Carnival of Personal Finance is up at Money Under 30, which includes my meme-starter What Would You Do For $1 Million?
A couple of the highlights from the carnival:
Using Google Apps to Track Spending and Budget - Don't Feed the Alligators
My wife and I are big fans of Google Apps, a suite of office type applications that run in a web browser and provide such services as Calendar, Spreadsheet, Document, RSS Reader, Email, and more …
Another great use for a Google spreadsheet is a budget. I can view and reorganize our monthly budget from anywhere. At the end of the month, I simply copy last month’s budget to a new sheet, and then make some minor modifications, if necessary, to prepare the spending plan for the coming month.
How To Deal With the Demise of ‘Floating Check’ Times - American Consumer News
While it is no longer safe to rely on floating time, there are some ways you can help protect yourself and still pay your bills on time while living check to check.
Direct Deposit Your Paycheck
Write Yourself a Check
Bank Online
Request New Payment Dates
Use Email AlertsBest Online Discount Brokers - Blueprint for Financial Prosperity
I started with all the Premium and Discount brokers from Smart Money 2007 Brokerage Ratings page and then removed anyone with commissions greater than $10. That left me with E*Trade, Banc of America, TD Ameritrade, WellsTrade, Scottrade, Firstrade, WallStreet*E, SogoInvest, TradeKing and then I added Zecco, simply because they offer $0 trades, and Sharebuilder, because they offer a unique discount purchasing program. I removed Banc of America, WellsTrade, and TD Ameritrade because they’re affiliated with larger banks, I wanted standalone brokers.
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A Radical Idea: Crowdsource Your Finances
Can the wisdom of the crowds decide how to manage you finances better than you can? I'd love to find out.
Imagine a person who left all of their financial decisions up to "the crowd." From budgeting to investing to spending, their entire financial situation was determined by others.
A number of social finance sites, like Wesabe, have popped up. But they're more about comparing your spending to other people.
What would happen? Could the crowd successfully manage someone's finances?
This would be something really compelling to follow — whether it's a blog or a podcast or whatever. And it's my gift to you — absolutely free to use.
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Bank of America's 3 Steps to Green Banking Online
We've talked a lot about how convenient online banking is, but there's also a very green aspect to it, too. Being green isn't my top priority, but it's definitely an added bonus when it comes along with convenience.
While it may or may not actually save 17 million trees, Bank of America is pushing a "Think Green, Bank Green" message to get its customers into online banking.
Online Statements Getting your monthly statements online keeps you organized and cuts clutter
Bill Pay Scheduling bill payments online saves you time, postage, potential late fees, and more.
eBills Paying bills online? Why not go for ultimate convenience and receives them online, too.According to the promo, BofA customers using the three steps have saved a total of 8,174 tons of paper.
Like I said, going green isn't the reason I would be banking online, but it's a very compelling reason for certain folks.
It's a smart move by Bank of America to shape their message this way, especially if their customers are hesitant to bank online.
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Automate Your Finances, Feel Comfortable
One of the biggest reasons you should put your finances on autopilot is for the sheer comfort of it.
Literally.
When your bills are getting paid automatically, your savings is being fed without you touching it, and your paycheck is going straight into your checking account, you don't have to worry about them. It's the biggest weight off of your shoulders.
You don't need to find the time to head to the ATM. You automatically pay yourself first. You don't have to worry about the post office losing your check in the mail.
The only bill I still pay by check is my credit card, and every other day I forget exactly when it's due and, therefore, when I need to send it in. It's weighing down on me.
So much about money management is mental. Am I saving enough? Should I save for the long run or the short run? Do I really need that thing I want?
The less you have to worry about, the better off you are. Don't let your finances overwhelm you.
Automate today and feel more comfortable.
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Is Chrysler's $2.99 Gas Worth It?
Have you seen Chrysler's ads for 3 years of $2.99 gas when you purchase a new car?
Autoblog has the details:
With gas prices rapidly approaching and exceeding $4 a gallon across the nation, Chrysler is offering up a deal that just might make people who are averse to the looks of cars like the Chrysler Sebring and Jeep Compass think twice. Between now and June 2, anyone who buys any new Chrysler, Dodge or Jeep vehicle will be able to register for a "Let's Refuel America" card. Once the customer registers a credit card with the program, they will receive a new card that they can then use at participating gas stations to fuel up their new car or truck. When the card is used, the credit card that the owner has on file will be billed $2.99 a gallon for either regular gas, E85 or diesel fuel. Chrysler will pay the difference. The best part is the price is locked in for THREE years.
Obviously, this isn't as good as it sounds. Nothing in life is free — everything has a catch. Especially something has "too-good-to-be-true" as this.
Freakonomics weighed in, saying it's a brilliant move by Chrysler because consumers overreact to the price of gas.
I believe consumers systematically exaggerate the importance of gas prices to their budgets. The typical American just doesn’t spend that much money on gas.
The way we buy gas — every week or two, with the prices staring us in the face as we stand at the pump — makes price fluctuations far more visible than for other goods. Someone who signs up for this program will think about Chrysler and how they are paying part of the cost of the gas every time they fill up. I suspect that will increase the brand loyalty of people on the program.
I don't know about you, but I wouldn't be persuaded by this offer. Maybe I'm in a different boat than you, because I work at home and only have one car (that gets great gas mileage).
Would you buy a Chrysler to get $2.99 gas for the next 3 years?
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WTDirect Drops Savings Account to 3.16% APY
WTDirect's Savings Account has fallen from a 3.31% APY to a 3.16% APY.
Despite the drop, they're still in the top 10 of online savings accounts, according to Bankrate.
While rate drops have been the norm since the Fed started cutting interest rates, E-Trade upped their online savings account APY last week. Looks like the trend may not continue.
Minimum balance to get into WTDirect is $10,000, so it's not for savers starting out. But once you open it, there's no minimum to avoid fees.
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Real Savers Don't Gamble
Real savers do not gamble.
Now I'm not talking about a bet in your football pool at the office or a game of cards with friends on Saturday night — that's fun and entertainment. I'm talking about repeated bets in commercial casinos or state lotteries. Gamblers gamble by placing bets day after day, or month after month.
There is a reason why. Suppose you bet a dollar on the flip of a coin. For a head you win a dollar, for a tail you lose your dollar. You probably recognize that bet as fair; your chance of winning a dollar just equals your chance of losing a dollar.
But suppose you play the game day after day after day. Each day your chance is the same, but after 100 days you might win 56 out of a 100 to be $6 up. After another 100 days, you might win 47 and be up only $3.00.
Keep playing and the laws of large numbers take over. Play the game 10,000 times and you can only expect to win $5,000 but lose $5,000. Play the game long enough and in the parlance of chance, your expected return will be zero: nothing.
Real savers will not be happy earning nothing.
What is true for a private game of coin flipping is also true for all fair bets. Parties to a fair bet will earn nothing unless one of them stops soon after they have a stretch of good luck.
Now we all know the state lotteries and commercial gambling casinos are earning money. State lotteries and casinos earn money because they are allowed to tilt the odds in their favor and the laws of large numbers take over to earn them a return.
The state legislatures have gambling commissions to make sure the casinos and lottery boards do not get carried away and stack the game too much.
Maybe you've heard the phrase "Real women do not pump gas," or "Real men do not eat quiche." Well, "Real savers do not gamble."
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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