Single Guy Money

Free $50 and a Debit Card That Earns Rewards?

2009-11-20T05:30:00.002-05:00

I'm all about free money. These days, it's hard to find accounts that are paying bonuses for opening an account. I found out the other day about PerkStreet Financial.

They offer a free FDIC insured online checking account that gives you a number of perks for having the account AND now, until December 31, 2009, you can also get a $50 bonus for opening an account.

While this account may not be best for everyone, if you need or would like a separate free checking account, this one can be perfect. Opening an account is quick and easy. It took me about 3 minutes to get it setup. You will need your drivers license and a debit card, credit card or check from your current bank and at least a $25 opening deposit.

From the website, here are a some of the FAQ's:

What are the benefits of having an account? By using your debit card without a pin, you can earn free coffee, music or 1% cash back.

What are the perks?

1% cash back: Choose from a PerkStreet Financial Visa^® Gift Card or gift cards from Target^®, Best Buy^®, Amazon.com^®, GAP and Ticketmaster^®
Music: Choose to receive credit for songs at iTunes^®, Rhapsody^® or Amazon.com^® Gift Cards for MP3s or millions of other items at Amazon.com
Coffee: Choose reloadable gift cards from Starbucks^®, Dunkin Donuts^®, Peet’s Coffee and Tea^® and Bruegger’s Bagels^®

How much does it cost? The account is absolutely free. There are no account minimums, maintenance fees or charges for using your debit card.

How can PerkStreet offer so many perks? By having no branches, they don't have to spend billions of dollars to open and maintain branches. They use the savings to offer perks to customers.

How do I make a deposit? You can add money to your account by direct deposit, transfer money from an existing checking or savings account, make free deposits at any UPS or Mailboxes, Etc store and PerkStreet will receive your deposit the next day. You can also mail in deposits.

How do I withdraw money from my account? You can withdraw money for free at over 37,000 STARsf surcharge free ATM network or at any merchant that offers cash back for purchases. You can use ATMs outside the network for a $2 fee.

Is your money safe? Yes. Every PerkStreet account is FDIC insured up to $250,000 and all PerkStreet Financial Visa Debit Cards are protected by The Visa Zero Liability policy. This policy ensures that you won’t be held responsible for any unauthorized transactions.

The account is just like a regular checking account since you can pay bills online, check your balance online or by phone and receive text balance alerts via email or mobile phone. You can also get help via phone anytime of the day and most calls are answered within 30 seconds.

I think the account is pretty cool so I signed up to be an affiliate. I freatly appreciate it if you use any of the above links on this page to open an account. The holidays are coming and I can really use the extra money. :-)

High Yield Checking Accounts vs. Reward Credit Cards

2009-11-16T06:30:00.040-05:00

This is a guest post from Joel J Ohman, a certified financial planner and president of Credit Card Chaser.

If you are in the enviable position of many who have their high interest consumer debt paid off and firmly in control then you have likely reached a point in your financial life where you are maybe in somewhat of a befuddled mindset about how to best make the transition from solely working for your money to putting your hard earned money to work for you as your servant with you being it's master rather than vice versa.

This transition of how to best deploy your hard earned cash is a great place to be because now you are no longer in the "pay off high interest debt as quickly as possible" stage but rather you are about to enter the stage of "Wow, I had always hated watching interest rates climb when I had a balance on my credit cards but now I love high interest rates because it just means that my interest earning bank account balance is going up even faster!"

Granted, this was a rather broad introduction but I think it is appropriate because I think two of the very best ways to jump feet first into the "making money work for you" stage is by using a combination of a high yield checking account (sometimes called a rewards checking account) and a rewards credit card.

Definitions

First, lets make sure that we are on the same page and define what exactly a high yield checking account and a rewards credit card is:

High Yield Checking Account - This is a checking account that earns an above average rate of interest (often significantly higher than the average) and is typically found at regional banks, online banks, and local credit unions.

Rewards Credit Card - This is a credit card that allows card holders to receive special perks for every time they use the card. These specials perks can be in the form of cash back (my personal favorite), points, frequent flyer miles, free hotel stays, free dining, free travel, etc.

Pros and Cons

High Yield Checking Account Pros

Interest rates can be astonishingly high (the highest rate that I was able to find from the chart linked to above was 6.01% APY with the average yield for all 483 high yield checking accounts surveyed being 3.74% APY). Compare those rates with the rates that you would get (if you can find a personal checking account that earns interest at all in the first place) on a regular checking account at Bank of American or Wells Fargo or any one of a number of national banks and you will quickly see that even the average high yield checking account's interest rate will quickly send the checking accounts from the big bad national banks crying home to momma.
Debit card access. It is rare to see any type of checking account without debit card access be it a regular checking account or a high yield checking account. Many high yield checking accounts have the same Visa or MasterCard backed debit cards as their regular checking account counterparts.

High Yield Checking Account Cons

While of course each high yield checking account is different and there are many different requirements from one bank to another here are some of the downsides to using a high yield checking account:

Balance caps. Every single one of the 483 high yield checking accounts on the list that I searched through had a balance cap of anywhere from $25,000 to $100,000 with the average balance cap being $34,451. What this means is that you can certainly keep more than the balance cap in the account but the maximum base that they will pay out interest on is limited to the balance cap number.
Number of debit card transactions. Most high yield checking accounts institute a requirement that you use your debit card a minimum number of times every month or else the interest rate will decrease to close to nothing. Usually the minimum is set at 10 transactions every month.
Maximum deposit levels. Another restriction that some banks and credit unions impose on high yield checking accounts is that they set a maximum deposit amount that will be able to earn interest. This means that if the maximum deposit amount is $5,000 and you deposit $10,000 then at best only $5,000 of your deposit will earn interest and at worst none of your deposit will earn interest because it exceeded the preordained maximum deposit amount. The exact implementation of this requirement, if at all, will of course depend upon the specific bank of credit union.
Various bank fees. I almost didn't even add this bullet point because it seemed like a no brainer. Understanding that there are many potential bank fees is a no brainer but I think it's important to just mention this quickly because we all need to be reminded about how quickly those bank fees could potentially eat into our interest if we aren't careful. Whatever you do make sure that you don't throw your money away on bank fees.

Reward Credit Card Pros

You likely already know many of the benefits to using a reward credit card but here are a few quick things to remember:

Cash back. You really can't help but love cash back. As long as you use your cash back credit card properly and make sure to pay off the balance in full every month then if your card gets 1% to 3% cash back on every purchase then you are essentially only having to pay 97% to 99% of full price for everything you buy. This is like your own little plastic coupon that guarantees that you will never have to pay full price for anything no matter where you buy it (unless they don't accept credit cards for payment of course).
Additional rewards. Even though my personal favorite is cash back (I use the American Express TrueEarnings Costco Card) there are many different rewards cards that offer anything from free flights to free hotel stays.
Purchase protection. Just like any other credit card if you make your purchases with a credit card you have a level of protection that you just don't have with cash or checks (although many Visa or MasterCard backed debit cards offer just as much protection as a credit card so this is not really that much of a distinguishing feature for most rewards credit cards vs. high yield checking account comparisons).

Reward Credit Card Cons

There are certainly some cons to using a rewards credit card:

Potential for mismanagement. If you carry a balance on your rewards credit card for even one month then you can potentially wipe out an entire years worth of cash back savings. If you think that you might feel at all tempted to just run up a bunch of purchases on your card without having the money in the bank to pay the balance off in full every month then you should seriously consider either scheduling your credit card payments to be made automatically from your checking account to your card and for the bill scheduler to be set to automatically pay off the balance in full every month (which will force you to spend responsibly) or if that still doesn't work then you should reconsider using a rewards credit card in the first place until you can get a firm grasp on managing credit responsibly.
Fine print. This is true of a high yield checking account just like it is true of a rewards credit card because you can see from the above high yield checking account cons that there are quite a few hoops that one has to jump through to earn the high interest rate for the checking account but I think it is important to point out on the credit card side of things because it seems that many people tend to gloss over the details for their credit card. Wander blindly into a new credit card application at your own peril. Take a few minutes and really compare credit cards in depth to make sure that you understand the features and the fine print.

What Should You Choose?

So should you choose a high yield checking account or a rewards credit card? I don't know your specific situation and so of course I have no idea of what strategy is best for you but I do know that many people can put their money to good use and their spending to good use by using a combination of the two. I am a firm believer in putting ones money to work for them rather than going into debt and serving money. When you have paid off any existing high interest consumer debt then consider crafting a strategy that involves using both a rewards credit card and a high yield checking account to propel you towards your financial goals.

What do you think?

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Accelerating Your Mortgage Payoff = Debt Free Euphoria

2009-11-11T07:00:00.016-05:00

Being debt free can be a euphoric feeling that brings on a freer, less complicated lifestyle. Being debt free can be very difficult to achieve completely, especially in this credit heavy world we live in. You want it? You got it-just sign here. Look around your home at all the things you have purchased over the past three years. Flat panel TV, new smart phone, lots of shoes (lots), shiny car and a few sunny weekends in Bermuda. Wow, I bet you really did not need all that stuff and probably now think of some (most) of it as cluttering up your home. Now, look at your home……

Part of being debt free is owing zero on your home. A lot of people never think they will be able to and should pay off their mortgage early, but they can.

There are two schools of thought on having no mortgage:
A. Some people believe that you need to have some debt, have some leverage on the equity of your home and need an income tax write-off from somewhere.
B. Other people believe that it is best to have the lowest possible overhead for your day-to-day living. This means that if you lost your job tomorrow, you would be able to manage living with very little overhead. Hopefully there is a 6-12 month cushion in the bank account to do this. I am of the second school of living completely debt free including your home.

I am not saying you should buy a house for cash or play the horses and pay it off with the winnings. I am saying that you should include your home in your total assets and include the mortgage in your total liability and payment in your monthly expenses. Paying off a mortgage can be achieved in the same vain as paying off your credit card debt. Just pay a little more each month.

From your first monthly payment due on your mortgage, you can begin accelerating the mortgage payoff. By simply making the equivalent of one extra payment of principle and interest each year, you can knock a 30 year mortgage down to 24 years and four months. This is the same as reducing the interest paid over the 30 year period by a 1/3. Saving a third of your total interest is the same as lowering your effective interest rate by 2%!! So, by paying a little extra each month, you knock off so much interest it might not even pay to refinance. (For those math majors and picky-Annies out there, these numbers are approximated.)

There are a few ways you can do this:

Divide the monthly principle and interest payment by 12 and add this to each monthly payment
Make a full principle and interest payment once each year the same time (birthday, July 4th, etc)
Make 26 half payments every two weeks

Any of these methods will achieve the same result; make one extra payment a year and knock almost 6 years off the loan. I do not recommend signing up for the bi-weekly or bi-monthly or mortgage accelerating programs offered by your lender or third party servicers. There is usually a fee for this, you lose control of the payments if you need to change something and you can do it yourself just as easily. Part of being debt free is created your own model and having complete control over it!

Here is an example:

Anne has a 30 year fixed mortgage for $300,000. The interest rate is 6%. If she pays it off per the terms of the loan, she will have a monthly payment of $1,798 and will pay $347,515.44 total interest over the entire life of the loan! If she simply pays $1,800 dollars extra each year (using any of the 3 methods above) she will pay the loan off in 24 ½ years, with a total lifetime interest of $273,870.

Anne will save a whopping $73,644 on interest. By simply finding an additional $1,800 a year; she can save 40 x that in interest. I say, that is a lot of shoes!! Why would someone not want to do that?

So, you see how easy it can be to have your mortgage into the big picture and include it in your plan of being debt free. This is great when you go to sell the home, lose part of your household income or want to retire early. It might not be good for people who are definitely selling their home within 5 years, never plan on moving or just don’t care about mortgage debt. I always suggest calling the lender and asking them the best way to calculate the accelerated payments and how should you make them. Again, shy away from their offer to put you in a bi-weekly service plan. You can follow the reduction of principle on-line with the lender and trust me this feels good!

This is a guest post from Dale Robyn Siegel; a licensed attorney in New York and owner of Circle Mortgage Group, a boutique mortgage broker in White Plains, New York. She is an adjunct professor at Baruch College as well as NYU Schack Institute of Real Estate. Dale has been speaking to the public and teaching real estate professionals about mortgage finance for the past ten years. You can learn more about The New Rules for Mortgages at http://www.thenewrulesformortgages.com, and you can purchase a copy here: http://www.amazon.com/Rules-Mortgages-Dale-Robyn-Siegel/dp/1592579485 To learn more about this virtual book tour, please visit http://virtualblogtour.blogspot.com/2009/09/new-rules-for-mortgages-by-dale-robyn.html

How Long Will It Take You To Pay Off That Debt?

2009-11-09T06:20:00.000-05:00

Have you ever sat down and completing the daunting task of calculating how much debt you owe? Taking it a step further, have you calculated how long it will take you to get out of debt.

There are numerous financial calculators on the internet that will help make this task a little bit easier. Of course, they won't pay off the debt for you, but they can give you an idea of how long it will take you to get rid of the financial burden called "debt".

If you aren't sure what is considered debt, if can be defined as any amount of money you owe to a company or even an individual. If you owe anyone money, you are in debt. Granted, a $1000 loan from a family member may not be costing you as much as a $1000 credit card balance. Now is the time to figure out the best way and most cost effective way to eliminate the debt.

Consider this, if you have a $5,000 credit card balance with a 18.9% interest rate and only make the 4% minimum payment, it will take you 12 years to payoff the balance and cost you over $3,000 in interest.(click the image to see it full size).

If you are able to find some extra money to throw at your debt and make double the minimum payment, you can have the balance paid off in 5 years and 9 months and it will cost you a little over $1200 in interest.

Just by making double the minimum payment, you can get out of debt alot sooner and pay alot less in interest.

You didn't get into debt overnight (hopefully) and you won't get out of debt overnight; unless you are lucky enough to win the lottery or come into money some other way. There is no ancient chinese secret to getting out of debt, but it does take patience and determination.

Follow these tips and you can get rid of your debt:

Don't take on any new debt!!
Minimize the amount of interest you pay each month so that more money goes towards the principal. If you have good credit, consider applying for a balance transfer with a credit card with a 0% interest rate so any money you pay towards your debt goes toward principal only.
Pay as much as you can comfortably afford each month toward the debt. Small amounts help tremendously.
Find sources of additional income and minimize expenses - second job, selling items on Ebay, garage sales, online surveys, using coupons, etc.

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Visit Dinkytown for a wide variety of financial calculators.

Involving your Family in Financial Planning and Saving for the Future

2009-11-05T09:00:00.003-05:00

The following guest post was contributed by Christine Howell who frequently writes about Accredited Online Degrees and college related topics for Online College Guru, an online college directory and comparison website.

Even before you get married and start a family, it’s not too early to start a savings plan and stick to it. For those who already have a family, it’s essential to get them involved in your savings plan and invested, so to speak, in the financial process. Financial literacy is a hot topic of late, and for good reason; a clear understanding of how finances work is an essential life skill and provides a sound basis for future financial decisions.

One good first step toward involving your family in your savings plan is to enlist them in working toward a manageable short-term goal. Start small; a video game system, a trip to a local amusement park, or a weekend trip to a nearby tourist attraction can be suitable incentives for saving. It’s essential that the goal be something everyone in the family can look forward to and enjoy.

Once you’ve established the goal, it’s time to discuss ways of cutting back on spending in order to save money for the desired reward. Eating in rather than dining at an expensive restaurant, delaying purchase of a new t-shirt or a video game, and cutting back on costly snacks and extras may seem like small steps, but taken in aggregate these expenditures can mount up. By eliminating just a few of the luxuries you and your family take for granted, you can realize enough savings to achieve your goal quickly. As soon as you’ve saved enough money, carry through with your plan. Enjoying the reward is an essential part of teaching your family the value of saving for a goal.

Assign your children specific jobs and pay them for performing them rather than simply giving them an allowance or, worse yet, handing out money when they ask for it. Requiring your children to earn their money will create a twofold benefit; first, it will instill a work ethic that will serve them well in later life, and second, they will better understand the value of money as related to work. Encouraging children to save toward items they want can be an effective method of teaching the value of savings and promoting a lifelong habit of financial responsibility.

Another method for inspiring your family to participate in your savings plan is to initiate a profit-sharing plan. Large companies use this method with good results; the same incentives will work in your own home. By sharing a small portion of the savings realized through cutting back on luxuries and practicing financial responsibility, you can motivate your family to participate in the savings plan and create a fiscally sensible environment.

Finally, eliminate the secrecy that many families practice regarding income and financial decisions. Parents should make it clear that household finances are not to be discussed outside the family, but within the home, financial decisions should be arrived at openly and with input from all members of the family. By demonstrating good financial decisions, you can instill younger family members with an understanding of the elements of finance. This can plant the seeds for financial responsibility and prudent decision making that will reap benefits for their entire lives.

This guest article was contributed by Christine Howell who frequently writes about online degrees and college related topics for Online College Guru, a directory of accredited online colleges.

Image Courtesy: theritters, stevendepolo, lululemon

10 Tips For Controlling Your Credit Debt

2009-11-03T06:40:00.001-05:00

There are several ways that you can control your credit debt. Having a huge debt hanging over your head is never a good thing. Debt creates stress and anxiety for everyone. The ultimate goal should be to get rid of the debt so you can move forward with your life.

Given below are the 10 best tips for controlling credit debt:

1. Create a budget - If you are going to continue using your credit cards, then it is best to minimize spending, or at least stop purchasing things you do not need altogether. Forget about the fancy clothes and other big purchases.

2. Start Paying Off Existing Debts - Come up with a doable payment plan, but be realistic. If you are $10,000 in debt, expect it to take you a couple of years to get out of debt.

3. Use Only One Credit Card - If you are the type who just has to use a credit card, get rid of all of them except for one. That way, you are still allowing yourself the luxury of spending, just not as much.

4. Seek Debt Counseling - Because it can be so difficult to pay off debts, many people find it necessary to seek debt counseling. They usually charge a small fee, but help you to get out of debt rather quickly.

5. Get a Debt Consolidation Loan - Again, this is another option that may or may not be a good idea, but if you are in a substantial amount of debt, it will definitely help out. You can usually pay off your credit debt and save 40-60% on your overall expenses.

6. Find a Way to Make Some Extra Money - The more money you have, the more you can spend, so you may not have to alter your current lifestyle as much as you think. Getting a part-time or weekend job to devote solely to paying off your debt is a great way to get everything back under control.

7. Stop Putting It Off - Everyone has the tendency to want to "wait till next month" to start paying off their debts. Even if you don't make a lot of money, you can still start by paying as little as $5.00 at a time! Every little bit counts, so get started now.

8. Stop Living So Frivolously - Other than cutting back on what you do not need, you should also cut back on the things you do need. Instead of going out to eat twice a week, go once every two weeks. Keep the lights turned off when you are not using them and don't travel as much. Over time, you will have a lot more money in your pocket to put toward getting rid of your debt.

9. Believe That You Can - No matter your financial situation or how horribly you are currently in debt, there is a way out. Sometimes getting out of debt is as easy as maintaining a positive attitude. Once you believe there is a way, just like magic, there really is!

10. Imagine Being Free From Debt - This will help you to become motivated to actually put your money toward your credit card bills. Think about what it would be like to not be in debt at all. It can happen, but you have to want it badly enough. The key is to stay focused and not get off track. If you fall off, pick yourself back up and continue.

This is a guest post from Mirsad of Think Credit Cards. Be sure to drop by Think Credit Cards and say hi.

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Should You Consider Last Minute Holiday Traveling?

2009-10-28T07:30:00.000-04:00

Image Courtesy: ToastyKen

This is a guest post from Kathryn Katz with some great tips to help you save money on your holiday travel. See more about Kathryn at the end of this post.

Last year travelers cashed in big when travel industry panicked and lowered prices right before the holiday travel rush. The airlines weren’t prepared for Q4 2008 travel backlash, and lowered prices to entice consumers to make last minute travel plans. However, this year many airlines are grounding more planes and the tide has turned for consumers. Less seats and greater demand are causing airfare rates to rise.

How can you save on holiday airfares?

#1 Stop Procrastinating

Unlike last year the longer you wait, the more you’re going to pay. If it’s in your budget, book now rather than wait for the airfares to get lower; otherwise, you may end up paying more and give up the convenience of traveling when you want to.

#2 Be Flexible

Avoid traveling during the popular Wednesday-to-Sunday trip. Many of the major airlines, such as American Airlines, United Airlines and Delta, are adding a $10 surcharge to those holiday airfares. Instead, consider flying Tuesday to Saturday. According to Bing’s holiday forecast, you can save up to 20% if you’re flexible with your travel plans.

#3 Compare Prices

There are hundreds if not thousands of price comparison travel websites. Some of the popular travel websites include Travelocity, Expedia, Orbitz and Priceline. Bing.com even offers a price comparison between travel websites, such as Hotwire, Expedia and Priceline. Before you buy that ticket at one of these bargain travel sites, make sure to go direct to the airline and see if you can get a better deal. Sometimes dealing direct with the airline can save you money.

#4 Avoid the Up-sell

If you’re booking your airfare online, many travel sites will try to up-sell a travel package. In some cases, booking everything in one place will save you money, but sometimes that convenience will end up costing you more. Break the travel package apart and make sure you’re really getting a deal. Also, check with relatives and see if you can stay with them to avoid the hotel and car rental fees. Sure you’re giving up a little independence, but it can make the whole trip a lot less expensive.

#5 Travel Light

Most major airlines charge baggage fees to travelers that are checking in bags, and limit the size and weight of the carry-on bag. Check with your airline ahead of time to find out their specific rules and alter your packing plans accordingly. Some airlines will offer reduced fees if you pre-pay for bags on their website. If you’re bringing gifts to the family, limit it to what will fit in your bag or use gift certificates.

If you can’t take advantage of the prices now and have to wait to buy your tickets, setup a Fare Alert so you can keep track of airline fares for your destination on a daily basis. You might get lucky and find a last minute deal.

About Kathryn Katz

Kathryn Katz is an avid cat lover, single mom, internet marketer and professional copywriter. Kathryn is a Certified Personal Finance Counselor and works for Consolidated Credit Counseling Services.

Don't Throw Your Money Away On Bank Fees

2009-10-26T06:30:00.002-04:00

Image Courtesy: CarbonNYC

Banks around the country are continuing to bleed red ink due to the foreclosure crisis and the weak economy. As such, they are looking for any possible way to make up for the lost revenue. I don’t know about you but I don’t have any extra money to give away to the banks. In this economy, it is important to watch and hold on to every penny.

Here are some fees you can avoid:

Bank Fees. There are way too many free accounts out there. If you don't know if you are being charged for your account, be sure to check your bank statement. If you like the bank you are currently with, check and see if you can switch to a different type of account that does not charge fees. If your employer offers direct deposit, many banks will waive the monthly service charge on your account.

ATM Fees. Fees for using another banks ATM can run as high as $3 and then you may be charged again by your bank for using another banks ATM. If your bank does not have many ATM's, consider switching to a bank that will refund ATM fees. My current checking account is with a small community bank that only has 2 branches. I like the account because they pay 4% on checking balances up to $50,000. They compensate for their lack of ATM's by reimbursing fees for using another banks ATM up to $20. Another way to avoid an ATM fee is to use your debit card at a grocery store or stores like Wal-Mart and Target and get cash back.

Overdraft Charges. Here's another charge you can easily avoid. I won't say that I am perfect and have never made a mistake. I too have made a mistake in my balance and bounced a check or two in my lifetime. The important thing is to make sure it doesn't happen all the time. Keep your account in balance and don't try to "float" checks. If you don't have the money, you don't have the money. It's very simple; if you have $5 in your checking account, don't write a $10 check hoping your paycheck will beat the $10 check to the bank. Checks clear a lot faster these days and that $10 check may just end up costing you $25 - $35 more depending on what your bank charges for overdrafts. Don't rely on the balance you are given at the ATM because there may be items that have not cleared yet.

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RIP Grandpa - Thanks For Teaching Me About Life and Money

2009-10-22T08:30:00.000-04:00

Image Courtesy: BL1961

Today is the 5th anniversary of my grandfather's death. I still miss him a lot but I know he is in a better place.

My grandfather was like a father to me growing up since my father was not around. We lived across the street from my grandparents growing up so I got to see him everyday. He was my hero and my role model.

My grandfather was a hard worker. He worked in construction up into his late 60's; only stopping due to health issues. He was never in a management position and worked for the same company for over 30 years. He was only making about $10 an hour when he retired but he still managed to get the bills paid and save money.

My grandfather taught me that it was important to always set a little something aside for a rainy day. Whenever he would get paid, he would give my grandmother cash to spend on the things she needed and buy groceries. The rest of the money went to the bank for the checking and savings accounts. My grandmother knew that once the spending money she had was gone, that was it until the next paycheck came.

When I was in high school, my grandfather would have me write out the checks for the bills and go to the bank for him. Even though there was not a lot of money, he would make sure he paid everyone he owed. He stressed the importance of keeping your word. Whether it be the gas company or your buddy, if you owed someone money, you made sure you paid them back.If you told someone you were going to do something, you better be sure you did it.

Those early lessons still stick with me today. If I owe someone money, I make sure I pay them; no matter how small the amount. I always make sure I set something aside for a rainy day and if I tell someone I am going to do something, I do it.

What money lessons did you parents teach you?

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Save Money On Your Auto Insurance

2009-10-19T06:30:00.027-04:00

If you own a car, motorcycle or any motorized vehicle, you need insurance to cover those unfortunate accidents that may happen. No matter how careful you are, bad things happen.

Perhaps the driver of the car behind you is a little too busy talking on the cell phone and not really paying attention or you happen to park your car near a tree that falls on your vehicle.

Image Courtesy: glen edelson

Sometimes, you may have a minor fender bender that you can pay for out of pocket or the damages may just be cosmetic and you decide not to repair the damage. One thing you don't want to do is make a bunch of small claims.

Each time you make a claim, there is a possibility of the claim showing up on your motor vehicle report. A motor vehicle report (MVR) is similar to a credit report for your driving history. Just as having a lot of debt can decrease your credit score and cause you to pay higher interest rates, a bad driving record can cause you to pay higher insurance rates.

How can you save money on your auto insurance?

High Deductibles. If you have money set aside to cover unexpected expenses, I recommend maintaining a high deductible. I carry a $1000 deductible on my vehicle. A deductible is the amount of money you are responsible for before the insurance company will start covering the damage. The higher your deductible, the lower your insurance rate will be. Be careful when you choose your deductible! If you can only afford to pay $250 out of pocket, don't choose a $1000 deductible.

Drop Extra Coverage. It may not make sense to carry anything more than basic liability coverage on your vehicle. There are several rules of thumb to determine whether or not you need to carry Collision and/or Comprehensive coverage. If you still have a loan on your vehicle, your lender will require you to carry Collision and Comprehensive coverage until the loan is paid off. If your vehicle is more than 5 years old and/or less than 10 times the amount you pay to insure the vehicle, you probably don't need to carry the extra coverage.

Discounts. Make sure you are taking advantage of all the discounts that are available to you such as: being a safe driver and insuring your car and home with the same company.

Maintain Your Credit. Most insurers will most likely want to check your credit when you apply for a new policy. Maintaining good credit will help you get the best rates.

Shop Around. Shopping for auto insurance may seem about as interesting as going to the dentist. Thanks to the internet, this process is a lot easier and you don't have to contact multiple companies. There are sites such as InsureMe that allow you to put in your information one time and they will submit it to multiple insurance companies for you. I recently used them and it took me less than 10 minutes to enter my information and I received several instant quotes.

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Allstate Insurance - Free Quotes and $100 off your deductible the day you sign up.

21st Century Insurance - New drivers report saving as much as $300 on auto insurance.

Esurance - "Quote, Buy, Print"

How To Get Out of An Upside Down Car Loan

2009-10-12T06:30:00.019-04:00

Image Courtesy: cdaltonrowe

I was looking at my blog stats one day and saw that there were numerous searches from people looking for information on how to "get out of an upside down car loan" and whether or not they "should pay off my car loan".

Unfortunately, I have to say that there is no quick and easy way to do either if you don't have a pile of cash sitting around to do it. When I paid off my car loan, that I was seriously upside down on, I pulled money from my savings account and paid it off eliminating two problems at once. I was no longer upside down and a I no longer had a car payment draining my finances each month. After the car loan was gone, the money I used to send to the finance company started going to rebuild my savings account. Believe me, not having to make a $556 car payment each month is a big relief and now that I am free of a car payment, I never want one again.

How do you get upside down in a car loan?

There are a few main reasons you end up upside down in your car loan. You either financed too much, financed the car too long or you traded in a car with a balance and rolled the old balance into your new loan.

Once you drive off the lot, your brand new car starts to depreciate; no matter what kind of car it is. New cars can depreciate by as much as 40% in the first year. Unfortunately, car values fall much quicker than your loan balance and leave you owing more than the vehicle is worth (negative equity).

Back when I was in my twenties, I used to buy a new car every two years (pardon me while I kick myself in the a**). Each time, I would roll in the negative equity from the previous loan and get further and further in the hole. I finally paid off my loan but I can't even imagine how much money I threw down the tube just to have a new hunk of metal that got me from point "A" to point "B" the exact same way the old one did.

But how do I get rid of my upside down car loan SingleGuy?

My recommendation is to first figure out how much you are upside down. You can do this by going to NADA, Kelley Blue Book, Autotrader, checking your local classifieds or even checking with local dealers to see how much cars like yours are selling for.

One word of caution, when using NADA or Kelley Blue Book, make sure you rate the proper condition of your vehicle. If your vehicle has a huge dent in the quarter panel, do not rate your vehicle as excellent. Once you know how much your vehicle is worth, find out what the payoff on your vehicle is. Once you have those two numbers, subtract the value from your payoff and presto - you now know the ugly truth of how much negative equity you have.

Example: Vehicle Value $10,000 - Loan Payoff Balance $15,000 = $5,000 (negative equity or amount you owe over the value of the vehicle).

Now you know how much you owe over the value of your vehicle, you have a couple of options:

Sell It. If you can do without the vehicle and sell it at a fair price, do it. Some financial experts, such as Dave Ramsey, recommend financing the difference. I can see his way of thinking since I would rather be $5,000 in debt than $15,000 using the above example. I just don't think it will be that easy to go and get an unsecured loan if you have a large balance remaining once you pay off the vehicle. Hint: You usually get more money by selling to a private party vs. a dealership.
Pay it off. If you have extra money remaining each month after all your necessary bills (rent/mortgage, utilities, insurance, savings) are paid, throw that toward the car loan. Once the loan is paid off, you no longer have to worry about negative equity and you can use the car payment you were making to the finance company to build your savings so you can pay cash for your next vehicle.

Now for those of you that want to know if you should pay off your car loan:
I can't answer that without knowing the details of your finances. It may make sense for you to pay off the car loan or it may make sense for you to use the money elsewhere. It all depends on your individual finances.

I can tell everyone though, the best way to avoid a car loan and being upside down is to never finance another vehicle again, never buy new and pay cash if you can. If this is not a possibility, make a large down payment and finance the vehicle for no longer than 3 years. If you can't afford the payment on a 3 year car loan, you probably shouldn't buy the car.

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My Caribbean Vacation Cost Less Than I Thought

2009-10-10T06:30:00.009-04:00

Image Courtesy: Me

I recently spent four nights in San Juan, Puerto Rico and had a great time. An even bigger highlight of the trip was the cost.

I never thought I would be able to afford a nice vacation to the Caribbean. I always thought the cost of a trip like that would run a few thousand dollars and I was just not willing to part with that kind of money.

I found a company online that was offering airfare and hotel deals to the Caribbean. The numbers were unbelievable and it seemed like it may have been a bait and switch deal. I discussed it with my other buddies that were going on the trip and we decided to go for it.

I'm happy to say that everything was excellent and we had no problems at all. We flew directly from Atlanta to San Juan on a direct flight via Airtran. Once we got to San Juan, our hotel reservation was at The Ritz Carlton - San Juan.

How much did we pay per person for a round-trip flight and 4 nights at the Ritz? How about an amazing $465 per person!!! I checked with the hotel front desk when we checked out and the regular nightly rate for the hotel is $329 per night.

How much did I spend in total on my trip?

Hotel/Airfare - $465.00
Food/Drinks - $275.00
Taxis - $80.00
Souvenirs - $100.00
Tips/Misc - $75.00
Total Trip Cost - $995.00

My 4 days in paradise cost less than $1000. I think we were able to get such a good deal because we traveled in the off season and the travel industry is hurting because of the slow economy. I think I will start taking a yearly vacation around this time of year.

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Expedia.com - Hawaii Deals

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$50,000 Savings Challenge Update

2009-10-07T07:20:00.001-04:00

Image Courtesy: alancleaver

I haven't updated the balance of the savings challenge in a couple of months. It's still one of the highlights of my financial goals.

How am I funding the savings challenge?

Each month, after all of my regular monthly obligations have been covered, any leftover money (even after my regular monthly savings contributions) goes toward the savings challenge.

What's the goal?

My goal is to have $50,000 in my savings account be December 2010. If you are wondering why I am saving so much, you can check out the post here.

Where am I now?

At the end of June, I was up to about $42,000 but had to withdraw about $12,000 for my home refinance in July. Right now, the balance is around $34,600.

You can follow along on the savings journey here or here.

Related Post:

Cash is King

How Did Your Credit History Start?

2009-10-05T06:25:00.001-04:00

Image Courtesy: The Consumerist

Do you ever think back to how and when you started using credit? The days where if someone pulled your credit file, instead of pages and pages of accounts and inquiries, you'd only see a blank sheet of paper.

I'll never forget how my credit history started. The year was 1995 and I was 18 years old. I'd applied for one or two regular credit cards but I was declined due to lack of a credit history. I didn't let that stop me though; I was bound and determined to get a credit card. After all, an 18 year old with a credit card would make people think I had money, right?

I don't remember if I saw the advertisement for a secured credit card on a TV commercial or in a magazine. All I had to do was send them $300 and they would send me a credit card with a $300 credit limit. The $300 I mailed them would stay in an savings account and earn interest but I could not withdraw the money.

I mailed them the money and received my credit card. In fact, I still have an account with the bank. Only now, my initial $300 credit line secured card is now an unsecured card with a $35,000 limit and I am not required to maintain a savings account to serve as collateral. I don't really use the card that much since I have another credit card that offers a better cash back program. This is my oldest credit card though and I try to make sure I use the card every now and then just to keep the account open and active.

Now it's your turn, how did your credit file start?

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Equifax - Score Power

Debts Missing From Your Credit Report? Don't Count It Out Just Yet.

2009-09-28T06:00:00.015-04:00

One of the top rules of managing debt is that all consumers should regularly be checking their credit reports for mistakes and inaccurate information. Mistakes by credit reporting agencies and creditors are common but typically it is minor information that is being reported incorrectly. However, there may be a rare time that a consumer is very conscious of an outstanding debt that doesn't seem to be listed on a credit report. While it is likely not to happen to most consumers in a lifetime, there is a possibility that a true debt is missing from a debtors report.

Sure, it may seem like a wondrous time in the life of a debtor to seemingly be rid of a debt, especially a large one, the reality is that it can come back to haunt you. One reasonable explanation as to why the debt is not on a person's credit report is likely because it is on someone else's. If that consumer were to check their credit report and report the mistake, chances are very good that the debt will find its original owner. Creditors who are owed large sums of money will not hesitate to take the actions necessary to pursue the money.

Beyond the Limitations of Your State?

If you have found that your credit report is missing some information, there are several things you should do. The first step would be to check the statute of limitations on debt in your state. If the statute of limitations has passed, a creditor can still contact you regarding the debt; however, it will be no longer legal for them to collect on it. If you are confident the statute of limitation has passed, the creditor will likely stop contacting you if you can prove your are right and that you, in fact, know your rights.

If your debt is not outside the limitations of time set by the state in which you reside, it is advisable that you start putting money away toward paying off the debt. Do not contact the creditor until you are ready to deal with the debt. The only way you will be able to propose a settlement is if you have the money upfront to do so. Settling for a lesser amount or paying the debt in full will be the only two ways to be rid of a debt that has not exceeded the statute of limitations.

Start Preparing for The Payoff

You can start saving and play the waiting game to see if the creditor contacts you first, especially if the statute of limitation time is close. However, for consumers who want to make good on the debt, it is advisable to have enough money to offer at least 50-60% of the balance before making contact. If a debt is really far gone and has been outstanding for a long time, creditors will probably not be very willing to accept any kind of monthly payments. If the balance is high enough, a creditor may be inclined to take you to court if you are not ready to settle outright.

In most cases where a debt is erroneously attributed to another consumer or missed from a credit report by mistake, the mistake will be noticed and very rarely will a creditor miss an opportunity to collect on monies owed. By taking proactive measure to settle on the debts you owe, you'll be ready to face up to the financial obligations you have created and not further harm your credit or future financial life.

This is a guest post from Tisha Tolar. Tisha is a writer for DebtFreeDestiny.com, where she provides information about credit card consolidation, debt relief and how to get out of debt.

A Few Thoughts On Life and Savings

2009-09-21T09:00:00.010-04:00

Image Courtesy: bowakon

You ever have that feeling where you just feel good and that everything is okay in your world? I've had the feeling for the last few days and I'm sure my upcoming trip has a lot to do with it.

I will be headed off to San Juan, Puerto Rico tomorrow for 4 days with a couple of my friends. I've never been to Puerto Rico and I've actually never left the continuous 48 states. I know some people take vacations all the time and it is no big deal. To me though, growing up with a single mother and with very little money, travel was not something I ever saw myself doing. I envisioned my adult life struggling financially just as my mom did.

These days, the money worries are still there; just not nearly as bad as they were back then. I was able to pay for my hotel and flight from money I'd saved; not using money I didn't have (credit cards). I was able to go to the ATM and withdraw spending money for my trip without worrying about if I would be able to pay my mortgage or utilities next month. If I splurge a little on my trip, it's not a big deal; I've saved for that.

I've said it before and I say it again, SAVE, SAVE, SAVE. It doesn't matter if it is $5, $50 or $500; just save. Having a savings account not only allows you to cover those emergencies or unplanned expenses, it also allows you to cover fun things.

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Here are some links to a few of the most popular online savings accounts:
ING Direct Orange Savings Account
HSBC Online Savings Account
WT Direct High Interest Savings
MoneyAisle - Great rates on CD's and Savings Accounts

ING Savings Referrals

2009-09-20T19:30:00.000-04:00

I've now made it a little easier for you to get a $25 referral for opening a new ING Orange savings account or an Electric Orange account. All you need to do is click on one of the links below and then open your account with a minimum of $250 and you will get a $25 bonus referral. If you don't have $250 right now to open the account, please use this link instead and open with whatever amount you can afford.

If you click on a link and get the following message, “We’re sorry, but the referral link within the email you received has expired and is no longer valid. We recommend that you contact the sender and ask them to re-send the referral email. Or click ‘Continue’ to proceed with the application process without the account opening bonus.” try the next link on the list. I’ll cross them off as they’re used. If all the links are used, email me and let me know.

Orange Savings Account - 1.30% APY as of 9/20/2009. No fees and no minimum balance.

Orange Savings Referral 1
Orange Savings Referral 2
Orange Savings Referral 3
Orange Savings Referral 4
Orange Savings Referral 5
Orange Savings Referral 6
Orange Savings Referral 7
Orange Savings Referral 8
Orange Savings Referral 9
Orange Savings Referral 10

Or, if you are looking to open an Electric Orange account, open with $250 and get a $25 bonus.

Electric Orange Referral 1

Electric Orange Referral 2

Electric Orange Referral 3

Electric Orange Referral 4

Electric Orange Referral 5

Make 2009 your year for savings. ING allows you to open multiple savings account for multiple purposes.Open your accounts today.

They also have savings accounts for Business Savings!!!

Checkup On My Credit Scores

2009-09-14T06:30:00.003-04:00

Image Courtesy: SliceofNY

I haven't done a credit score checkup post in quite awhile. Although I check my credit reports monthly to make sure there are no errors, I haven't checked my credit scores since April and that was because I was looking to refinance my adjustable rate home loan. I wanted to make sure my scores were good enough to obtain the best interest rates available since I knew the decrease in my home value would be one of the factors hindering the loan approval.

One of my ongoing and not often mentioned financial goals is to get and maintain credit scores of 720 and above with all three credit bureaus. When I checked my scores in April, all three bureaus were showing scores over 720!!!

When I checked my scores last week, there was an unexplained drop in 2 of my scores. I know that my new home loan is showing up on my credit report now and new accounts usually drop your scores temporarily by a few points; but not over 30 points.

How are my scores looking right now?

Equifax

758 on 4/12/2009
765 on 9/3/2009
I'm pretty happy with my Equifax score. Most lenders in my area pull Equifax.

TransUnion

734 on 4/12/2009
688 on 9/3/2009
I don't know what happened here. A drop of over 40 points for a new home loan? I've been checking my credit report and there hasn't been any negative information added. I'll have to keep an eye on this.

Experian

721 on 4/12/2009
685 on 9/3/2009
This is always the lowest score for me. I still don't understand the sudden decrease.

The highest FICO score you can obtain is 850 and anything over 720 is generally considered a good credit score.

How do you get and maintain a good credit score?

Timely Bill Payment. This is 35% of your credit score. Having a late payment reported can send your credit score into a downward spiral. A late payment can stay on your report for up to 7 years.

Credit Mix. This is 10% of your credit score. Having a good mix of installment loans, credit cards and mortgages is good for your credit score. This is really important if you have a short credit history. Obviously, you should not apply for new credit just to have different types of credit if you don't need it. This will actually hurt your credit in the short term.

Debt to Credit Ratio. This is 30% of your credit score. The closer you are to maxing out your amount of available credit, the more negative the impact to your credit score.

Length of Credit History. This is 15% of your credit score and is something that simply improves with age. The oldest credit line on my credit report is over 13 years old.

New Credit. This is 10% of your credit score. Every time you apply for new credit, the lender checks your credit score. This causes an "inquiry" on your credit report and can decrease your score 2-3 points. Multiple inquires in a short amount of time can also send your credit score into a downward spiral. Shopping for a mortgage or car loan is considered as one inquiry if done within a 30 day time period.

How do I check my credit reports?

I use Equifax Credit Watch Gold (affiliate) which tracks all 3 credit bureaus and alerts you to any changes within 24 hours.

Bail Money - I Got My Money Back!!!

2009-09-10T07:00:00.015-04:00

Image Credit: Kangotraveler

This weekend, I was looking forward to doing a whole lot of nothing and pretty much just hanging around the house and catching up on my sleep.

Unfortunately, Saturday morning around 6am, my sleep was cut short by a phone call. The call came from an unknown number and I don't usually answer those calls. They called three times before finally leaving a message. Since they kept calling, I figured it may be important and promptly checked my voicemail.

It was a message from my cousin's girlfriend asking me to call her back ASAP and it was urgent. They have a one year old child and I figured that maybe something bad had happened and she needed me. I quickly called her back; only to find that my cousin had been arrested the night before and they needed $1300 to bail him out of jail.

My first thought was to say no. Over the years, I've adopted a pretty strict policy against loaning money to family and friends. I've done it in the past and it usually ended badly. This time though, after thinking about it for a little bit, I figured I needed to help him out. He just started a new job and I knew he had to work on Saturday afternoon. Having a young child, he can not afford to lose his job. Reluctantly, I rolled out of my nice comfy bed, got dressed and headed to the bank to withdraw $1300 from my Slush Fund and then head over to the county jail.

I am so thankful that I have a Slush Fund for things like this. This savings account is my first line of defense before hitting my real Emergency Fund. This account covers those minor emergencies, irregular expenses and things I just plain forgot about. I can withdraw money from this account and it does not disrupt my finances very much since I set aside a fixed amount each month out of my regular budget.

Finally, after waiting around for several hours, they released him. We got out of there around 3pm; just in time for him to get a shower and get to work and just in time for me to get back home and take a nice 2 hr nap.

When my uncle died about 10 years ago, he left my cousin a small amount of money in a savings account. I didn't realize he still had it until he came over yesterday to bring me back the $1300. I really didn't expect to get the money back; at least not all at once.

Luckily, the thing he got arrested for was a misdemeanor and will probably get his money back once he goes to court in November. Hopefully, this will be a learning experience for him and his first and last experience with the inside of a jail cell.

Financial Resources

Thrift Store Shopping Tips

2009-09-08T06:30:00.002-04:00

Image Courtesy: back_garage

I have to admit that I am not the biggest fan of thrift store shopping. Don't get me wrong, I'm not opposed to it or think that I'm too good for thrift stores. My problem is that I hardly ever find the things that I am looking for. When I go to the thrift store, I'm usually looking for hardly used pants and shirts. I've posted before that I am not the most patient person so It's really hard to look through hundreds of pairs of pants. Especially when there are multiple combinations of sizes and lengths all there together in no particular order.

I'm more than happy to buy and wear good quality clothing from the thrift store. As a matter of fact, just a few weeks ago, I was able to find a pair of khaki's for $4 that had never been worn and still had the original tags on them.

My aunt on the other hand is the thrift store queen. She buys all of her clothes from thrift stores and I don't think she had been to the mall in years. I can only imagine how much money she's saved just from buying her clothes at the thrift store instead of the big department stores.

I went with her on one of her thrift store shopping sprees and picked up a couple of tips I'd like to share.

Be Open Minded. Since the inventory changes daily, you never know what you may find. You may go in one day and not find anything that you can use. You could go back the next day and find a tons of items. Most thrift stores have a range of items such as clothing, housewares, furniture, electronics, outdoor furniture and books.

High Income Neighborhoods. My aunt has found that by going to thrift stores in high income areas, the items are usually of higher quality and in better condition. Most times, she is able to find clothing that still has the original price tags on them.

Return Policy. Since most thrift stores do not accept returns, be sure you check and make sure any electronics you purchase work properly before you leave the store. Most of the thrift stores I've been have dressing rooms allowing you to try on the clothing before you purchase it. Some stores do have a 7 day return policy so make sure you check on the store's return policy if your aren't sure about an item.

Sale Days. Some stores have certain days when a special color tag is at a special price. For example, on Tuesdays, all green tags may be 50% off.

Are you a thrift store shopper? What tips can you add?

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Ben Bernanke Was A Victim of Identity Theft

2009-09-02T07:00:00.003-04:00

Image Courtesy: ShinyThings

Did you know that anyone can be a victim of identity theft? Looks like not even the Federal Reserve chairman, Ben Bernanke, immune to it.

According to USA Today, identity thieves stole his wife's purse last August from a Capital Hill Starbucks. It doesn't appear that the Bernanke's were personally targeted as there were over 500 families involved.

What was in Mrs. Bernanke's purse? Her drivers license, Social Security card, four credit cards and a book of checks from the couple's joint bank account. You would think the federal reserve chairman's wife would know better than to keep her Social Security card in her purse.

With your drivers license, social security card and a credit card, the identity thieves have all they need to assume your identity and wreck your finances. If you currently have your social security card in your purse or wallet, remove it now and put it in a safe place.

Here is a 3 part series I wrote on Avoiding Identity Theft:
Avoiding Identity Theft - Part 1
Avoiding Identity Theft - Part 2
Avoiding Identity Theft - Part 3

Lack of Patience Can Cost You Money

2009-08-31T06:50:00.003-04:00

Image Courtesy: E Bartholomew

Have you ever heard the saying, “Patience is a virtue?”. Knowing how impatient I am, my mom used to tell me this whenever I'd get upset about something not happening when I wanted it to happen.

Having patience can not only help you deal with a number of situations in your life but patience can also save you money.

I'll be the first to admit that I'm not the most patient person in the world. When I want something, I want it now. If you tell me that you will be here at 1pm, I would really like you to be there at 12:55pm. On the flip side, if I tell you I will be there at 1pm, you should expect me to be there about 12:50pm.

Being impatient has cost me tons of money in the past. It all goes back to me wanting it NOW. I've written several times on this blog that electronic gadgets are my weakness. When I saw something I liked, I'd go ahead and purchase it without planning for it or thinking about how it would affect my finances. Of course, the end result of my impatience was a mound of credit card debt.

I hate to even think about how much money I've thrown away by not waiting. We all know that there are usually big sales around certain times of the year. If there is something I wanted, I didn't have the patience to wait for a sale. For example, last year, I wanted a new flat screen TV. Instead of waiting for the big sales at the end of the year, I bought my new TV in August. Of course, around Christmas time, I saw the same TV advertised for about $200 less than I'd paid just four months earlier.

These days, I'm better at being patient in my personal finances. I plan and save for my next purchase. I still splurge every now and then but I manage that by setting a small amount of money aside each month in a special account for that purpose.

What about you? Does your lack of patience cost you money?

Sunday Morning Roundup - Puerto Rico Edition

2009-08-30T09:30:00.003-04:00

Sunset in Puerto Rico
Image Courtesy: Bowakon

In about 3 weeks, I'll be leaving for my much anticipated vacation to San Juan, Puerto Rico. I found a great deal on a 4 night stay at the Ritz-Carlton in San Juan for less than $500; including round-trip airfare. I've been ready to go since I purchased the trip a few weeks ago.

If anyone wants to submit a guest post, I'll be happy to have them while I'm gone. Just give me a shout and let me know.

Here are some of the posts I've enjoyed this week:
Establish Goals to Prevent Financial Chaos @ SingleMa's Fabulous Financials
Debt Traps College Students Fall Into @ Free From Broke
Do You Save Loose Change? @ Frugal Dad
7 Quick Numbers to Fix Your Financial Situation @ Gather Little by Little
Free Budget Spreadsheets - Over 60 to choose from @ Lazy Man and Money

Thanks for reading SingleGuyMoney and have a great day!

Modern Day Bartering To Save Money

2009-08-24T06:45:00.003-04:00

Wikipedia describes bartering as a type of trade that does not use any medium of exchange (money), in which goods or services are exchanged for other goods and services. Bartering dates back to times before there monetary currency.

I was discussing with one of my friends and coworkers about how much I hated to iron my pants. No matter how I do it, I can never get them right. I can never get the creases like I want them and they are usually still wrinkled in some spots. Instead of trying to iron my pants, I would take them to the dry cleaners. The dry cleaner I use charges about $2 per pant with light starch. I only take my khaki's that I wear to work to the dry cleaners; my jeans I still try to iron or I just fold them up out of the dryer.

My friend was talking about how much she hated to balance her to checkbook and how she did not know how to budget. She made a joke a couple of weeks ago about needing me to balance her checkbook and helping her with a budget. I know she makes more money than I do, yet she still manages to live paycheck to paycheck.

I asked her today if she would be willing to iron my pants in exchange for me balancing her checkbook weekly and helping her with a budget. She thought it was a great idea! I never thought she would go for it and was actually just joking. We agreed that I would balance her checkbook once or twice a month and help her setup a budget with Mvelopes. In return, she will iron 5 pairs of pants and 5 shirts (enough for a week of work) for me.

I'll be doing something I don't mind doing and she will be doing something that she does all the time and will save us both a lot of money. No longer will I be spending up to $100 a month in dry cleaning bills and she will be able to save money by not paying overdraft fees. With her new budget in place, she should be able to bulk up her emergency fund which is currently about $80.

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Cash is King

2009-08-19T08:00:00.000-04:00

Image Courtesy: Dan4th

If you haven't realized it yet by reading this blog, I hang onto a large amount of cash. I've also been called a "cash hoarder" by some of my close friends.

My current goal is to save $50,000 in cold, hard, cash. I'm about $18,000 away from my goal as of the last checkup. I'm fairly confident that I will be able to meet this goal by the end of this year or early 2010 instead of December 2010 as I'd originally planned. If I hit my goal within the next six months, I will then increase the goal amount to $75,000.

You may ask, why so much cash? There are several reasons that I hang onto a large amount of cash.

Low Risk Tolerance
I'm not a big fan of the stock market. I have a low tolerance for risk when it comes to my money. I don't like the wild swings of the stock market. I sleep better knowing that if I put $1 in the bank today, that $1 will be there tomorrow along with a couple of cents in interest.

Outside of my 401k, I don't do any additional investing. The recent number of scandals involving ponzi schemes (think Bernie Madoff) and people losing large amounts of money in bogus investments does not help my view of investing.

Cash Gives You Options
If you've ever applied for a loan or credit card, you know how the process goes. You have to submit all of your financial information and hope that you are worthy enough that the bank will loan you money.

If you have cash in the bank, you don't have to worry about that. Do you need to replace your vehicle and you find a nice one for $5,000? You can simply go to the bank and withdraw the money from your account without the headache and hassle of applying for a loan. If you water heater breaks and you need a new one or you need emergency auto repairs, don't let trying to find the money to pay for the repairs add to your worry.

Right now, we are in a "credit crunch". Due to the amount of money banks have lost due to bad loans, they are being very, very picky about who they give money to (and I can't say that I blame them). If you are like me, you aren't as worried about the credit crunch as much as others. I've had the credit limit on several of my credit cards cut because the bank is trying to minimize the risk of loss and it really didn't affect me that much.

Large Expenses Ahead
I have a 16 year old sister that will be headed to college in a couple of years. I know my mother can't afford to pay for any of her education so I plan to help her out as much as I can. I had to work two jobs in college in addition to my student loans, just to make ends meet. I want her to work but just not as much as I had to. In college, you should be focusing on getting your education; not trying to figure out how to pay the bills. Due to my mother's low income, she will be able to get grants and qualify for loans but I don't want her to come out of college with the amount of student loan debt I had/have. Having cash in savings will allow me to help her without wreaking havoc on my own finances.

You always hear about the great returns people have earned in the stock market. Yeah, that may be true but there are also people that have lost their shirts. It's generally only in economic environments like we are in now that people seem to remember that "cash is king".

What about you? Do you hoard cash? Has the recent economic environment changed the amount of cash you save?

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