Archive for May, 2009
Friday, May 29th, 2009
Know a recent high school or college graduate in need of a few tips for managing their money? I know I needed help with my finances back in those days.
I had the pleasure of guest blogging over at the Quicken Online blog today, and shared an article titled, Your Future with Finances: From College to the Real World. Here’s an excerpt:
“Post college, we get a strong desire to step up to better accommodations, a new ride, nicer clothes, etc. The feeling that you should reward yourself isn’t a bad one. Just don’t let it get out of hand and start living at or above your new means. If you can maintain that frugal college mindset and keep your spending under control for just a few more months or even an extra year, you’ll be so much further ahead.” …read more.
So as not to leave the high schoolers out, here’s an article I wrote a couple of years ago: Open Letter to a High School Graduate. An excerpt:
“You may not be earning much over the next few years, but very little is needed now in order to have a big impact later. It’s true that there is more time to save later, but your saving will never be as effective as it is right now. So, if you haven’t already, begin saving and make it a part of your normal routine.” …read more.
Have any good money tips for graduates? Leave them in the comments below..
Posted in Kids and Money, Personal Finance Links | 3 Comments »
Thursday, May 28th, 2009
There are plenty of iPhone and iTouch applications (apps) that will help you manage your finances. Today I’ve put together a list of 10 that are Free and practical for occasional use. Now if only I could find a way to get the iPhone for free.
Compare and Convert – This looks like a pretty handy app for the grocery store. It helps you make purchase decisions about different bulk purchases. For instance, a 2 liter of sodas vs. a six pack of sodas. Which is the better deal?
by Red 5 Development
Balance – This app acts like an electronic version of your check register. If you’re opposed to using one of the “all-in-one-place” style money apps like the one from Quicken, and/or, all you have is one checking account to track, then this may be the app for you. Get rid of that check register and start using Balance. It auto-calculates the remaining balance for you.
by Connor Wakamo
Free Shipping Coupons – This app will let you browse all the free shipping deals available at over 1500 stores. Once you find the free shipping deal you want you just make your purchase online using your iPhone or iTouch.
by FreeShipping.org
Wesabe – Track all your money accounts in one spot. Similar to Quicken, Mint, and Rudder, this app lets you see all of your bank accounts and credit card balances in one spot. Also has a “nearby merchants” feature.
by Wesabe
Rudder - Use Rudder to track all your accounts, creditors, and other bills all in one spot. Know exactly “what’s left” in your accounts. This looks to be similar to Quicken, Mint, and Wesabe.
by Rudder
Quicken Online – Similar to Mint, Wesabe, and Rudder, you can use the Quicken Online app to sync up with your current Quicken Online account and track your accounts. See all your accounts in one spot. Also includes an ATM finder.
by Quicken Online
Mint – Similar to Wesabe, Quicken Online, and Rudder, this app will help you see all your accounts in one spot. Includes multiple budgeting and threshold reminder features.
by Mint
Amortize – Quick and easy to use amortization schedule. This app will show you the loan payment you will make on any lending decisions you are considering. All you’ll need is the principle, interest rate, and years of the loan. Great for house or car hunting. Will show you the monthly payment or the full amortization schedule so you can see how much interest you’ll be paying throughout the loan.
by Interlook Corp
Lockbox – Allows you to store passwords, IDs, account numbers, etc right on your iPhone or iTouch and encrypts the information so others can’t access it. With as many online account IDs we have these days, this seems like a nice way to keep all your information safe, and in one spot.
by GEE! Technologies
CBS Money Watch – Personal finance videos and more from a quality source.
by CBS and BNET
Pay Off Debt ($2.99) – Ironically, the free section didn’t have a debt reduction app, so I had to bring this one to the list. This app lets you see your debt snowball in action. Visualize how much you have left to pay off your debts. This app was created by the personal finance blogger from BluntMoney.com. I have a few promo codes to get this app for free. Comment below if you’d like a promo code.
So what do you think? Did I leave any off? Feel free to leave your favorite money-related iPhone/iTouch app in the comments below.
Posted in Organize Your Finances | 11 Comments »
Tuesday, May 26th, 2009
New Credit Card Rules Edition
Welcome to the 193rd edition of the Carnival of Debt Reduction. Considering the recent rule changes we’ve seen enacted for the credit card industry, I thought that would make a good theme for this carnival. The carnival features a section of articles related to the new credit card rules, as well as lists some of the highlights from the new legislation. Thanks to the WSJ’s Washington Wire for the list.
Best of the Best Debt Reduction
Existing balances: Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent.
Payments: A consumer payment above the minimum applies first to the balance with the highest rate.
More Debt Reduction
Teaser rates: Issuers cannot raise rates for the first year after an account opened. Promotional rates must last at least six months.
Bills: Issuers must send a bill 21 days before the due date.
About the Credit Card Industry Changes
Over limit: Issuers cannot charge over-limit fees on credit cards unless the consumer has signed up to allow such transactions.
Minors: For consumers under 21 years old, a company must get the signature of a parent or another to take responsibility for the debt, or it must obtain proof that the under-21 consumer can repay credit.
General Finance Advice That Might Help You Reduce Your Debts
Disclosure: Cardholders must get 45 days notice of change in terms.
Fees: Issuers cannot charge fees to pay by mail, phone, and electronic transfer or online, except for expedited service.
Gift cards: All gift cards must have at least a five-year life.
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A big thanks to everyone who participated in this week’s Carnival of Debt Reduction. If you’d like to participate in the future or possibly host it yourself, be sure and head over to the carnival website.
Posted in Debt Reduction, Personal Finance Links | 16 Comments »
Saturday, May 23rd, 2009
Hi everyone. What are you doing reading this? Get out and enjoy the holiday with your friends and family. On second thought, if you’ve got just a second, why not check out these QuickHits. Everybody loves QuickHits.
The Federal Trade Commission, who brought you great hits like AnnualCreditReport.com, is now cracking down on charity fraud. Read more tips and info on how to avoid charity fraud.
How to Save Money – The 1,001 List of Money Saving Tips and Ideas at Moolanomy
Money Hacks Carnival: Otter Pop Edition at Stretchy Dollar. Love those Otter Pops!
To Really Save Money, Cut Recurring Expenses, Not Daily Splurges at Amateur Asset Allocator
25 Traits of the Not So Well To Do at Free From Broke
Treat Your Personal Finances Like a Business at The Dough Roller
Break Your Big Goal into Chunks at Sense to Save
Posted in Personal Finance Links | 2 Comments »
Friday, May 22nd, 2009
I’m no stranger to unwanted debt. I’m currently working on paying off some debt I’ve had since college. I’m embarrassed to tell you how long ago that was. 
Paying off debt can be a long and challenging process, I realize. I often stop to remind myself what it will be like when I achieve my goal of getting rid of my unwanted debt. Here are a few good reasons you might be happier if you were in less debt:
1. Less Hassle – Think about it. For every debt you get rid of, you rid yourself of a monthly statement to open and review, a bill payment to schedule and make, and an online account to log into and check. Less debt means less to do. I think we’d all rather spend our time doing things we enjoy versus sorting through another debt payment each month.
2. An Improved Credit Score – These days, your credit score affects things like insurance premiums and your ability to find a job. So having a high credit score can be very important to your overall financial success. By reducing your debt, you improve your balance to available credit ratio, one of the key factors that affect your credit score.
3. Less Worry When Things Turn Bad – It’s never a good time for an expensive medical issue or a job loss. But a hard time can turn really hard when you’ve got a lot of debt to worry about too. Getting rid of your unwanted debt will give you one less thing to worry about, if and when things go wrong.
4. It Just Feels Great Not to Owe Anyone – You’ve probably paid off a debt before. Remember that feeling? Imagine if you could experience that same feeling for all your unwanted debts. That huge burden lifted would feel great!
5. More Money for Other Goals – Lastly, imagine all the other things you could be doing with the money you’re using to pay debts right now. Here’s a few ideas: funding your retirement, saving for a down-payment on a new home, saving for a child’s college, giving more money away to charity, saving for a great family vacation. You get the point. Having less money going towards old debts means you can have more money going towards the things you want more, the things that matter the most.
Have a good reason to be less in debt? Leave it in the comments below.
Posted in Debt Reduction | 13 Comments »
Wednesday, May 20th, 2009
Today I thought I’d share what I know about setting up a certificate of deposit ladder, or CD ladder. In short, a CD ladder is a set of CDs that you might invest in, that are set to expire at successive dates, where the cash from the expiring CD is used to reinvest in another CD one period older than the oldest CD currently in the ladder. Confused yet? Okay, let’s take a step back and discuss how CDs work. Then I’ll jump into the CD laddering strategy.
What are Certificates of Deposit?
Certificates of Deposits, or CDs, are a short term investment product offered by most banking institutions. They’re sort of like a savings account, except they are not as liquid and they pay a nicer, fixed interest rate. Liquid means how easily you can get your money out, or how “available” your money is. CDs have a designated maturity date and don’t become liquid until the period expires (matures). This is the reason they can pay a nicer interest rate than a typical savings account. You’re simply trading liquidity for higher interest. Higher interest is of course what we all want. But we each have different needs when it comes to liquidity. Some need their money next month. Others don’t need it for a couple of years. Those that don’t need it for several years will reap the benefit of a higher interest rate. But, as you’ll see with laddering you can eventually have your high rates and your liquidity. Good things come to those who wait.
There are many options when it comes to CDs. CD maturity dates range from 1 month to 5 years. Typical offerings come in the 3 month, 6 month, 1 year, and 5 year variety. Which CD is right for you can depend on many factors. The greatest of which, mentioned above, is your need for liquidity.
But what happens if you withdraw your funds from a CD early? This is a no-no, unless absolutely necessary. You will likely have to pay a penalty and/or lose some of the interest you earned if you cash in your CD too early. This is where building a CD ladder really makes sense. You get to enjoy the benefits of higher interest earned on your savings without the major decrease in liquidity.
The CD Laddering Strategy Explained
Okay, lets set up a CD ladder. What you’ll first need to do is determine what type of ladder you’ll want. Does this ladder have big rungs (yearly) or does it have many, smaller rungs (monthly). If the maximum you can bear to be without all of your funds in 1 year, then a monthly ladder is right for you. If this money is just extra savings that you don’t mind waiting 5 years on, you can do the yearly ladder. This may be a good option for people who are ultra risk averse and don’t want to be in the turbulent stock market.
For our example, let’s say you select yearly. It’s the quickest to setup anyway. Do some research and find the highest paying 5 year, 4 year, 3 year, 2 year, and 1 year CDs. Bankrate.com has a nice list. Divide your savings into 5ths and purchase the 5 CDs with 1/5 of the money each. Your CDs will look something like this (let’s say you invest $5,000):
- 5 Year CD – $1,000 @ 4%
- 4 Year CD – $1,000 @ 3.5%
- 3 Year CD – $1,000 @ 3.0%
- 2 Year CD – $1,000 @ 2.5%
- 1 Year CD – $1,000 @ 2.0%
At this point you can just sit back and relax, knowing your money is earning you decent, inflation-busting interest and its guaranteed by the bank issuing the CDs. After one year, your accounts will look like this if you continue the ladder strategy:
- Newly purchased 5 Year CD – $1,000 @ 4%
- 5 Year CD (now only 4 years to mature) – $1,000 @ 4%
- 4 Year CD (now only 3 years to mature) – $1,000 @ 3.5%
- 3 Year CD (now only 2 years to mature) – $1,000 @ 3.0%
- 2 Year CD (now only 1 years to mature) – $1,000 @ 2.5%
- Matured (and cashed out) 1 Year CD – $1,000 @ 2.0% 0 Cash is used to purchase a new 5 year CD.
Thus, the rotation of the ladder begins. You’re expiring cash is used to purchase a new 5 year CD. Therefore, at the end of five years, and five maturity and purchase combinations, you’ll have nothing but 5 year CD rates in your ladder. Safe, secure money, paying a nice, high rate of return, maturing in one-year intervals. Woohoo!
Need more explanation? jim from Bargaineering.com does a good job of sharing the monthly certificate of deposit ladder in this video: Certificate of Deposit Ladders.
Advantages of a CD Ladder
As you can see by how CDs work, and by the strategy, there are many reasons you’d want to have a CD ladder:
- CDs are FDIC insured up to $250,000. You’re money isn’t going anywhere. You just can’t touch it till the CD matures.
- CDs pays interest rates slightly above their online, high-yeild savings account counterparts. And, as mentioned above, the longer the maturity level, the higher the rate.
- Eventually you’ll hit the sweet spot (when you’re initial oldest CD becomes mature) and you’ll start seeing long-range CD rates maturing one after another. I’ve never done this, but it’s got to feel great when you get to this point. Always a high interest rate.
- The CD ladder really shines when rates are dropping. You’re still earning high interest, while the current market is offering lower and lower rates. Currently, rates are at historic lows. So, setting this up now might not be the best idea. Still, CD rates are largely better than high-yield savings accounts, so it might still make sense for you now.
Here are some other discussions about CD Laddering:
Do you have a successful CD ladder? Should I start one now?
Posted in How To Save Money | 16 Comments »
Monday, May 18th, 2009
Welcome to this 2nd edition of the newly re-established Carnival of Money Stories. And Happy Victoria Day! I’m not Canadian, but I love Canada. So far I’ve visited Vancouver and Calgary and loved both trips. Today just happens to be Victoria Day, also called May Two-Four. Can you guess the double meaning of that nickname? Today, Canadians celebrate Queen Victoria’s birthday and the end of their long winter season.
I’ve got some good stories from my trips to Canada that I’ll save for another time, eh. Instead why don’t you spend some time checking out the huge list of money stories below. Thanks to everyone for participating and for linking back to the carnival.
PT’s Picks
Madison presents An Auction Experience to Remember posted at My Dollar Plan.
Patrick @ Cash Money Life presents Be a Stay at Home Mom or Working Mom? posted at Cash Money Life.
Business
Celes presents Passion Paycheck posted at EmbraceLiving.Net.
Penelope Pince presents Business Decision: Turning Away a Customer posted at Pecuniarities.
Debt
Chris McClelland presents 10 Reasons Your Bank Never Wanted You to Read This posted at Lucrative Investing.
Mr Credit Card presents Auto Loan After Bankruptcy – One Reader’s Success Story posted at Ask Mr Credit Card.
Dave Ozment presents Bad Money Decisions posted at Do You Dave Ramsey?.
Housing
glblguy presents What should I do with my house? posted at Gather Little by Little.
Investing
Dividend Tree presents Shake the Dirt off and Take a Step-Up posted at Dividend Tree.
Net Worth
KeithMcC presents Never Move for Money! posted at {be} Wealthy / [get] Happy.
Shopping
BeThisWay presents Frugal Lemon Leads to Frugal Lemonade posted at Are You Going To Be This Way The Rest of The Time I Know You?.
That One Caveman presents Don’t Fall For the Convention Center “Liquidation Sale” Scam posted at One Caveman’s Financial Journey.
Money Beagle presents How We’re Trying To Support The Local Economy | Money Beagle posted at Money Beagle.
FMF presents Do You Respond to Solicitations? posted at Free Money Finance.
Adam presents Our Cell Phone Company Is Scamming Us posted at Your Money Relationship.
More Stories
Silicon Valley Blogger presents Have A Mind For Business? Entrepeneurs Think Differently! posted at The Digerati Life
The Happy Rock presents Saving Money with Old School Technology – Answering Machines posted at The Happy Rock.
Lazy Man presents » Save Money on Cell Phones posted at Lazy Man and Money.
Peter presents Hard Times Make Us Stronger: The Story Of The Butterfly posted at Bible Money Matters.
J. Money presents Credit Card Roulette – To Play or Not to Play? posted at Budgets are Sexy..
Mr. ToughMoneyLove presents Whittling Away at the Expense Ledger posted at Tough Money Love.
My Journey presents Barter System is Alive and Well! posted at My Journey to Millions.
AG presents Haggling Works: Try It, Save Money posted at Let’s Be Curious.
KCLau presents The Most Common Habit of Rich People posted at KCLau’s Money Tips.
Shadox presents Car Trouble, Still Worth it posted at Money and Such.
Even More
Jeff Rose presents Identity Theft – Capital One saved Me! posted at Consumer Boomer.
DR presents Lies, Damn Lies, and Personal Finance posted at The Dough Roller.
MB presents TradeKing Brokerage Review posted at Money Blue Book Blog.
jim presents What Is A Good Credit Score? posted at Blueprint for Financial Prosperity.
nickel presents Investing With Lending Club: Low vs. High Risk Loans posted at fivecentnickel.com.
Ryan Suenaga presents What’s in My Portfolio: Toyota posted at Uncommon Cents.
Donald presents How to Make More Money posted at Life Optimizer.
Dan presents New Discover Current Card – Like Spying on Your Kids? posted at Everyday Finance.
Darwin presents Advanta Freezes Credit Cards – High Yield Notes in Jeopardy? posted at Darwin’s Finance.
FIRE Finance presents Top 7 Energy Saving Tips for this Summer! posted at FIRE Finance.
Photo by René Ehrhardt
Posted in Money Stories, Personal Finance Links | 22 Comments »
Monday, May 18th, 2009
No time for the QuickHits, but here’s the carnivals I was in last week. Thanks, hosts!
The Carnival of Personal Finance at Earn What You Spend.
The Money Hacks Carnival at My Life ROI.
The Carnival of Money Stories at Gather Little by Little.
Posted in Personal Finance Links | No Comments »
