Save Money, Get Out of Debt, and Live a Frugal Life!
Not much time for a full post today. So I thought I’d share this skit from SNL. It’s been around a while, but it’s still funny.
“Seriously, If You Don’t Have the Money, Don’t Buy It!”
Have a great weekend! 
Head’s up…Next week I’ll be hosting the Carnival of Money Stories. If you’re a blogger I’d encourage you to get your submission in early.
This is the continuation of the post on summer jobs for a college student that require very little start-up funding. Read Part 1 for items 1 and 2.
3. Work as a Personal Trainer
It may seem like a really prestigious or hard to get position but where I live I was able to obtain my personal trainer license by attending a weekend course and writing a final examination. You can work for a flat hourly fee at a major gym chain or you can pay your fees and work at a gym that allows you to obtain your own private clients.
It makes sense to get started with a major gym chain first because you need to meet some potential clients and gain some experience before you can venture off on your own.
4. Freelancing
Many of you are probably happy because I finally mentioned a job that doesn’t require a lot of physical effort. The other day I ran into an old friend and eventually he started complaining about how he paid some guy $300 to build him a website. How would you like to be that guy?
All of us are good at something (Yes, even Kramer! I just never figured out exactly what it is!?!) that could earn us some money. There’s people out there that would love to play guitar, improve their English, improve their tennis skills or even learn how to pick up girls (surprisingly there are plenty of professional pickup artists out there). The point is that there are people out there that would love to learn/have certain things done for them and if you possess one of those skills then you could use it to your advantage.
I have another friend that earns a decent income on the weekends by selling his services as a photographer. Obviously it’s not as easy as it sounds because it took him a few years of school and experience to gain a credible reputation. If you start in your early 20’s there is no telling how much income you could start earning from your freelance work. You could even turn your freelancing venture into a highly profitable side business or potentially a full time job one day.
This is a guest post from the blogger behind Studenomics a personal finance blog that offers common sense advice for college students and recent graduates. Studenomics is the ultimate resource for young people looking for advice on how to survive this current recession, grow their careers, manage their finances, and still be able to enjoy the weekends.
Summer of George Introduction @ Studenomics.com
Learn a New Language @ TotalCandor.com
Take Up a Sport and Become Good At It @ FreeFromBroke.com
Help Your Local Church @ GatherLittleByLittle.com
Take Some College Courses This Summer @ PoorerThanYou.com
Summer Jobs With Little Startup Funding Required @ MoneyNing.com
Take Control Of Your Financial Situation @ Bargaineering.com
Work Abroad This Summer @ CashMoneyLife.com
Enjoy Cheap Summer Activities @ MoneySmartLife.com
Enjoy your Summer of George!
Are you all about money? Obsessed with making more money and having more of it to spend on the things you want? How would you characterize your relationship with money?
Since I’m known amongst some of my friends and family as the money guy, I often get viewed as being all about money. I really cringe when I hear that, or when I get the sense that people view me that way. I don’t think they mean any harm by the comment. Still, I want to make it perfectly clear that money (i.e. making more, having more just for the sake of having more, etc.) isn’t what rules my life.
What’s led me to this point in my life (blogging three times a week on the topic of personal finance, having a bunch of money books and magazines strewn about the house, etc.) are a few things, the least of which is money, in my opinion.
There’s a time in my life that I’m not too proud of: post college, when I had to move back in with my parents and rely on them for shelter and employment. It’s a long story, (you can read it here) but the bottom line is this: in the end I got fed up with not being responsible for myself and burdening those around me.
Something changed in me during those few months and since then I’ve valued personal responsibility, independence, and securing my future over most other things. I never again want to depend on anyone else or burden them because of my poor choices. Money is just the tool that can help me create that personal responsibility and security.
Another aspect to this is the fact that, as a Christian, I feel that God calls me to take care of myself, those under my care, and those that cannot help themselves. So much so, I feel it’s one of the building blocks for living a life that is pleasing to God.
“If anyone has no care for his family and those in his house, he is false to the faith, and is worse than one who has no faith” – 1 Timothy 5:8
Another reason I do this (spend time each week researching the topics within personal finance and subsequently writing an article) is that I really enjoy creating. This is fun for me. And it’s become somewhat successful. Even for a guy who’s not that great of a writer. There’s so much that goes on with running a blog: reading, writing, networking, coding, designing, commenting, emailing, selling, and the list goes on. I have a great time running what has essentially become my own small business. I may eventually grow tired of this subject, but for now I feel like there’s still a bunch to discuss, and more growth to be had with the blog.
Just a quick note to clarify that this is a niche blog written by a real person. But it is not a personal blog, in the traditional sense. The focus here has always been, and will remain on money and finance from my perspective. I say this because I get the feeling sometimes that people may not know the difference between what I’m doing here at Prime Time Money, and what Mrs. PT does with her personal blog, for instance.
Okay, back to my main point… For us to have success in our own personal dealings with money, I think it’s key to actually put money in it’s place. It’s really not money we’re after. …It’s happiness, security, the ability to give, the freedom to have guilt-free fun, (fill in this space with what you value). Money is just one of the tools to help get you there.
So next time you find yourself focusing too much on money, try and remember what you’re really after. What is it you’re obsessed with? Money itself or something greater?
This past week and weekend were very positive, both financially and personally. Some of you may know that we’ve got our sights set on our student loan repayment to be completed in 2009. Well, this past week we inched a bit closer to seeing that happen. And likely a bit sooner than expected.
My company stock had an unexpected high last week and so we decided to exercise some of the options I had received when I was hired. Company stock isn’t something I want to hold onto any longer than I have to, so it was good to see a bit of it go, and some extra cash for debt repayment coming our way.
On top of all that, I was able to see my Mom this weekend for Mother’s Day, celebrate Mrs PT’s first Mother’s Day, and participate in our baby girl’s dedication at Church. It was truly a special weekend. On to the quickhits…
Here’s some nice posts from last week’s reading…
NCN, who’s thankfully decided to stay in the blogging business a bit longer just posted a great article at No Credit Needed titled, A 10 Step Outline of Our Financial Plan. I love posts like this that really show you how to map our your financial life. NCN is my hero.
What do you think of this Prepaid Credit Card for Teens discussed at Moolanomy?
Credit Cards Don’t Suck, You Suck! Thanks for the compliment, Free From Broke. 
10 Dumb Ways Of Wasting Money, a guest post at Bible Money Matters.
Kacie from Sense to Save is finally Paying of the Car Loan! See how she did it. Awesome!
Think Your Way to Wealth presents, Is Buy and Hold Dead or Just Misunderstood?
Disputing a Charge on Your Credit Card by Stretchy Dollar
122 Ways to Trim Your Budget at Frugal Dad
Carnival of Debt Reduction: It’s a Marathon, Not a Sprint!
Carnival of Personal Finance: Birthday Edition
Carnival of Pecuniary Delights: Are You Cashing In on Going Green?
Thanks to the generous hosts!
Today I thought I’d share some mini-reviews of one of my favorite financial products: the high yield online savings accounts. There are many of these accounts now available across the web. All contain different features, both positive and negative. But most, if not all, are FDIC insured, contain no fees, and pay an interest rate significantly better than traditional savings accounts. You should definitely find one that’s right for you and get started saving. And don’t just consider this list. These are just some of my favorites. For a side by side comparison, see my list of top high-yield savings accounts or the chart below.
FNBO Direct Savings- FNBO Direct is a product of the very old and stable First National Bank of Omaha. That’s where Warren Buffet lives. That’s got to be a good sign right? Anyway, they offer a nice, FDIC-insured savings account with a leading annual percentage yield (APY). There is no minimum to open a savings account. They also have a bill pay (checking) account, certificates of deposit (CDs), ATM card, credit card, and now a debit card. Their website is very user friendly, but maybe not as easy to maneuver as others. See my full review of FNBO Direct.
WT|Direct Savings – WT|Direct is a product of the Wilmington Trust Corporation. They promise a very competitive APY for the first 60 days of opening the account and if you open the account with at least $10,000. This rate has historically been one of the stronger rates out there. If you don’t have the 10K to get the good rate, the account doesn’t pay much better than a regular savings account. Still, you might want to check them out for the 60 days. The customer service is reported to be excellent. They are FDIC insured and charge no fees.
HSBC Direct Savings – HSBC Direct is a product of the massive global banking leader HSBC. They were voted “best of the breed” by Money magazine in 2007. They are very similar to the other major players in the online savings world. No fees or minimums, historically competitive APY, and access to a variety of related financial products.
ING DIRECT Orange Savings- ING DIRECT is, in my opinion, the reigning leader in online savings because of their great website, excellent customer service, and multitude of other financial products. They are owned by ING Group, based in the Netherlands. You mean you couldn’t tell they were Dutch based on that bold orange? They offer a great savings account, a $25 bonusto get started, electric orange checking account, as well as debit cards to access your money. Like others, there is no minimum to open an account and they extend their services into CDs. They also have mortgages, life insurance, and low-cost investing through their Sharebuilder product. They are also FDIC insured. See my full review of ING DIRECT.
E*Trade Complete Savings – The E*Trade Complete Savings Account is a product of the very notable E*Trade, the online, low-entry broker. I’m not exactly sure, but I suspect E*Trade opened this account because they got tired of all the traders moving their cash balances to high-interest savings account when not in the market. E*Trade simply created a local alternative. And they didn’t do a bad job at it. The Complete account offers a decent APY rate historically, with no minimums and of course, no fees. They are FDIC insured as well. Incidentally, they offer mortgages, checking, and CDs. Really a full range of products with a nice basic account. If you use E*Trade brokerage services, this is a great place to park your cash.
Virtual Bank eMoney Market – Virtual Bank is a division of Lydian Trust Company. They have a nice virtual savings account with no minimums or fees. The account is FDIC insured. The rate isn’t the best, but they do offer a refer a friend program that will pay you $20 for every friend you refer and will give them $20 to get started. They also have an eMoney Market account. I have one of these. The only difference that I can tell between this account and the virtual savings account is the $100 entry fee and the slightly higher APY. The virtual account is actually promoted as a good account for children. Whereas the eMoney Market account would be comparable to other high-interest online savings accounts.
Capital One Online Savings – Capital One’s Direct Banking division is the parent to this account. As you can imagine there are many banking options under Capital One’s umbrella, along with credit cards and other loans. This savings account is a nice one. It’s got a great rate as long as you have over $10K deposited. No fees and FDIC insured. Capital One, as you know, has a traditional bank as well. Therefore, if you go with the Direct Bank’s Online Savings then you will have an easy time making deposits and accessing your money if you sign up with a traditional bank too. As mentioned earlier, Capital One is also in the business of loans and credit cards. You’ve seen the annoying commercials.
Schwab Bank Investor Savings – Very similar to the other broker-owned saving account above, Charles Schwab is in the business of investments. Schwab obviously needs no introduction. They, like the other broker above, don’t want you to be tempted to keep your cash outside of their system. They get control of all your money by creating this account. Not that it’s a bad account though. It’s actually pretty great. No fees, no minimums, and it’s of course FDIC insured. The APY is very competitive right now. If you already have your investments with Schwab, it’s a no-brainer to stick with them and keep your cash earning money here.
EmigrantDirect American Dream Savings – EmigrantDirect is an online banking division of Emigrant Bank. They are one of the longest running online banks out there. Emigrant Bank itself is very established as well. They are out of New York. The American Dream savings account is excellent. No fees, no minimums, and FDIC insured. Transfers and APY are very similar to the other big players in this area. They also have some nice CD option available. This is definitely one account I’ve wanted to open for some time. I guess I just didn’t since they aren’t that much different from the one’s I have.
Dollar Savings Direct – Dollar Savings Direct is basically the twin of EmigrantDirect. Both are owned by Emigrant Bank. The story (thanks to Jim from Bargaineering) is that the Dollar Savings Direct account is some sort of English branded offshoot of the Spanish version of the Emigrant Direct account. Are you confused yet? Here’s what you need to know: the only differences between the accounts is that the Dollar Savings Direct account required a $1000 minimum and pays a slightly better rate. This account has no fees and is FDIC insured.
And now, if you’d like to compare the accounts side-by-side, here’s the table I created to help you do so:
| Bank | Rate (APY) | Minimum | Review | Bonus |
|---|---|---|---|---|
| Ally Bank | 1.64 | $0 | Ally Bank Review | $0 |
| Dollar Savings | 1.70 | $1K | Pending | $0 |
| FNBO Direct | 1.50 | $0 | FNBO Direct Review | $0 |
| WT|Direct | 1.51 | $10K | Pending | $0 |
| Schwab Bank | 1.05 | $0 | Pending | $0 |
| HSBC Direct | 1.35 | $0 | Pending | $0 |
| EmigrantDirect | 1.30 | $0 | Pending | $0 |
| ING DIRECT | 1.30 | $0 | ING DIRECT Review | $25 |
| E*Trade | 0.50 | $0 | Pending | $0 |
| Virtual Bank | 1.00 | $1K | Pending | $20 |
| Capital One | 1.60 | $10K | Pending | $0 |
| Everbank | 1.77 | $1,500 | Pending | $0 |
Many people turn to promotional 0% interest credit card balance transfers to help them consolidate their high-interest debts or to participate in credit card arbitrage (using low interest debt to fund high interest savings accounts). In another post I’ll cover why these types of moves might benefit you. Both basically involve leveraging the interest rate on the card during the promotional period.
I used balance transfers like this when I was paying down my high-interest debt. And I ended up saving some money in the process. I haven’t written on this subject yet because I first wanted to touch on some of the dangers of doing this. While there are some definite financial benefits to using these balance transfers there are some things to watch out for that can make a good deal turn sour pretty quick. After all, credit card companies wouldn’t offer up these deals if they weren’t financially rewarding for them and not you. The truth is, though, that over the past couple of years, credit card users have wised up and started doing these deals the right way or simply avoiding them altogether. Anyway, here’s some things to keep in mind if you ever want to use a 0% balance transfer credit card.
Paying Balance Transfer Fees – The first thing you’ll want to watch out for are the balance transfer fees that the credit card companies are going to want to charge you to make the transfer. A typical fee is around 3% of the amount you are transferring. Some card companies set a cap limit on this around $75. Ideally you’ll want to pay no transfer fees for these deals. But that’s getting harder and harder as the card companies have wised up to users taking advantage of these promotions. How do you avoid the fees? I’d first try calling the card company up and asking them if they will waive it for you, or at least cap it at a lower level. If they won’t budge then look for one of the few remaining cards out there that don’t charge a fee. Fees of course can negate any money you save with doing the transfer. So avoid them at all costs.
Missing a Payment – Okay, let’s say you’ve transferred your balance over to the new card and it’s sitting pretty at 0% interest. A month goes by and you forget to make the minimum payment. Not good. According to many of these deals, your 0% rate could instantly go away and you’re back to a ridiculously high interest rate. Maybe even higher than your original rate. You don’t want to miss a payment. Set yourself a reminder on a work calendar or something. Make this balance a real priority so you stay on top of it and avoid losing your promotional rate.
Paying the New Balance Off Too Early – Paying off your credit card balances are always a good idea right? Well, if you’ve gone through the trouble of making a balance transfer to a 0% interest rate card then you are wasting all that effort if you pay it off too early. There is no penalty usually for doing this (paying it off early), but it has an effect on the amount of money you are saving by doing the transfer. The best thing to do is to divide your balance up into the number of payments you’ll need to make before the promotional period is over. Then, just make that payment each month. That extra cash that you could potentially put towards prepaying this debt could be sitting in a high-interest savings account earning some nice interest for you. This all goes back to leverage. You want your money working for you, not against you.
Canceling the Old Card – You should think twice before canceling an old credit card. Your FICO score is based on, among other things, your credit history. If you close an old account just because you don’t have a balance there anymore, you lose that history and that could lower your credit score. So, once you pay off the old card with the transfer money, consider using it to pay a monthly recurring bill and simply paying the small amount off every month. If it’s a reward credit card you definitely want to make sure you cash in all the rewards before you close it. I understand though, if you’re just looking to get rid of all your cards and want them closed. If that’s your goal, then skip this warning.
Missing the Expiration Date – This is similar to missing a payment. The 0% promotional rate will expire anywhere from 3 to 18 months. Please, make sure you set yourself a reminder to have this new balance fully paid off by the time the promotional period expires. If you miss this date and by then you still have a balance on the card, many cards will void the entire promotional period and make you retroactively pay the interest rate as if the promotional rate wasn’t there. This is not good, and only negates the whole reason you made the transfer.
Don’t Put Purchases or Cash Advances on Top of the 0% Balance – Lastly, here’s another credit card company fine print move you want to avoid. Don’t use the promotional rate card for anything other than the transfer for the promotional period. Why? Because they apply your payments to the purchases or cash advances last. Thus, burying these high interest charges under your 0% balance transfer. This means if you have a large amount transferred, it will be a long time before you can make your way down to the purchases and cash advances to knock those out. During that long wait time, those charges will be racking up big time interest rate charges. Thus, making any cost savings from the transfer null.
What else should you watch out for when it comes to 0% balance transfers?
I spent just a few hours this afternoon reading Jim Randel’s new book: The Skinny on Credit Cards, How to Master the Credit Card Game
It literally took me less than 2 hours of reading to take in all this quick guide (of around 125 pages) had to say. And I read slow. A faster reader could have knocked this thing out in an hour, I’m sure. What’s the point? The point is we all don’t have several hours each week to devote to understanding the basics of personal finance. That’s probably why you’ve subscribed to this blog. You just want some quick, helpful information a few times a week.
And let’s be honest, personal finance can be a really boring subject at times. But you have to learn it. So, why not pack key subjects into nice, easy-to-absorb books. That’s what Jim has done.
The Skinny On™ book series is here to help those of us with little time, who are in need of quick, solid information. So far there’s a book on credit cards, one on the housing crisis, and another on will power. The idea for the style of the books came from the Japanese style of writing called manga. The book uses a story line and pictures (stick figure drawings) to illustrate the concepts around credit cards. It’s very fun and easy to read. Throughout this book you follow Billy and Beth as they discover the secrets to mastering credit cards.
The book covers all you need to know in order to help you master the credit card and the game that credit card companies try to play. Specific topics include:
The book includes advice from notable authors Liz Pulliam Weston, David Bach, Suze Ormon, and others. I also really enjoyed Jim’s 20 key points on the FICO credit score.
I found the book to be a good way to introduce your spouse, who may be allergic to financial books, to the basics of credit cards. In fact, the book follows a couple who struggle in their relationship because one spouse isn’t on board with the financial plan. Both of them get a good education in credit cards though. And you will too with this book.
You can get it using the link above or in ebook form direct from The Skinny On website. Jim also gave me a few extra copies of his book to giveaway here on the blog. If you live in the U.S. and would like a copy, simply leave a comment below. Be sure to include your email address so I can contact you if you win. I’ll randomly select a winner this Friday, May 8th. Good luck.
This past week much has happened on the personal finance front at the PT household:
I called up our current mortgage holder, Countrywide (now Bank of America) and inquired about a refinance. Our loan is about a year and a half old, and current rates are around 1.5% points less than they were when we signed on. I used the “will you save by refinancing your mortgage” calculator at bankrate.com and ended up passing on the idea, based on the rates and closing costs quoted to me. However, Kevin from No Debt Plan recently completed a mortgage refinance. Congrats, Kevin.
Yesterday we tried out our city’s newly-formed farmer’s market. We didn’t buy anything, nor were we that impressed with the selection. Still, I think it’s something that, given enough time and progress, we could actually begin using. A farmer’s market was one of the things that John the millionaire mentioned in his interview with JD from Get Rich Slowly this past week. This is a must read. Do you use the farmers market in your area?
We just received a letter from Bank of America about one of our credit cards. Apparently they are lowering the credit limit on the card significantly because of how we’ve been using the card. We only use this particular card to pay our toll tag bill each month. We set it up this way so this wouldn’t happen and we could keep the card active. Very frustrating. This happened to Jason from Frugal Dad last year. He explains how this lowers your FICO score and what he did to try and fight back. We’ll likely try the same next week with hopefully better results. This makes two big strikes against BOA in the last year or so (see BOA fraudulent bank account switch). Makes me glad we’re moving more and more away from being dependent on traditional banks and lenders.
We were able to sign up through a family member’s account with Sam’s Club. We’ve considered joining before, but the annual fee has always deterred us. Now there’s three of us in the house and needs have changed. We were able to purchase a nice deep freezer (which we’re using to store extra milk, among other items) and will use the membership going forward to buy diapers, which we’re learning we use a ton of. FFB from Free From Broke recently mentioned he always gets his kid’s diapers from a wholesale club.
I was in the following carnivals last week: Carnival of Personal Finance, Money Hacks Carnival, and the Carnival of Pecuniary Delights.
Up this week on the blog I’ll have another book review, followed by some information on using 0% balance transfer credit cards. Thanks for reading.
Hi, I'm PT. No, I'm not a millionaire ...yet. But I have a big desire to help you learn to live a limitless financial life. more...
Join the newsletter and get:
- 52 Ways to Make Money eBook
