Wheaties for Your Wallet

Good reading for November 5th:

• The $915 Billion Bomb in Consumers’ Wallets - “Last month, as banks reported their worst quarterly results since 2001, concerns about rising credit card delinquencies began to make their way onto earnings announcements alongside mentions of subprime woes.”

Good reading for October 28th:

• Springwise: Bank run by street kids in New Delhi - “[I]n … New Delhi, India, … more than 1,000 street children have joined together to create a bank that helps them manage the small sums they earn each day. Launched in 2001 by a volunteer aid group called Butterflies, the Children’s Development Bank aims to empower children in several important ways.”
• For Those Born Rich, Lessons in How to Stay That Way - New York Times - “Teach them to rise above small things and look at the overall goal or problem.” Advice from rich parents to their kids — applicable, in part at least, to all of us. Goals are a great way to keep focused on money!
• Fight Thieving Restaurant Servers With Checksum Tips | Punny Money - This has been linked to a lot, but it’s an interesting way of tracking your money. A lot of work, but it would be easy to make a Wesabe API client that would do this for you automatically.
• Military Money - This blog by a Wesabe member stationed in Iraq has great advice in general, and especially for people in the military and their families.
• Living paycheck to paycheck gets harder - Yahoo! News - “Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills.”
• Mortgage industry facing more troubles - Yahoo! News - “In all phases of the mortgage industry this week, from the people who make the loans to the people who insure them, the news was bad — and most of them expect it to get worse.”
• Credit contagion infects your wallet - MSN Money - “My worst nightmare about the collapse of the subprime-mortgage market is coming true. The horrors let loose among mortgage borrowers and lenders by falling housing prices have begun to sink their fangs into the market for auto loans and credit cards, too.” (via Wesabe user Rob the Ordnance Soldier)
• Rate Chasers Are Online and Moving Cash - New York Times - “Rate chasers, they call themselves: savers who hunt for the best interest rates at banks and credit unions and quickly move their cash from one account to another.”
• Overdrafts: US Bank To Let You Opt-Out Of Overdraft Protection - Consumerist - “US Bank will let customer opt-out of automatic overdraft protection. This would mean that if you bounce a charge, you just get charged an NSF fee instead of your account going negative, incurring additional fees, and increasing the likelihood of more checks and charges bouncing.”

Good reading for October 11th:

• Consumers to Get Some Relief on Overdraft Costs - Kiplinger.com - “Overdraft fees have morphed into a big money-maker for lenders, exceeding $19 billion this year — up 85% from 2004.” (via Consumerist)
• Complaints: Discover Randomly Raises 400,000 Members’ APR “To Remain Competitive” - Consumerist - “Discover card holders, check your bills. You may be one of 400,000 lucky members getting their interest rates significantly increased for no apparent reason.”
• Credit Cards, Banks Offering Cash Back for Money Spent | SmartMoney.com - “Banks and credit-card companies are offering all sorts of products — from checking and money-market accounts to credit cards — that can help you improve your bottom line every time you deposit cash in an account or buy something using your credit or debit card.”
• Getting Going - WSJ.com - “Forget the quaint notion that you should have your checking account, credit card and savings account all at the same bank. Instead, look to cherry-pick the best of these accounts — with the goal of sidestepping fees, piling up credit-card rewards, earning extra interest and building a great credit score. Sound like a lot of work? It doesn’t have to be.”
• 6 Things STAR WARS Teaches Us About Our Money - Alan Haft - “Where do you go for investment advice? A financial advisor? CPA? Jim Cramer? Suze Orman? Maybe the retired guy down at the pool? What about Yoda? Ever consider him?” (I am contractually obligated to post this….)
• Using Highrise to conquer customer service problems - (37signals) - I totally agree with keeping notes on customer service interactions (as I said below in the Browser Snapshot post). Highrise is a great tool for this.

Good reading for October 9th:

• Banks scarier than criminals for many, survey finds - The Red Tape Chronicles - MSNBC.com - “A new survey indicates that many consumers are more worried about banks raiding their accounts than criminals. Consumers are five times more likely to switch banks because of hidden fees than security concerns…” Hmm, seems like a false comparison.
• Wesabe: Spend Smarter: Working parents with daycare bills - Great thread on finances and childcare in Wesabe Groups. @seadeapea’s post is full of fantastic suggestions.
• 10 Ways to Build the Habit of Saving Money — Get Rich Slowly - “What works in the long-term is understanding your spending habits. Once you understand, you can change by building new habits. That’s how you become a money saver.” Great post! This is how we’ve designed Wesabe — not for complete automation but instead for complete understanding.
• Mrs. Micah: Finance and Life: Selling and Sucking your Soul: Ethics and Finance - “Recently, I had the chance to let payday loan people advertise on my site. […] All I could think of was ‘They earn their money by exploiting people.’ It’s like a guy who does child prostitution wanting you to do his taxes. Nope.” (via The Finance Buff)
• 401(k) Loans: At Your Own Risk - WSJ.com - “Despite potential tax and investment consequences, more individuals have been borrowing from their 401(k) plans or taking hardship withdrawals in recent months, some retirement-plan providers say.” (via Ka-Blog)
• Bankrate: Pay more, get more debit rewards - “Debit cards continue to be the card of choice for many consumers when it’s time to pay for purchases. […] perhaps consumers […] appreciate not receiving a fat credit card bill at the end of the month.” (via Payments News)
• Making Sure Your Stores Guard the Data - WSJ.com - “…shoppers are pretty much left in the dark if they want to know if a store is keeping their credit-card and debit-card transactions secure. There are a few things savvy consumers can do to check up on a retailer’s security practices before practices before plunking down their plastic.”

Good reading for October 6th:

• When a Bank Closes - Kiplinger.com - “The NetBank case shows how well the Federal Deposit Insurance Corporation (FDIC) can work.”
• ING to downgrade Netbank accounts | Shawn Parr - “Well, some of my fears regarding this whole Netbank shutdown are starting to come through. I now have confirmation from ING that they will be removing features from accounts when they have fully taken them over.”
• Alternatives for Those Without Retirement Plans | SmartMoney.com - “If you’re one of the millions of people without a retirement plan, don’t panic. You do have options.”
• Common Sense and Credit Cards - New York Times - “After years of looking the other way, Congress seems finally poised to rein in the predatory practices that have become all too common in the credit card business.” (via Payments News)

Good reading for October 3rd:

• Mind control guru can pay with blank sheets of paper - “No-one would dare pay for an item with blank paper, and because Mr. Brown keeps your mind busy your primal brain kicks in and concentrates on language rather than something more obvious. The result is that Mr. Brown can pay for almost anything with nothing.”
• Using Quicken to Analyze and Correct Bad Spending Habits - Get Rich Slowly - “No matter how smart my money choices, I’ve made it a priority to keep detailed records of my finances. Tonight I dug through four years of Quicken data to see if my comic book spending habits have changed.”
• Bankrate’s 2007 Checking Study: Fees up again - “Bounced-check fees and ATM surcharges for all checking account types have reached new highs — again.”
• The Finance Buff: Missing Name on Forbes 400 List - “Over the years, Vanguard investors saved billions of dollars of mutual fund management fees. The billions of dollars that went to the owners of Fidelity, Franklin, and all other mutual fund management companies, didn’t go to Mr. Bogle. He only drew a salary.”
• Consumer Reports Survey: More Than 90 Percent of Hagglers Scored Better Prices - Via Consumerist: “More than 90 percent of shoppers who tried to negotiate a better deal on goods and services including furniture, electronics and appliances, floor and demonstration models, and medical bills got one…”

Good reading for September 14th:

• ConsumerReports.org - The dark secrets of debit - Very important article on the use of debit cards and the risks that go along with them. Required reading!
• What Do You Do If A Credit Card Employee Calls You? — Blogging Away Debt - Via Consumerist, this is a great list of tips to avoid being scammed by a phone caller posing as a credit card company representative.
• The Finance Buff: Life Insurance: What to Buy - More from The Finance Buff on life insurance.
• The Finance Buff: How to Buy Life Insurance - The first of two great articles from The Finance Buff (a great site overall) on life insurance.
• Tools: The Zero Based Budget - Consumerist - Looks like a great tool.
• Ads touting risky mortgages still plentiful - The Red Tape Chronicles - MSNBC.com - “Despite the implosion of the “exotic” mortgage market, advertisements for risky home loans can still be found all over the Web.”

Good reading for September 6th:

• The Dirty Secret of Campus Credit Cards - “Students assume that if the university has an affinity contract with a bank to offer a credit card, the university will surely look after them … But these contracts are really money-makers for the school, and not about services to the students.”
• Foreclosure Notices Hit Record in Spring - New York Times - Sad news.
• Apple - To all iPhone customers - Steve Jobs makes the iPhone price cut partially retroactive for early iPhone buyers ($100 Apple Store credit).

A couple of months ago Wesabe moved from a free office in Berkeley (above my wife’s clothing store) to a much nicer office in San Francisco. We did it because we were busting out of the seams of the free space, and still hiring like crazy. I was especially happy because I hadn’t been able to spend much time working in the tiny Berkeley office with our engineering team. Understandably, they didn’t want to listen to me talk on the phone most of the day, so I usually worked from home.

After the first week at the new office, I started thinking about the fact that I had purchased my lunch every day. I also noticed a surge in my transportation spending:

$6.00 a day for lunch ($1500/year)
$6.30 a day for BART ($1575/year)
$84 a month for a parking pass, since some days I need my car for meetings ($1008/year)

Total: $4083 a year

Wow! That is a big swing in the budget. There isn’t a lot I can do about transportation costs, but I do have control over how much I spend on lunch (we have an espresso machine at work…so fortunately I’m not also dealing with the latte factor). Over the weekend I bought some meal storage containers at Target, and last night packed up leftovers for my wife and I to take to work.
I just created a new group on Wesabe called “Pack a lunch”…you are welcome to join. My goal is to spend an average of $2 a day on a packed lunch – that should save me about $1000 a year. If I can make the lunches tasty enough that my wife will also eat them, I can double our savings.

The thing I’ve noticed about making money stretch is that it involves choices. When our circumstances change…the way we live often changes as well. It was easy enough to adjust my habit of eating a sandwich at home to eating out, but it sure cost a lot more money.

Good reading for September 3rd:

• Save, Save. Don’t Splurge on a Piggy Bank, a Tin Can Will Do. - New York Times - “Saving money is not the sexiest financial move, but it’s probably the most important. So start squirreling. Even if it’s the change from your pocket. Start incubating a nest egg, which is not just for retirement.”
• ConsumerReports.org - Best & worst credit cards - “Credit unions are run by members, so they have a vested interest in providing credit at very low rates … And they are more focused on keeping their members happy, while banks have to worry more about keeping their investors happy.”
• Plugging The Money Leaks: 10 Stupid Ways That Smart People Waste Money - Consumerist - This is a good basic checklist for money that leaks out of your accounts. Of course the solutions won’t work for everyone, but post this on your fridge and it may help.
• A Way Out of Debt by Way of Iraq - New York Times - “‘I came to the realization that I was so far over my head, I had to do something drastic to increase my cash flow,’ Captain Sloan said by telephone from the Green Zone, where he now receives extra pay and has minimal living expenses. ‘Iraq did that.’”