PT Money » How To Save Money

Upromise Review: A Little Extra Savings for College

PT — Thu, 12 Nov 2009 05:03:36 +0000

I joined Upromise a couple of weeks ago to start saving money for little Miss PT’s college education. I had heard of Upromise before, but didn’t bother signing up…because I’m a dork. I’m going to give you the full review below. But if you want to make better use of your time, just sign up with Upromise and get started. This is really one of those things you and I both should have started a long time ago.

Upromise is a free, set-it-once-and-forget-it type program that will earn you free money towards a college education. The savings aren’t lucrative. But it’s extremely easy to set up and then you’re free to just go about your business.

Who is Upromise?

Upromise was founded by Michael Bronner, Founder and Chairman Emeritus of Digitas, a leading marketing services firm. In August 2006, SLM Corporation, commonly known as Sallie Mae and the nation’s leading paying-for-college company, acquired Upromise, Inc. Upromise has given away over $500M in tuition assistance since 2001.

How Upromise Works

In short, you get a kickback from Upromise just by buying from their partners. They cut you in on the commission.

You simply sign up and enter your credit card, debit card, or store loyalty card information. Upromise handles the rest. They track your spending and provide a % payout to you when you buy from one of their partners. Upromise’s partners include ExxonMobil Corporation, JCPenney.com, LandsEnd.com, Sears.com, and hundreds of others.

What makes this so great is that you don’t even have to be conscious of where you’re spending your money. Upromise is partnered with most of the places you will go anyway. There are some ways to optimize your savings with Upromise (see below), but those things aren’t necessary to get the base level of savings.

When you’re ready to withdraw your funds, just make a request for a check, transfer to a 529 Savings Plans, or use it to pay for your own student loans. To request a withdrawal, use this form. (h/t Bargaineering)

What’s the Catch?

There really is no catch. Upromise is a completely free service. They make their money from the Upromise partners, who pay to participate and for marketing opportunities.

How Much Can You Really Save?

I’m just getting started with Upromise. So I can’t exactly boast about my huge savings from the program. I think I have around 21 cents saved since I started a couple of weeks ago. Ha! But, others have gone before me. And they have some significant dollars to show:

Paul at Fiscal Geek saved over $700!
Sun from Sun’s Financial Diary saved over $400 (as of 2007).
Thrify Florida Mama saved over $500 (as of 2007).
I’ve also seen blog comments from people who have claimed to have earned in the thousands by fully utilizing what Upromise has to offer.

Those numbers are by no means going to cover your kid for their 4 years at Harvard, but they will provide some assistance. And if you can earn that amount without really doing anything extra then you’ve succeeded. Free money!

How to Optimize Your Upromise Savings

Want to make the most of the Upromise system? You should look into their extra services:

TurboSaver Internet Browser Toolbar
Upromise Credit Card
Invite Family Members to Sign Up
Shop Online Using Upromise.com

Final Thoughts

As I warn with any savings system like this, don’t let the opportunity to save affect your buying decisions. For instance, don’t just browse the Upromise list of merchants to find something to buy so you can save for college. But if you’re already planning to buy, check out their list of merchants and consider using their link.

Also, be conscious of how Upromise might affect your decisions to use your credit or debit card more than you normally would. Bottom line, as long as you can set this up for yourself and don’t really change your spending, it’s going to be a plus for you. Sign up with Upromise and get started.

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PocketSmith: A Calendar-Based Financial Planner

PT — Mon, 02 Nov 2009 19:22:56 +0000

Tracking Your Future Cash Flow

Do you remember my Excel-based Monthly Expense Tracker? I used to use it religiously to keep track of my future spending and saving goals. This was great because it allowed me to avoid over-drafting my accounts, and helped me to stay focused on reaching my savings and debt reduction goals. Looking towards your future spending with your goals in mind is far more valuable than simply looking back at your past spending and beating yourself up over failures.

Well, someone took that concept and designed an online software tool that does exactly the same thing. Only theirs is far more interesting to look at and comes with a few more bells and whistles. It’s called PocketSmith.

More About PocketSmith

PocketSmith is a calendar-based financial planner. It helps you maintain a focus on cash flow forecasts. It’s quick and easy to use. In short,

“it uses a calendar paradigm for a unique view on one’s finances, and bridges the gap for many who are looking for a simple and understandable solution for working with their money.”

PocketSmith also comes with modules for adding actual spending data from your bank account. This is done using manual upload. Automation coming soon. They also have a nice goal setting module which works hand in hand with the calendar to help you reach your savings and debt reduction goals.

How PocketSmith Works

When you create your PocketSmith account you are taken to your calendar. Your first step is to load this calendar up with all your known future income, spending, saving, and debt reduction activities. For instance, if you get paid on the 15th, you go to that date and create an “event” called salary (or paycheck or whatever you want to call it).

You’re then able to add in how much your paycheck will be, and set up any type of recurring options (i.e. every month on the 15th). One thing that I noticed PocketSmith might improve on is the ability to add recurring items on specific dates. For instance, I get paid on the 1st and 15th. I’m not able (as far as I can tell) able to set up my salary event using those parameters.

Adding future expenses and savings transfers is just as easy. Once you have it all setup you’re able to see what the projection for your cash flow is. Going forward you need only tweak the calendar events as your information changes.

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Writing My First E-book: Saving to Give

PT — Mon, 12 Oct 2009 19:07:24 +0000

This week I’m busy writing my first e-book. I’m really excited about finishing it soon and sharing it with you guys. It’s going to focus around the idea of saving more of your income, so that you can do more giving. The working title is:

Saving to Give: Learn the 4 steps to improve your finances so you can improve the lives of others.

It will be geared toward those of us with an income and a desire to make a positive impact on the world. The book will hopefully be a quick, easy read full of specific action steps you can follow to help you save more and give more. It will also be free.

Get an advanced copy of Saving to Give. I recently soft-launched the PT Money Newsletter. I’m not done setting it all up, but it will one day include exclusive content and giveaways, video tutorials, access to other projects, and more. If you join the free newsletter now, you’ll be the first to check out the e-book, which I’m hoping to launch within a week.

What are your thoughts about the e-book idea? Do you have any interest in reading it? What do you think of the title? The cover art? I’d love to get your feedback this week as I’m finalizing the draft.

Carnivals from last week…

debt redux, taxes, twenties, hacks, pecuniary, frugality, economy

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Is Your Emergency Fund Big Enough?

PT — Wed, 30 Sep 2009 16:22:29 +0000

During my last book giveaway, a couple of readers expressed interest in a new post on emergency funds. They wanted to know how to know when your emergency fund is big enough. I haven’t covered this specifically in detail before, but I did cover emergency fund basics and how to know when your emergency fund is too big. Both are good primers on this subject. Today I’ll try and answer the question, “how do I know if my e-fund is big enough?”

What is an Emergency Fund?

If you didn’t visit the links above, you may be clueless as to what exactly an emergency fund is. And defining it is a good place to start if we’re going to be deciding how big it should be. In my opinion, an emergency fund is money set aside to be used only in the case of a life emergency. Think of it as a small self-insurance policy.

A last minute vacation to Vegas isn’t an emergency. An emergency is an unexpected and required event / happening that you’re unable to pay for with your regular monthly income. The point of having a special fund setup to cover this expense is so that you won’t have to go into debt to cover the costs. You’ll be able to pay it off immediately, or support yourself over a few months in the case of a job loss.

So, how do you know if your emergency fund is big enough?

The first thing I’d say is, if you have to ask, odds are it isn’t big enough. I know I’m not going to get away with that easy answer though. So what I will do is try and give you some points to think about to give you confidence in your emergency funds. After all, I’m not going to be there to bail you out.

Know the Rule of Thumb – Most money experts will tell you that you need anywhere from 3 to 6 months worth of expenses in liquid savings (i.e. cash). If you’re unsure of how to calculate that number, or if you did calculate it and it didn’t give you warm and fuzzy feelings, keep reading.

The reason the 3-6 rule is used is because for the typical family that’s enough to help you get by for a bit if you lose your job. It also ends up being enough to help you cover unexpected medical bills, car repairs, etc. for the insured.

Know Your Monthly Expenses – If you’re going to use the 3-6 months expenses rule, you’ll need to determine what that is. The quickest way to do that is to get online and view the last 6 months of data from you bank. Use that data to determine the total average monthly spending over the last 6 months. Multiply that average by 3, 4, 5, and 6 months. The other factors listed below are going to help you determine which of these numbers (3x, 4x, 5x, or 6x) to use as a basis for your emergency fund.

Know Your Insurance Deductibles – A job loss isn’t the only type of emergency you could experience. Something could happen to your car, your house, or the health of someone in your family. Do you know how much your insurance company is going to cover? Are there large deductibles on your plans? Someone with a $5,000 deductible and a catastrophe health insurance plan is going to need a bigger emergency fund than someone with a premium plan who’s deductible is in the $100s. Based on what you find out here, you may be in need of a 6 months e-fund vs the 3 month variety.

Know Where You’re Not Insured – If you actually go without insurance for some area of your life, consider what an emergency in that area would cost you. Bump your emergency fund up based on what you have uninsured. Those without health insurance should really have a huge emergency fund to help cover those unexpected medical bills.

Know Your Assets – If you’re a one car family, unless you live in the city, you are highly dependent on that car (asset). If that car needed a $2,500 repair, you’d have no choice but to spend the money to repair it. Likewise with your home. If your home is old and in need of constant repair, you’re emergency fund will need to trend higher to be able to cover those repairs.

Know Your Job Market - Are you the sole bread-winner in the family? How confident are you that you could get another job a few weeks or months after you’ve been laid off? If you think it would take more than a few months, because (a) your industry is in bad shape, or (b) you aren’t that marketable (for whatever reason), then consider bumping your e-fund number up above the 6 month mark. Keep going until you feel comfortable with the number.

Final Thoughts

So where does that put your emergency fund? I think if you start with the 3 month rule and then bump that up based on the risk involved in the other areas I listed you can get pretty close to your actual required emergency fund. When in doubt, just strive to make your emergency fund big enough to cover you for 6 months of income instead of expenses. That’s a very conservative number and would put you way ahead of most other savers.

If you’ve decided that your emergency fund could use a boost, don’t stop now. Take the next step and start saving more today. Read the Best Way I’ve Found to Truly Save Money.

photo by alancleaver_2000

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Ohio CollegeAdvantage 529 Savings Plan: $100 Plus in Bonuses

PT — Tue, 22 Sep 2009 11:30:18 +0000

As promised yesterday, today’s post will detail how you can get at least $100 in bonus money for future college expenses. Even if you don’t have children yet.

This past weekend I finally got around to opening up a 529 Savings Plan, one of the most effective ways to save for college. We’ve been questioning whether we should open a 529 for some time, but what was ultimately holding me up was deciding on which State’s plan to use.

In the end, we decided on the Ohio CollegeAdvantage 529 Savings Plan. Don’t let the name fool you, you’re allowed to use the Ohio plan regardless of which state you live in now or which state you’ll be using the funds in.

Ohio CollegeAdvantage 529 Savings Plan

Other features of the Ohio CollegeAdvantage Plan:

The funds can be used for tuition, books, and even room and board.
Open an account with as little as $25.
No enrollment or maintenance fees.
Multiple, low-cost investment options (i.e. Vanguard), including FDIC-insured options.
The plan is also very flexible, allowing you to change beneficiaries at any time. You can even open it if you don’t have kids yet.

And like all 529 plans, the earnings from the investments are tax free, if you use them for college.

But here’s the factor that helped me choose the Ohio plan over some of the other top 529 plans (like the Utah plan I was long considering): more than $100 in bonus money to get started.

Bonus College Savings

Here’s how I got the bonus money:

Initial $25 Bonus – Just by opening an account and using a friend’s referral code I got a $25 bonus.
2nd Child “Refer a Friend” $50 Bonus – After opening my first account, I sent a refer a friend email to Mrs. PT. When she opens and funds a second account, I’ll receive $50 in my first account.
2nd Child Initial $25 Bonus – By using my referral code, Mrs. PT scored a $25 initial bonus of her own.
Systematic Savings $25 Bonus x 2 – The CollegeAdvantage Plan is also offering a $25 bonus for each new recurring monthly electronic funds transfer (EFT) or payroll deduction you set up. Since we have two accounts, we will get two of these bonuses.

In total, we’ll earn at least $150 in bonus money to help us get started with college savings. Here’s the step-by-step guide to opening your account and getting your bonus money for college savings.

How to Get Started and Get Your Bonuses

Step 1: Open a new Ohio CollegeAdvantage 529 Savings Plan account by December 15, 2009.

Step 2: Use the referral code 2506962. The picture below shows where you’ll need to place the code.

Step 3: Select a fund and deposit at least $25.

Step 4: You’ll receive your bonus within 7-10 business days after your account is established.

Step 5: Use the “refer a friend” to get unlimited $50 bonuses, plus new $25 bonuses for your new account and others you refer. Open one for another child, or your spouse by selecting “Yes, I am a CollegeAdvantage account owner, and wish to establish another account for a new beneficiary.” Do this for all your children. Be sure to use your referral code (which is your account number).

Step 6: Set up a recurring monthly electronic funds transfer (EFT) or payroll deduction by January 31, 2010. Set up another for even more bonus money.

Step 7: Contribute at least $25 per month for three consecutive months.

Step 8: Get the $25 bonus for each EFT after the EFTs have been active for 90 days.

As you can see, if you have multiple kids and multiple EFT setups you can really maximize the amount of bonus money to help you get started towards college savings. This is a great plan and a great time to start saving.

$25 Referral Code: 2506962

Need more convincing about the Ohio CollegeAdvantage Plan? Check out Bankrate.com’s review, Morningstar rankings, also see this Kiplinger State-by-State Guide. Remember to get all the IRS facts about 529 plans and consult a tax professional to get all the details if you’re unsure.

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The Most Effective College Savings Plan? The 529?

PT — Mon, 21 Sep 2009 11:00:21 +0000

I’ve been getting a ton of questions lately about my 529 plan decision. As you know, with the arrival of little Miss PT, college savings has been a hot topic around here. And it seems with the start of school, people are starting to think more about saving for their child’s future education. Here’s a recent question I received from a friend and reader:

“What do you think the most effective college savings plan for our kids is? A 529? I would love your input. Hope you guys are well. I’m sure little Miss PT is growing like a weed. Keep it up man!”

My response, which gives you some insight into what I’ve learned about 529s, went something like this:

Just Start Now

I heard some advice once about college savings that sounded pretty good: “just start now.” In other words, don’t get too caught up in the different kinds of plans/accounts. Just pick something and go for it. The truth is, a majority of folks out there wait till it’s too late to start doing anything. And it’s not because they didn’t have the money. It’s because they thought about it a couple of times over the years and never acted. Either because they were confused by the choices, or too lazy to set it up. Had they just started an automatic savings withdrawal to a CD or simple savings account they’d be better off than where they find themselves.

Honestly though, I’m currently one of these people. I haven’t decided on a specific place to stash my college savings. Although, I think I’m close. I really like what I hear about the Utah 529 Plan. The fees are low, fund options high (they have Vanguard funds), and you can use the proceeds in any State, not just Utah.

Local and Other Considerations

You live in Texas and so our situation is pretty good. You don’t pay state income tax. Therefore, there are no college plans that are particularly advantageous for Texans, unless you are dead set on sending your kid to a Texas school. In which case, there are prepay plans that might be better for you. Bottom line, you’re more free to look at another State’s plan. Most plans will let you participate in their plan and use the funds anywhere.

That being the case, the next thing you need to worry about is fees, flexibility, and fund options. CNN Money, Kiplinger, and the like are always ranking 529s based on these factors. Find one of those lists and narrow down your choices. Then pull the trigger and start saving.

There are some other options besides 529s, but I don’t see any specific reason for you to choose them over the 529.

What to Invest In

Once you have the 529 plan set up, you’ll need to decide what to invest in. Most plans offer target-date or age-based funds. These fund accounts get more conservative as your child ages. That way, when your child is 16 and the market crashes, half your investments won’t be taken. By then, you’ll be in more conservative investments.

My Game Plan

So, here’s what I’ll be doing asap:

Choose a 529 and open an account.

Start auto-depositing a monthly amount into one of the target-date funds.

Retirement Before College Savings

Just a quick note to add that I think it’s important to take care of your retirement needs prior to considering college savings. Not to say you need to have your retirement fully funded before you save for your kids. You just need to be making the maximum contribution needed to help you achieve your retirement goals and then think about college savings. This is just my view. You may take a different stance.

$100+ in Bonus Money for College Savings

Tomorrow I’ll share my experience with opening up a 529 plan and share how you can get bonus money of more than $100 to go with your new 529 account.

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Considering a No Penalty CD from Ally

PT — Mon, 14 Sep 2009 05:25:33 +0000

Using CDs for Short Term Savings

Have you ever considered a Certificate of Deposit (CD)? I’ve never used one myself. About the time I had significant short-term savings built up I found out about high-yield savings accounts. CDs and their restrictions seemed like a product of the past. Of course, you can achieve both flexibility and high-interest with a CD laddering strategy. But that takes a bit of discipline and patience to get that up and running. So, for the past few years it’s been high-yield online savings for me.

Online Savings

But let’s be honest, things have been pretty stale lately in the online savings world. It hasn’t been fun watching interest rates plummet to almost 1.00% at most banks. Everyone is searching for a better place to put their short term cash flow. Most recently, the rate drop at ING DIRECT has prompted me to consider another account. While I like ING for most of my savings goals, I can see myself moving the emergency fund from their to Ally.

Ally Bank’s No Penalty CD

I recently reviewed Ally Bank’s products. One of the CDs they offer is a “No Penalty” 9 month CD. I can’t stop wondering whether I should move our cash to one of these no penalty CDs for a while. The CD is FDIC insured, has no fees, and doesn’t have a minimum balance. The best part about the CD is that it combines a decent yield with the flexibility (to withdraw without penalty) that you get from online high-yield savings.

Have you moved to the No Penalty CD? If not, where are you getting your short term cash return from?

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Open a Holiday Savings Account

PT — Wed, 09 Sep 2009 05:05:38 +0000

Summer vacations are over. It’s time to start planning for that next big expense: Christmas (or whatever year-end holiday you celebrate). Don’t get caught off guard this year and be forced to either go into debt or raid your emergency fund. Plan ahead and be ready for an enjoyable holiday time with your family. Consider this your friendly reminder.

Establish a Savings Goal

The first step is to determine how much you need to save. Factor in all your expected costs for gifts, travel, food and entertainment. If you have access to last year’s spending records, take a peek there and make an estimate for this year based on last year’s spend. Now that you have a goal, divide it by how often you’ll be contributing. For instance, once a month would be 4 contributions (using the 15th of each month) from now. Divide your big goal by 4 and that’s what you need to stash away each month till the holidays.

Create a Separate Account

I’ve found that there’s a bigger chance I won’t raid my savings account if I keep it somewhere that’s a little harder to access. A good example of this is an ING DIRECT Orange Savings Account. Opening one of these accounts separate from your regular checking account (with BOA for example) might be a good idea. You can even create multiple savings accounts with ING DIRECT.

Open an ING DIRECT Orange Savings Account and get a $25 Bonus.

Review these other High Yield Savings Accounts.

Make it Automatic

Finally, set up an automatic deposit to the account on the date from each month when you’re sure to have solid cash flow. This will ensure you don’t forget about it next month and have the money to contribute. Best of luck with your holiday saving.

Post Edit: After looking through my archives it seems I remind you of this every year. All apologies if I start to sound like a broken record with this saving/automation/separation thing. It’s just what works for me.

—

Carnival of… Everything Finance, Pecuniary Delights, Money Hacks, Frugality Festival, Debt Reduction, Personal Finance, Best of Money

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How to Setup Multiple Savings Accounts at ING DIRECT

PT — Fri, 17 Jul 2009 19:50:43 +0000

Over the past few days Mrs. PT and I have been talking about starting to save for the down payment on our next house. I’m of the opinion that housing prices will remain at bargain levels for at least another year. Being of that opinion, I need to get my savings in gear sooner, rather than later. Also, we’re starting to think about Christmas and a vacation this winter. Both will be expensive, and we don’t want to have to finance these purchases using debt. So, let the saving begin.

With those goals in mind, today I decided to open up more individual savings accounts at ING DIRECT. I already had a savings account there, but it’s our generic emergency savings account. I don’t want to just start dumping all our different savings funds into the same account. It’d be nice to have them all in their own unique accounts. Plus, I prefer an automated system vs relying on me and my discipline. Luckily, ING DIRECT allows for multiple account setups, and they allow you to name them individually. Here’s how it works:

Step 1. Log in to (or sign up for) your ING DIRECT savings account. Note: I just recieved some more ING DIRECT $25 bonuses. Feel free to use one to open your account.

Step 2. Look for the “open another account” button.

Step 3. On the next page, select “Orange Savings Account”.

Step 4. Next, you’ll click the big “Open Now” button.

Step 5. Select how you’d like the account to be opened: single, joint, living trust, living trust – joint. Note: to set up a new joint account you’ll need the joint owner there to provide his/her login credentials.

Step 6. Finally, you’ll need to give the account a nickname (that’s the fun part), and decide where you’ll initially fund the account from and for how much.

That’s it!. You’re all set up. Here’s how your new account home page might look:

There are obvious advantages to setting multiple accounts up like this. We all have different savings goals and this account structure will allow you to log in to your account at ING DIRECT and instantly see how you’re progressing towards each of your goals. You might even like to nickname your accounts something like “Christmas Fund 500″ to remind you that your goal is $500.

So what do you think? Are you using this method already? Do you find that it helps you reach your goals easier? Or do you prefer to have all your savings in one account?

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WTDirect Cash Bonus of Up to $150

PT — Thu, 09 Jul 2009 13:06:44 +0000

Edit: this promotion has ended.

Here’s a great bonus deal from WTDirect. They’re one of my top high-interest savings accounts. For a limited time, if you’ve got the free cash, you can take advantage of this bonus offer.

WTDirect is offering a cash bonus of up to $150 to customers who open up a new savings account. They have an interest rate that is currently one of the best. Apparently, this offer is not going to be around very long, so open an account today.

Here’s how it works: Simply apply online for a WTDirect account, deposit $10,000 or more by July 31st, and keep your funds on deposit with WTDirect through October 31st.

You’ll earn a cash bonus of up to $150 based on the following schedule:

$150 bonus for a $50,000 balance
$100 bonus for a $40,000 balance
$75 bonus for a $30,000 balance
$50 bonus for a $20,000 balance
$25 bonus for a $10,000 balance

Based on my crude calculations, this bonus, combined with the current APY for the savings account, could provide an annualized return over the next three months of close to 3.00%. Not bad.

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