Wells Fargo or Redneck Bank…Do you know which bank is backed by the FDIC??

The answer to this question… BOTH.
I got my blogs first question from a pretty cool dude named Jeremy.

He asks….

I read your post about getting a better rate on my savings account . Makes sense, but how can one verify that the bank is legitimate? I’d rather not just throw money at somewhere I’m not sure of.

-Jeremy

PS Wachovia has really been making me angry with their tiny savings rates. Before I started to be so disgusted with them I had quite a bit of money in their bank. Makes me wonder how much money you have to have in there to get some respect.

A valid question for sure, and one I didn’t address is my previous post about online savings accounts. So how can one go about making sure their hard earned cash is safe?

The most important thing to look at, when selecting what bank you want to hold your savings account with, is verification that “bank x” is backed by the FDIC (Federal Deposit Insurance Corporation). Essentially, being backed by the FDIC means if bank x sucks at doing their job and they can’t afford to give you back your money, Uncle Sam will pay you back instead. If you put $10K in the bank and six months later they pull a WaMu, you will get all $10K back from the fed. I can’t stress this enough, being backed my the FDIC is uber important!

Do not sign up with a bank just because they have a phenomenal interest rate – chances are, if their interest is WAAAAY above competitors something fishy is going on -. If you put $10K in a bank that is not backed by the FDIC and that bank fails, then you are, how do we say… SCREWED! You probably will end up losing all of your hard earned money. Most banks advertise on their home page if they are FDIC insured (they know it is a huge selling point). If you have any doubts that the institution your looking in to may not be, you can always go here and verify.
As far as the interest rates go, I feel ya on getting some pretty crappy rates right now. When I opened my Countrywide Online Savings account I was earning a little over 3% on my money, less than a year later I’m earning a dismal 1.6%. I personally don’t chase interest rates. Sure there are banks out there that have better rates than mine, but it is hardly enough for me to go through the hassle of managing yet another account.

For example, say Joe Six Pack puts $20K in to a Countrywide account tomorrow and lets it sit for one year at 1.6%. At the end of the year Mr. Six Pack’s account balance would be $20,320. If you took that same $20K and put it Zions Bank (currently at 2.15% interest) and let it sit for one year, your balance would be $20,430. The Zions account earned you an extra $110 over the course of the year. For some, that extra $110 may be worth chasing, and if so good for them. Personally, I prefer picking a relatively solid performer and sticking with it (unless its rates are SEVERELY lower). I initially signed up with Zions Bank because they offered one of the highest interest rates in the country, but when I found out I had to physically mail in my deposits I quickly said “Peace Out Zions” (I prefer to do everything electronically).

As the title of this posts alludes, Redneck Bank is, as far as my research has shown, legitimately backed by the FDIC and a subsidiary of The Bank of the Witchitas. Although their 3.1% offer is enticing, I’ll stick to my countrywide account for now.

Anyone else have any interesting insight in to the online savings accounts?

Keep on saving!

"A dilemma"….follow up

About two weeks ago I posted about a dilemma I was having. For those unfamiliar, I was unsure of the amount of my disposable income I wanted to allocate to my “future house fund” and how much I wanted to throw at my student loan. That article has been my most read post and by far the most responded to. After mulling it over, running numbers, and deciding what I wanted my goals to be, I have reached a conclusion. I am committing to throw $1,000 each month towards that bad boy. That was the overwhelming recommendation from each reader that responded! I think in my head I was justifying the necessity to hoard my cash and put it all in my savings, when this clearly opposes mathematical reasoning.

Although I still believe personal finance needs to remain personal, I agree the numbers need to be strongly considered. I became focused on the desire to purchase a house (taking on more debt) when I should have been concerting my efforts towards breaking up with Sallie Mae.

This decision couldn’t have come at a better time! With a little over $12K in the bank, my Emergency Fund is fully funded (6 months pay) and allows me the freedom to throw as little or as much money as I’d like at my future house fund, or even better, towards my school loan.

So on this day, April 3rd 2009, I commit to putting a minimum of $1,000 to my school loans each month. Thank you fellow bloggers for whispering wisdom in my ear and opening my eyes… hey its like that Ace of Base Song… “I saw the sign, and it opened up my eyes, I saw the sign!Booya for Ace of Base, Booya for sweet advice from bloggers, and double Booya for paying down debt!

I am punching Sallie Mae in the face!

My Expenses: February 2009


Each month I’m going to try and post a list of my monthly expenses. This may or may not be of interest to my readers (sorry if you find this boring). If nothing else, it will allow me the opportunity to look back and see how my spending habits have changed over the long term. So here it is full disclosure baby… this is where my February cash flow went…


Explanation of Income:

Gift: This is money that I wasn’t expecting to get that fell my way. $500 this month was a great little bonus. I’m always stoked whenever this row is bigger than zero!

Interest Inc: Any interest that I may collect from investment/savings accounts. I’m a little creeped out that it worked out to $6.66 this month. Dear, Satan, please stay away from my bank account 🙂

Salary: My take home pay from the day job. I get paid every two weeks, so twice a year I get an extra paycheck for the month. May and October is when this joyuous occasion takes place this year.

Tax Refund: Self explanatory. (This was my Federal refund)

Tutoring: Something I do in my free time to make a little extra cash flow. This income varies widely from $200 to $1200 a month. At $772 I got no complaints.

If anyone wants to contribute money to any of my income categories, I wouldn’t be opposed, as all gifts are accepted….haha.

Explanation of Expenses:

Auto: Any maintenance and fuel costs associated with my car or motorcycle. This category excludes vehicle insurance. I’m telling you that motorcycle saves me some green…even though it is kinda dangerous.

Cash: Any cash withdrawals from an ATM.

Charity: $300 big ones split between a Christian Radio station I listen to and my church.

Dining: The dollar bills I be droppin’ when I take my lady on a sweet date (or when I’m alone and craving a tasty burrito)

Gifts: Any money I spend on someone else. In case you didn’t get the memo, February was Valentines Day so spending was a decent amount higher than normal months.

Groceries: Any food that I buy from a grocery store. My goal is to keep my dining and grocery expenses at about $250 each month. I get really happy when I am under that amount, like this month!!

Insurance: Includes car, motorcycle, and renters insurance.

Interest expense: This is my school loan . I have a monthly obligation of $178, but as mentioned in my other posts, I pay about double that each month. I took the $330 I  normally put towards the loan and combined it with the $500 unexpected gift to take a small chunk out of my $25,000 balance. It wont be long till I kick Sallie Mae to the curb. Booya!

Reimbursement: This category gets a number put in it when I send the mob to go collect any money people owe me.

The overall total is the cash I had leftover after all my expenses. This goes straight in to my online savings account and, either stays there, or gets put in my Roth IRA.

Sooooo, this is where my money goes. I try to keep it in line with my spending plan a.k.a da budget. February was a pretty darn good month and I didn’t really break the bank in any one category. Keepin’ my life in order is super important to me and I love knowing where every dollar I made goes. Kinda weird to think you don’t know what I look like, but you know how much money I spent on household items in February. Does that make you creepy? Or me?

Carpe Diem,

This is the way I live…

So if you are poking around this page that means you’re like me and you like knowing other people’s financial situations. I guess I really have no problem letting people ask questions about my money. Call me crazy, but if you are looking at this article than you have at least SOME interest also.

So here is how this little gem work…

  • INCOME pretty self explanatory. This is my monthly pay from my current job. If you have read my other posts, than you know I also tutor to make some spare change. I decided I didn’t want to include this in the income section of my budget as that income fluctuates each month and I did not want to build my spending habits around inconsistent income. I include the tutoring income at the bottom of the spreadsheet and I underestimate it for each month. I’ve been averaging $1,000 a month, but I still don’t want to change it’s current $500 value…I know that makes my budget less accurate, but less accurate in a good way right 🙂

  • INVESTMENTS, TAXES, and EXPENSES. Again, pretty straightforward so no real need to elaborate. I will mention, however, that I DO have health insurance, but since I am 23 I was able to stay on my parents plan (you know I’m gonna ride that out till I’m 25 and get kicked off their policy). I included a 5% increase section on my expenses because sometimes ‘ish happens (consider it like a mini-monthly emergency fund).

  • GOALS, BILLS, and PRIORITIES. The top right section is where I set out my financial goals on January 1 of each year. It starts with what I had in my accounts on 12/31/08 and I make assumptions as to what my accounts will look like come 12/31/09. The section below this is where I keep a list of my fixed monthly expenses…otherwise I’d be forgetting to pay that darn cable bill. And lastly, below that is where I list of the priority of all of my expenses. I did this so if I’m ever in a situation where a ninja stole all my money and I was fired from my job, I would know exactly how to spend each precious dollar that I had. Basically I put the most important bills at the top.

So that’s my life in a spreadsheet form. Hopefully it makes sense to you all, but if it doesn’t feel free to shoot an email or comment and I’ll let you know how it works.

Enjoy,

Obsession


I have found myself becoming more and more obsessed with the financial world over the last year. It started with a simple conversation with one of my friends who is a financial analyst for a big bank. We were having a slumber party in his living room (yeah we may be in our 20’s, but we will never be too old for slumber parties!) when he started telling me about the Roth IRA and how it could greatly benefit me. We talked for a good hour or two about other investment strategies (actually he talked, I listened). This conversation kickstarted my quasi-stalkerish obsession with finances. I love reading helpful strategies to make my money work harder. I don’t mess with the convoluted financial gameplans, I like it to keep it simple. Here is what I am doing to secure financial freedom over the next few decades.

Investing 8% in to my TSP (government equivalent of a 401K)
Maxing contributions to my ROTH IRA each year
Putting $2k in the bank each month for my future house fund
Doubling my school loan repayments every month
Selling cocaine to little kids that think it is powdered sugar

One of the above may or may not be a “white” lie…haha no pun intended. But seriously, I’m 23 and I feel like I’ve got a good jump start to the rest of my life. Fortunately I have a steady job with a cool title , make okay money $60k/yr, and live dirt cheap. Every dollar I earn I make sure that it is working it’s @$$ off and finding some friends to come back and play in my online savings account.

Peace up, A-town down,
D Ninja

Bad Acne = Credit Card Debt

Note: If you like this article (or even if you didn’t. Please feel free to check out our other articles. We encourage you to check out our Daily Question posts and respond. Thanks again and enjoy!

I was watching tv the other night when I saw a commercial for an acne product. I don’t know why, but I thought to myself “Self…pimples and credit card debt are pretty darn similar. They both suck, no one wants it, and it’s hard to get rid of.”

I think of acne in three different phases.

Phase I: Everyone gets a little bit of acne when they begin puberty. I put little pimples on my credit card almost every day. I use it for all my purchases and each time I do, I increase the amount owed to the CC company. BUT, I pay off this debt each month. Its equivalent to the tiny pimple you get on late Friday night and it’s gone by the time you wake up Saturday morning. Sure you had a pimple, but no one knew it! Phase I is were you want to be.

Phase II: Phase II represents the kid that was born with naturally oily skin and unfortunately has a pretty bad acne problem. This person has a choice. He can choose to see a professional, get acne medication, and be disciplined enough to battle his greasy genetics everyday….or he can choose to ignore the problem and let his acne turn in to Phase III boils. Maybe you have more debt than you would like? Maybe it’s not even your fault you have debt! But you have to face the reality that you have bad debt acne. The only ways to clear up your financial blemishes are to seek professional advice, obtain the proper tools, and commit to fighting the debt battle with all you heart! Pop your financial pimples so they don’t ever want to come back! The kid with oily skin has a choice to make. Do you want a face full of pimples? Or would you rather, have flawless skin that everyone is jealous of?

Phase III: Phase III individuals not only were born with a predisposition to terrible acne, but they actually massage their face with butter, pizza grease, and fried chicken and don’t care. They eat greasy finger food, don’t wash their hands, and smear their hands on their skin…all the while they complain that they wish their skin could be like Jessica Alba’s. I have no sympathy for these people. They abuse their credit cards. They spend more money than they make. When all is said and done they have poor financial hygiene! They look in the mirror and stare at their oversized pimples and sigh “oh well” as they walk out the front door. Phase III individuals are seldom able to change their ways and their “acne” problems will only end upon death.

Go pop a white head,

This article can was featured in the carnival of personal finance #159 found here.

This article was a featured article at this weeks festival of frugality found here

The best way to save over $200 a year!


I think for the first time in my life I was convinced by a door to door sales person to purchase their product. What were they selling? Cable…as in tv and internet. A man working for AT&T knocked on my door one afternoon and began his sales pitch. I was tempted to interrupt him and tell him I was not interested (as I do with most other salesmen).

He handed me a pamphlet of information that included all the different package options and pricing AT&T was offering. I saw their basic cable and internet package was $89 per month. I was paying $91 for my COX cable package. I told the man I wasn’t interested in making the switch because I wouldn’t be saving any money. He asked me about my current COX package (internet speed, how many channels I get, etc.). With COX I was only getting basic cable (channels 2 through 60) and medium internet speed. With AT&T’s basic package I would get over 200 channels and slightly faster internet. It sounded too good to be true so I asked the man how much the instillation fee was. Turns out, there is no instillation fee and we also get a cable box that can record four shows at one time and a high power wireless modem and router. With COX we don’t get a cable box and they charge a rental fee for the modem. The man said these aren’t promotional rates that are going to go up in one month. He explained AT&T is just trying to be competitive against the San Diego Mega-Cable companies like Cox and Time Warner.

Convinced that AT&T would be more bang for my buck I asked the guy for his card and told him I would give him a call later. I went back to my computer did a little more research and was sold that AT&T was a great value. I scheduled my appointment. The cable folks came out last weekend and installed our new cable and let me tell you…IT IS WONDERFUL! The cable box is amazing. I don’t need to record four shows at once, but its still a neat feature. The internet is WAAAAY faster than our old internet. Paranoid that there was going to be hidden fees or an upgrade that I wasn’t aware of I called AT&T and asked what my bill would be at the end of the month ….$99 the lady told me, but since we had cable and internet we got a $10 discount to bring out total bill to $89…just what the salesman quoted me. This is when things got really good. I asked the lady if she knew of any other deals that would be worth my while. This is when she told me that for $40 extra a month we could upgrade our cable to get a total of 400 channels. I politely declined. Then she said… “Oh wait I can get you the 400 channels and a $40 discount for 6 months making your bill total $89 a month.” I don’t need 400 channels, but if they’re free I’ll take them. I wrote myself a note to cancel the extra package in Dec. so I don’t get stuck with a higher bill. Oh yeah, and did I mention we get our fist month of service at no charge and a $100 check for signing up. All-in-all I will end up saving about $250 this year and will have a way better cable package.

My advice to you…. Check with other cable companies and see if you can get them to beat your current cable costs. They will almost always try and work a deal out because they want your business. If there are no competitors or you don’t want to go through the hassle of changing your cable company, at least call your current cable company and tell them you are going to cancel your service because you want to take your business elsewhere. They will offer you some type of benefit, maybe a cheaper bill or maybe just more channels and faster internet for no cost. Try it out. See if you can make your dollar work harder for you!

Take care,