Queercents

Once you’ve started saving money, one of the best ways you can follow through is by tracking compulsively: what you’re making, what you’re spending and how you’re spending it. Of course, like everything else about saving, it’s easier said than done. For some people, all you need to do is keep track of receipts, but if you’re getting a receipt for every single purchase (even if it’s a single pack of gum), sometimes that’s just too many receipts to handle, particularly with the subsequent clutter.

If you’ve made the commitment then, there certainly isn’t a shortage of bloggers offering up advice about tracking expenses: Nina has a thorough article on how and why to track expenses, and J.D. at Get Rich Slowly also weighs in, and there are more if you poke around. Approaching an oft-covered topic is tough, but for me there are some advantages that I haven’t seen covered. Of course, there’s the obvious role of making sure I stay on track for shunting money into my high-yield savings account, but mostly I like to track my spending so I can manipulate my buyer’s remorse to my advantage.

Ok, so most of the time it’s not “real” buyer’s remorse: a lot of times these purchases are less than ten dollars, so not a big deal, right? A tenner is a meal out, so that’s not bad… Once I started tracking my expenses though, I realized that I was making more of these purchases than I realized. They weren’t getting me in trouble: with my system of reverse budgeting I was still saving what I had planned to. The problem was that I was still making purchases that were unnecessary, sometimes for the novelty of it, which can be a bad habit to get into. Read the rest of this entry »

Last week I compared CDs to online savings accounts and pointed out that the interest rates on CDs at brick and mortar banks are about the same as the interest rates for an online savings account. So for the short answer, in terms of interest rates, no they’re not really worth it.

CD’s, by the way, are Certificates of Deposit. Unlike savings accounts, where you can access your money at any point, you can only withdraw from a CD during a certain time period without a penalty. HowStuffWorks has a good rundown of just what a CD is, and if you should consider opening one, saying:

A CD is good idea when:

* You have money you won’t need for a while
* You can get a better interest rate than with other types of savings
* You don’t want the risk of other types of investments

Comparing the rates of online savings accounts, and even online CD’s, to brick-and-mortar bank CDs generally give interest rates within a half a percentage point. (To see if that makes a difference in terms of what you’re depositing, you can use The Simple Dollar’s Guide to Calculating APR and APY ) The question then is does the added interest make up for the inconvenience of a CD? Read the rest of this entry »

From my post on budgets, you would think the answer is yes, and you’d be right. Partly. I certainly wouldn’t be the first to point out the most attractive feature of online banks: better interest rates. Over the past two years, the main trend I’ve seen is that most online savings accounts have interest rates that for the most part rival CDs.

Two years ago, interest rates for a CD were in the low fives (mine was a special rate of 5.25 APY) and online savings accounts were high fours and low fives as well. Now CDs are in the three percent range and so are online savings accounts. Of course, the question here isn’t between the two types of accounts (CDs or online savings) but is the monetary return in interest from internet banking enough to make it worthwhile?

A friend of mine once joked that you’ve mastered the liberal arts education when you answer questions by responding “Well, it could be this but it could also be that and the only answer is there is no right answer” at which point you throw up your hands in surrender. And I have to say that, as unhelpful as it may be, my answer to the question of internet banking is something along those lines. Yes, your money should be working for you, but there’s also something to be said for the price of piece of mind. Read the rest of this entry »

NSF fees. Also known as Not Sufficient Funds fees, they’re the fee that the bank takes out of your account when you try and take out more money than you actually have. Overdrafting or overdrawing your account is the technical term for when the withdrawal exceeds the available balance. If that sounds complex, Wikipedia has a breakdown of what that means.

As a bank teller, NSF fees are one of the worst ways I’ve seen money leaving peoples’ accounts. Your money should be working for you, rather than increasing your bank’s profit margins. From service charges, to account maintenance fees, to NSF fees, fees are one of the ways a bank makes money. And NSF fees aren’t small either; they’re approximately 20 to 40 dollars, depending on your bank. They also can add up quickly. Fortunately, there are ways of avoiding them.

The Nitty Gritty Bank Policies Explained
Here’s a checking account primer on check holds, because even if you’re good about balancing your check book, you may not remember to account for the holds. It’s pretty tedious, and even though banks are required to disclose this information, not everyone is aware of it. So here’s the breakdown: Whenever you’re depositing money, the bank can put a hold on your account, depending on what you’re depositing. (Don’t worry though, banks can’t lock up all of your money, no more than deposit amount.) This is to protect the bank in case there’s something wrong with the deposit. Read the rest of this entry »

Since becoming single again, one of the things I’ve noticed is that most writers posting on about saving money on evening entertainment celebrate staying in. A night at home may be a great way to relax and recharge–I love cooking dinner and watching a movie or reading a book as a way to unwind– but I also love getting out and meeting people. A night at home watching movies or reading books you own (or have borrowed from the library) and eating a home cooked meal is much cheaper than a night on the town, but there’s definitely something to be said for having a great evening socializing.

I love Gretchen Rubin’s blog The Happiness Project, and her commandment to “Spend Out” is both profound and simple. One reading of this commandment is that money spent on social activities is like an investment in your happiness: spending an evening in the presence of people whose company you enjoy is difficult to beat. Done sensibly, in my opinion going out is definitely money well spent, particularly if you’re looking to meet girls (or boys).

Going Out on Less
Even though I love to go out, and think it’s worthwhile, sometimes a night out can feel like you’re hemorrhaging money. I love going out, and I love going out often. But there’s the food, and the drinks, and the gas for the round trip….it all adds up quickly. So then what to do? One quick and easy way to shave money off your nightly bill is to plan to avoid establishments with cover charges, but I also use two other methods to keep my costs down so I can afford to go out more. Read the rest of this entry »

One of the things my mother always told me about savings is that your money should be working for you. This means that if you have a sizable account balance, it shouldn’t just be sitting in a checking account earning a tenth of a percent interest. Even if you have the FDIC maximum balance, you’re only making around hundred dollars a year, depending on your banks interest rates. Clearly, your money isn’t working for you. With a little time invested in setting up and organizing your accounts though, you can get more return on your money.

Checking:
Even though they don’t have great yields, if they offer any interest at all, checking accounts are something of a necessary evil–especially since I associate them almost exclusively with paying bills. There are some better options though: online checking accounts offer substantially better interest rates, typically around 1-2%. And because online banking is a free service linked to accounts, you can set up online bill pay where checks will be made for you for free (since my bank charges for books of checks, that’s a minimum of twenty dollars saving a year). If you’re not willing to switch to internet banking, it can be worthwhile to ask if there are better interest rates available. If you’re bringing a modest balance and are “new money” (meaning you don’t have any previous accounts at the institution), banks may be willing to get a higher interest rates for you. (Though this is particularly true of CD’s, there may be good rates that aren’t being advertised, and some banks may match competitor’s banks if they want to retain customers.) There are also higher interest rates for maintaining higher balances, if your lifestyle permits you to do that. Read the rest of this entry »

This fall my brother is about to start his first year at college and asked me the other day about what to do about getting his accounts set up and how much money he’d need. Now my brother is just about the coolest kid around; as a fifteen year old straight guy in high-school, he went to all of the meetings for the GSA I started and even designed the club t-shirts, so of course I was willing to help him try and get his finances organized so he’d be prepared for whatever freshman year could throw him. This will be the first time he’s had to worry about money since someone else has always managed his accounts, so he was pretty much starting from scratch.

Setting Goals:
It helps to have concrete goals to save for as motivation. Otherwise, it’s easy to cave in to the constant barrage of advertisement to buy stuff, stuff and more stuff. I’m fighting the urge to run out and buy a fingerboard because I know that I can build something comparable for a fraction of the cost. Having a specific goal to save for gives you something to visualize when you’re deciding whether or not you’re going to make a purchase. Read the rest of this entry »