Monthly Archives: February 2009

Bank Fees Charged To Unemployed Workers

Posted on by  at  6:00 am
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Talk about kicking people when they are down.  Recent news reports have shed light on several large banks charging bank fees to customers for the privilege of accessing their unemployment benefits.  Many states are partnering with banks to issue funds on a prepaid debit card, rather than cutting paper checks, in an effort to reduce costs.  The problem is banks are then turning around and hitting unemployed workers with fees for everything from accessing their money to calling for balance inquiries.

From a recent Yahoo story:

Arthur Santa-Maria, a laid-off engineer who lives just outside Albuquerque, N.M., said he didn’t pay any fees the first time he was laid off, for several months in 2007. His unemployment benefits were paid by paper checks. He found a new job last year but was laid off again last fall.

This time, he was issued a Bank of American debit card — a “prepaid” card in industry lingo — but he was surprised to learn he had to pay fees to get his money. He asked the bank to waive them. It said no. That’s when Santa-Maria called back to ask how to check his account online. He logged on and saw that the call cost him a half dollar. To avoid more fees, Santa-Maria found a Bank of America ATM at a strip mall and withdrew $80 at no charge. When he got back to his car, he decided to take out the rest of his money — $250 — and deposit it in his bank account.

Afterward, Santa-Maria logged on to his account and saw a charge of $1.50 for two withdrawals in one day.

To play devil’s advocate, most banks do offer a free alternative to withdrawing unemployment benefits.  Customers may walk up to a teller and ask for a cash advance for the full amount on the card, and they should not be charged a fee.  The problem is most people are using the card like a debit card (after all, that is what it is marketed as) and making small purchases and withdrawals all along.

I am not totally against the idea of banks charging fees, after all there are costs associated with operating ATMs such as maintenance, and reconciliation of the funds.  However, it seems that an exception could be made in this case, especially since many banks recently received a portion of the billion dollar bailout!

With passage of the recent stimulus bill, unemployment benefits will receive a boost, which means banks will likely see an increase in the number and volume of these types of transactions.  I would like to see state governments work with both banks and consumers to find an alternative method of transferring money to benefits recipients. 

One idea would be to simply direct deposit the unemployment benefits to existing checking accounts where consumers bank.  Most recently-employed workers are probably familiar with this format anyway as they likely received paychecks via direct deposit before they were laid off.  This would be a more cost-effective method of transferring benefits than paper checks, and would allow unemployed workers to maintain their previous banking relationships and use existing debit cards and ATMs to access funds.

Best Personal Financial Software

Posted on by  at  10:37 am
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When it comes to managing our personal finances with software, I am a real dinosaur.  I still use an Excel spreadsheet to create our budget each month, and record transactions there and categorize them on a daily basis.  Over the last few years I have tried different versions of Microsoft Money and Quicken personal financial software with some success, but I eventually gave up on it because I couldn’t customize things the way I wanted like I can with my Excel workbook.

Having recognized my limitations with Excel, and craving more reports and statistics, I have started a search for new personal financial software.  Rather than relying on ad copy from each product’s website, I decided to poll Twitter followers to get their take.  The majority of followers who responded suggested Mint.com, with Quicken a close second.  I also heard responses pointing me to places like PennyMinder.com, You Need A Budget, and the Dollar Store to pick up a notebook, pencil and a cheap calculator (that suggestion appealed to my frugal side!).

Going into this search for updated financial software I was only consider desktop products because that was what I was used to, but I recognize the benefits of using a site like Mint.com to aggregate all of my accounts in one view, and one package.  From the Mint website:

Mint immediately pulls in your balances, purchases, stock trades, etc. to give you a complete picture of your finances.  Mint connects securely with more than 7,000 US financial institutions, saving you hours of tedious data entry.

Saving time recording transactions definitely appeals to me, and I like the idea of being able to access my portfolio from anywhere with access to the web.  Of course, the paranoid side of me worries about things like password security from my online banking profile stored at Mint, etc.  At some point, I’ll need to get over that because this probably the direction all financial software is headed.

Quicken’s products also appeal to me because I can integrate my home blogging business finances.  For a limited time, Quicken is also offering deals on Quicken products (up to $50.00 off + free shipping).  So now I have a dilemma; should I go with Quicken’s product, should I give Mint, or another web-based utility a try, or should I simply stick with my Excel spreadsheet.  I’m hoping some of you can share with me how you manage the finances, and make some product recommendations in the comments.

Which personal financial software product do you use to manage household finances?

Rick Santelli Rant Roundup

Posted on by  at  6:00 am
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As a fiscal conservative, I have to say Rick Santelli’s rant on CNBC was one of the more entertaining rants I have seen in a while.  Of course, he will be demonized, made fun of, and otherwise marginalized in the national media for days.  Some may question his methods, or disagree with his message, but you have to admire the guy for speaking his mind – something not enough people do these days.


Rick Santelli and the “Rant of the Year“

There are a number of posts floating around on the stimulus package – I mean the latest one.  Sad that we have to now identify which billion-dollar stimulus package we are referring to.  Are you referring to the $700 billion bank bailout?  No.  Was it the $787 billion “stimulus” bill rammed through Congress?  No, not that one either.  Oh, you mean the latest $85 billion mortgage bailout?  Geez.  This is getting ridiculous.  OK, enough of that.  Any more and this will turn into a rant, too!  Here are a few “stimulating” articles to check out.

  • How Much Is A Trillion? Ron breaks down a few examples to try to help us wrap our brains around the idea of a trillion dollars.  It is such a large number that it is hard for most of us humans to truly grasp just how large it is. (@The Wisdom Journal)

Ways To Save Money At Sporting Events

Posted on by  at  6:00 am
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In my hometown, one of the things that my wife and I enjoy doing is going to see our former alma mater battling it out on the basketball court.  I’m sure most can relate to attending a similar event, whether it be your former university, maybe it’s your local sports team, or maybe you live in one of the prime time markets where you’re going to go see a professional team play.  Those that are familiar with this and attend games have realized the cost implications by attending one.  Not only do you have the price of the ticket, you may also have a parking cost.


Photo by SD Dirk

We haven’t even talked about food yet.  Heading to the food counter to get a soda, hot dog and nachos and you’re probably out a good $10-$15 bucks.  For bigger cities, I’m sure you can pretty much double this.  For a couple, the cost might not be so bad; but a family of three, four, five, or six? Imagine John and Kate Plus 8 Going to a game?  Yikes! The cost adds up pretty quick.  Here are a few tips for you and your family to save money while attending one of these fantastic events:

1. Eat before you go.

Just as simple as eating a small to mid-size meal before going should give you a full enough feeling to where you won’t be tempted for those hot dog or nachos at the game.  Just by simply fixing a cold cut sandwich or warming up some leftovers from the night before is an easy savings for you and your family.

2. Pack a bottle of water/soda.

By the second quarter, after the referee has made the third-worst call of the game, your voice is hoarse from the screaming and excitement.  Your throat is parched and it’s time to head to the concession stand.  But do you really need to get that 32 ounce, $5.00 Coca Cola Classic?  Why not pack a bottle of water and/or soda with you from the house to save you the money and also the hassle of having to head to the concession stand to possibly miss that great moment of the game.

The key for this to work is having a wife that’s willing enough to:

1. Carry a big enough purse to hold the bottled beverage.

2. Be cooperative in having to carry the extra weight.

If you meet these two requirements, you are on your way of saving anywhere from $5 to $15 at the game.

3. Pack a snack.

Well, that turkey sandwich that you fixed prior to the game is now wearing off.  Approaching the third quarter the food vendor is staking you having walked by your seat three times now and all you think about is that relish and mustard smothered over that nice and fresh hot dog.  By packing a quick snack, whether it is a bag of pretzels, nuts, or maybe a granola bar; that should hold you over until the end of the game.  Not to mention the fact that it’ll give you plenty of energy to root on your team to victory till the end of the fourth quarter.

4. Don’t go out to eat afterwards.

Hopefully with the pre-game meal and the mid-game snack, you’re not starving and won’t need to head to the local family restaurant.  By not going out to eat afterwards, that is huge savings on the budget.  For a family of three, that’s an easy $30-$40 that stays in the checking account.

5. Watch it on TV

If the game is televised, why not buy some soda, hot dogs, and popcorn at the store and have “game night” at the house.  You’ll still get the benefit of family time if you make a night of it and get all the same food attractions as a concession stand, without concession stand prices.  Also, if you have a DVR, you’ll never miss the “play of the game”.

With over 16 home games over the course of the year, we estimate that to be a pretty significant savings.  Money that could be added to our emergency fund, Roth IRA, or 529 College Savings Plan.  Nothing like boosting your nest egg and still rooting on your team!

This was a guest post by Jeff Rose. Jeff Rose is an Illinois Certified Financial Planner(TM) and co-founder of Alliance Investment Planning Group. He is also the author of Good Financial Cents, a financial planning and investment blog. You can also learn more about Jeff at his website Jeff Rose Financial.

Eliminate Credit Card Debt Without Bankruptcy

Posted on by  at  6:00 am
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Even tasks as challenging as eliminating credit card debt can be boiled down to less than a dozen steps.  Notice I called them simple, but that doesn’t mean they are not difficult to follow through on.  It will take sheer determination, and a lot of sacrifice, to see all those credit card balances go to zero. However, eliminating credit card debt is one of the smartest financial moves you can make, and you can do it without filing for bankruptcy.

Before you even begin the steps below, there is one important task to complete.  Identify why you want to be debt free. Saying you want to be debt free is not enough, you must identify why you want to be debt free.  For me, it was because I was tired of not having options. Credit card debt forced me to stay in a bad job longer than I should have.  Debt forced me to skip out on opportunities because I just couldn’t afford to take the risk. Once you have identified your “why” move on to tackling the steps below.

Ten Steps To Eliminating Credit Card Debt Without Bankruptcy

1. Save three months of expenses in an emergency fund.  You may be asking yourself, “I thought this was a list of tips for getting out of credit card debt?”  It is, but to do so you must first create a cushion between you and the emergencies currently financed on your credit cards.  I didn’t take my own advice here when I first started my journey for debt freedom.  It wasn’t long before our home’s air conditioner broke, my car’s brakes began to fail and I was forced to run up debt to make repairs.  Back to square one. 

My second attempt began with saving up three months of expenses in a savings account.  Not $1,000, not $5,000, but three months worth of expenses; no more, no less.  This provided a buffer for future emergencies so I could avoid resorting to credit cards to finance the inevitable hiccups that happened along the way.

2. Take an inventory of your debt.  Once you have identified why you want to get out of credit card debt, and have saved an adequate emergency fund, you will need to list all of your credit card accounts.  Include the account number, current balance, interest rate, minimum payment, credit limit and contact number. This is a painful step, because most of us walk around not really knowing exactly how much we owe.  We have some idea, but it usually significantly less than the actual number.  Finding out the actual amount is kind of like having a bucket of ice water dumped on your head.

3. Contact each credit card issuer’s customer service number.  Take a deep breath, dial the number and walk through the verification procedures.  Then explain that you are in the process of consolidating cards and would like your account reviewed for a lower interest rate.  If they decline, ask to speak to a supervisor and repeat your pitch.  If they decline, thank them and hang up.  Resist the temptation to close the account at this point, no matter how angry they make you by refusing to lower your interest rate.  You will be calling back to cancel the credit card soon enough.

4. Now try to consolidate as much of the high interest debt to cards with lower interest rates.  You may have to visit the card issuer’s website you want to move money to, or contact their customer service department again to request a balance transfer.  Ask if there are any balance transfer fees associated, and ask to have them waived as a one-time courtesy.  Some banks will waive the fee, some won’t.  Consider this 18 month promotional balance transfer offer from Discover® More Card. It doesn’t hurt to ask, but don’t let it be a show-stopper. 

If a balance transfer is not available, consider a low-interest consolidation loan from a social lending site like Lending Club.  At this point we are interested in getting as much of your debt as possible to lower rate cards.

5. Get angry. I mean get angry at that credit card debt staring up at you.  At this point you are half way through the ten steps to paying off your credit card debt, but the trail ahead is about to get much steeper.  Take another look at your spreadsheet.  How many dreams have been put on hold by that number?  How many sleepless nights have you stayed awake worrying over that number?  Do not suppress your anger.  Harness it. Use it to get fired up about this plan to pay off your credit card debt, once and for all.

6. Cut up all but the card with the highest available credit.  You are deep in a hole, and it is time to stop digging.  Grab the sharpest pair of scissors you can find, and set up your cards in firing squad fashion.  Set aside the card with the highest available credit – you will keep this one in a sock drawer at home for emergencies until all your debts are paid off.  Cut up all the other cards, and be sure to clear their numbers from any online store you frequent.

7. Reorder your list of debts, putting the smallest debt at the top.  Put a big “#1″ next to it.  Write its name in bold.  Highlight the amount.  Draw a big bulls-eye next to it.  Do whatever you have to do to put the focus squarely on that credit card account.  Imagine that card sweating under the lights in a police holding room.  It is guilty of robbing you of your dreams, and it is going down!

8. Throw every single dime you can find at debt #1. For this step I opened up another free checking account at my bank and tossed every bit of found money in it I could find.  Loose change, birthday and Christmas gifts, and proceeds from sales of my CD collection on eBay all qualify.  Consider taking on a part-time job, or starting a side hustle like mowing lawns or painting house numbers on neighbors’ curbs.  Every single extra penny goes into this account, and at the end of the week transfer the exact balance in that second account to the credit card with the lowest balance.  You may want to do it every other week, but don’t wait an entire month – you’ll pay slightly more in interest at the end of the billing cycle.  Some weeks it might only be an extra $17 payment, others may be as much as $85.  No amount is too small to getting you closer to getting out of debt.

9. Close your paid-off credit cards.
9a. If you are planning to buy a home, skip to step 9b. When the balance reaches zero, and you have paid off the entire balance for that credit card, call the issuer again and close the account.  Immediately follow up that phone call with a letter to the issuer’s correspondence address asking that the account be closed, and ask for a written confirmation.  I know the card has sentimental value.  Maybe you opened it in college, or it has a picture of your dog on it.  Tough.  It has to go.  You just don’t need the headaches associated with carrying a wallet-full of credit cards.  Debit cards and cash spend just fine.  Repeat step 9a with all but your last credit card.  When your last credit card balance reaches zero, move on to step 10.

9b. This step is for those planning to buy a home after they are debt free.  Closing a credit card account, even if it is paid off, can have a negative effect to your FICO score.  If you are considering applying for a mortgage in the near future, it is a good idea to leave your credit card accounts open, particularly accounts you have had open for many years.  Length of credit history is an important factor in calculating your score, and by closing older credit cards you are effectively lowering the average age of your active trade lines.  You have already cut up the card, canceled any automatic billing and removed it from your online shopping profiles, so just let it sit for now.

10. Put away that final credit card.  Presumably, this last credit card was the one with the highest credit limit and the best interest rate – that’s why it is last in the lineup.  If that is in fact the case, tuck the card away some place safe around your house.  Maybe stash it in a sock drawer, or locked away in a safe or lock box.  Wherever you decide to store it, just be sure it is not in your wallet, unless you are traveling and need to take it along for emergencies.  Keep this card around until your fully-funded emergency fund is in place, at which point you can consider yourself “self-insured” against future emergencies.  At this point you may decide to keep the card to score rewards points, or scrap it.  It’s up to you.  Me?  I say dump it.  Who needs the hassle?

If you are like me, you have probably been accumulating debt for years, but now it is time to stop.  Draw a line in the sand, and vow to never cross it again.  It is time to start living the rest of your life debt free.  Living without debt reminds me of being a kid again and pedaling your bicycle like crazy to climb that tall hill in your neighborhood.  Just when you think you can’t spin those pedals another turn you see the top of the hill.  You crest the top of the hill in complete exhaustion and then begin to descend the other side, wind blowing in your hair, the sun warming your face as you look up and smile.  That is the feeling of living debt free, and I can’t wait to coast down that hill again soon.  How about you?

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