PFTD: August 1TRIAL

TRIAL...

PFTD: trial again

trial...

PFTD: Avoid these organizational blunders

trial

PFTD: There is none for the rest of this week

Very busy week at work...I did not post anything yesterday...and likely there won't be any tomorrow...See you Monday!

PFTD: July 25, 2007

Nothing today...very busy time at work !

PFTD: Every situation is personel: Part II

From the same section of CSM

Q: We have credit-card debt of approximately $3,700 and have been paying it off aggressively. But we have an aging car that needs to be replaced, and a baby due in December. We would like to have our debt paid off or close to paid off by November. To do that, we would like to use some of the $12,500 we have invested in mutual funds and a money market fund. Is this a bad idea? We don't have enough in our savings account to make much of a dent in the debt. We also have money in a thrift savings plan that we plan on using for retirement.

A: Everybody should have money set aside for emergencies, and Frank Boucher, a financial planner in Reston, Va., believes that your credit-card balance is an emergency. His advice: Use the money market fund first and convert the remaining funds to money market funds so that they are available for any additional emergencies. "Try to build this up to equal three to six months' of living expenses," says Mr. Boucher. "Once you have done that, you can start investing again – perhaps add to your thrift savings plan or a 529 plan to pay for that new baby's education."

PFTD: Every situation is personel

Financial Q&A section of CSM for this time indicates why same financial advice might not work for everyone...I guess that's why it's personal finance.

Q: I'm 71, retired, and have a fixed income that is modest but more than enough to live on. Would it be advisable to pay off my $140,000 mortgage? I pay 6 percent on it. Average CDs are about 4.95 percent in the $100,000 range. I do have a small mutual fund worth $90,000 and a SEP account designed to last until age 86. We have been using our savings to supplement our monthly retirement activities.

A: If you have $140,000 in a taxable account (not a retirement account) and $140,000 in fixed-income securities (CDs, bonds) in your portfolio, then certified financial planner David Hulstrom, of Woodstock, Ga., believes you should probably pay off the mortgage. Essentially, going mortgage-free is a guaranteed investment similar to bonds but generally with a higher rate of return. The more important question is probably how you'll feel about the decision. Some people are overjoyed to be free of any debt obligations. Others feel poor because their investment portfolios are smaller. In your case, you may have to make some lifestyle adjustments since you'll be drawing down your savings.

Another one coming tomorrow!!!

PFTD: July 20, 2007: Avoid Bonus Protection

US News and WR has an article on this. When checking accounts dip into the red these days, banks are making a lot more green. Of course Congress wants to pass laws on this too...but lets take some personal responsibility and avoid these charges by being careful.

PFTD: When not to listen to your financial advisor

This Yahoo finance article lists three instance when you might want to ignore advice from your advisor. It lists three advices that are more often than not well...wrong:

1. "Lifecycle funds are a lousy investment."

2. "Don't fund your 401(k)."

3. "Your mortgage is too small."

PFTD: Stunning new online savings account

I came across this great new online savings account on the bankdeal blog. I have an HSBC and ING Direct account already so I may not go for it but this one from flagstar even gives free unlimited check writing for life. Thats great but it's unfamiliarity makes me a little nervous.

PFTD: Take advantage of sales tax holidays

Over at another blog I came across the list of sales tax holidays for back to school for various states. For my state here is the schedule:

Florida, August 4th-13th
Clothing - $50
School supplies - $10

$X represents the upper limit of the price of merchandise on which the sales tax would be off.

PFTD-July 16, 2007: Move to Northbrook, OH

Okay...it is not really a tip but what I want to point out that it is on top of the list of most affordable towns in USA. According to Yahoo finance:

"To generate the list, we divided median family income by median home prices. The towns are ranked in order of their home-to-income ratio. And average prices are less than half the cost of hot coastal markets, such as Boston, San Francisco and Seattle."

PFTD-July 13, 2007: Avoiding taxes on investments

On CNN Money there is an old tip about this. Someone asked:
"My husband and I are in our early 30s and we max out our 401(k)s and IRAs. We're looking to invest more money outside those accounts, but don't want to incur a lot of taxable gains. We're debating between index and tax-managed funds. Which way do you think we should go?"


The thing I liked about the strategy was that "...you shouldn't let taxes -- or, more specifically, avoiding them -- drive your investing strategy. Your first priority should be to assure that you've got a well-diversified portfolio for someone your age and with your risk tolerance."
I agree, however, with Dems set to win elections in near future this might change due to higher rates.

PFTD: Investing with insurance-a bad risk

On CNN Money there is a retirement question is answered:

Question: I'm 25, make about $50,000 a year and invest $150 a month in an insurance policy for retirement. I do plan on contributing to my workplace retirement savings plan soon and also hope to open a Roth IRA, but in the meantime my adviser has suggested I increase my investment in the insurance policy to $300 a month. What do you think I should do?

Answer: I'm a big advocate of life insurance. For all practical purposes, it's the only way to assure that a family will have enough money to maintain a decent lifestyle should a breadwinner die.
So to my mind at least, a term life policy should be a core element of almost every family's financial plan. But I'm not a fan of schemes that combine life insurance protection with investing, especially investing for retirement. Usually, the pitch goes like this:

Buy an insurance policy - typically a variable universal policy, although others will do - and have part of your premium pay the death benefit while the rest goes into an investment account that grows without the drag of taxes.Then, instead of just drawing the earnings from the policy at retirement and paying taxes on your gains, you borrow the money instead. The loans aren't taxed, so you've essentially gotten a tax-free return.

Sounds great in theory, but there are several sticking points in reality. For one thing, a slew of marketing, sales and investment fees significantly drag down your returns.And you may not be getting a very good price on the basic insurance protection either. And while the borrowing scheme may seem like an easy enough way to turn taxable gains into tax-free payouts, there are complications there too, the largest being that if the policy lapses after you've been borrowing from it throughout retirement, you could be hit with a big tax bill at a very inopportune time.

PFTD: Bang for your green back abroad

If you are traveling abroad you need all the help you can get because of the weak USD. CNN Money has interesting tips on it. The first one:

"Put it on plastic

Your best best is to use a credit or debit card. A typical cost of €1 after fees is $1.35 to $1.39 You generally get the wholesale exchange rate, which is the best conversion available. (Recently one euro went for $1.35.) Fees tend to be 3 percent or less. Star players are Capital One and Discover. Both are free of exchange fees."

PFTD: Avoid these organizational blunders

Avoid these classic blunders of organizing your personal finances from Yahoo Finance:

1. Neglecting to write a will. Not telling heirs the location of your financial accounts, safe-deposit box and key, and other important items.

2. Throwing away tax returns after a year or two. Save them at least three years -- and preferably six or seven.

3. Saving too much paper. If you do, you may be unable to find what's important when you need it.

4. Storing the only signed copy of your will in your safe-deposit box, instead of giving a copy to your lawyer or other trusted adviser.

5. Neglecting to carry an emergency list of loved ones, doctors and advisers in your wallet.

PFTD: Car buying...2006 models

Bankrate.com has an interesting article for those hunting for new car bargain...It says the cheapest car might be the ones which are 2006 models and believe it or not there are still some left on the lots. There are some caveats listed in the article. I think the most important is the one that says it is only good for you if you plan to keep the car for 7-8 years to cover for the initial depreciation hit that you would take buying a 2-year old new car.

June Expense Report

After months of escaping with a thin hair I screwed up in June. I was 28.33 bucks over my limit of 350 bucks. It was a busy month at work so lots of coffee, bagels, and less time for cooking. Here is the expense report for the two categories I track my spending for:

1. Energy (Electricity and Gas)

2. Eating out and General fun (Cash paid to friends + Card 1 + Card 2)

The outlook for the next month is not as good either...busy month...over 108 bucks in electricity bill. I would try hard, however!

PFTD: T-mobile hotspot@home

In between all the hoopla over i-phone one cell phone news or development remained under noticed and totally unnoticed by me. It is T-mobile hotspot@home...it's wireless network combined with internet telephony. i think it is worth exploring. Look at this NY Times article.

PFTD: Dont follow some of the tips you may come across

I this segment we generally talk about the good tips that need to followed. However, some tips are just not worth it. One of them is what I came across on the web...

"When eating out, reserve half your meal and box it up for lunch the next day. This will save you the time it would take you to pack a lunch and the money it would cost plus calories!"

I am all for take-out and doggy-bag or whatever...However, don't try to reserve it by staying hungry and thats what this tip seems to imply! I mean all this struggle I thought was to be able to be content...

The worst part is that it is one of the contest winner on bankrate.com

PFTD: Happy 4th

Well, Happy 4th Folks!
An interesting idea if you are making payments on your Car.
When the loan is paid off, continue to make those payments into an interest-bearing account (like HSBCDirect). Then after a few years you can buy the next car with cash. Buying with cash can save lots of money. Let yourself earn the interest instead of the lending institutions.

I think it is a great idea for any kind of payments that you make. When the payments are over; you can save that money anyway.

PFTD: Don't pay for bi-weekly payments

I was not aware of it but I came across this tip on planning your mortgage payments.

"Most mortgage companys charge a fee for you to make bi-weekly payments, which can reduce your mortgage term up to seven years on a 30-year mortgage. Instead of paying a fee, add 10 percent to your mortgage payment each month which will go directly to the principal, and will still equal a extra payment each year. Also if you have a tight month you can skip the additional percentage without having to change anything, because it is optional not part of your mortgage program."

PFTD: Put your finance on autopilot

Yahoo Finance has an article on putting your finance on autopilot. It is about taking hassles out of managing money and simplifying it with technology. The only thing that I am crrently not doing exactly as suggested:

"Track your spending. You don't have to be an Excel whiz to craft a budget and watch where your money goes. Wells Fargo Bank, for example, provides a free online spending report for customers. It tracks your online bill payments, credit and debit card purchases then divides them up into 20 categories for you to see where your money is going. It works like a de facto budget, and you don't have to waste time sorting through receipts and categorizing every single purchase yourself.Microsoft Money or Quicken are popular software programs that'll help you do the same thing. You can link them to your banking, investment and credit card accounts to download the necessary information. They also offer a bill-pay feature to help you set and forget your payments."

I am still deciding whether to spend money on a PF software. So far, the answer is NO and I have been trying to the tracking manually.

PFTD: Make your gas work harder

I found the following 4-step way to make the 'gas work harder'.
1. If you have to drive on a freeway, allow extra time and drive at a steady 50 miles per hour when traffic conditions permit -- even if the speed limit is 60 or 65 miles per hour.

2. Keep your tires inflated properly and (3.) empty your trunk.

Doing this should increase your mileage 10 to 15 percent.
3. Finally, bunch your trips so you only drive one day on a weekend.

I would never do the first one; but next three are worth following. I think driving 15 mph below the limit may increase the risk of a crash on the roadway.

PFTD: A tip for filling your gas tank

I was always under the impression that filling up the gas tank was good for gas mileage. I came across a tip on the GMAC bank website which said that you should NOT try to pump in short bursts. Most pumps are not good enough to do this and one can get short-changed in the process. Hence, fill the tank up to the level it gets filled up the first time and just close it up. I think that's right and I would try to implement it.

PFTD: Get your own loan for the car

I have talked about dealing with a car salesman. Today on Yahoo finance there is an article especially tricking the dealer. I think you should always get your own loan and it is emphasized in the article.

"Dealers make money for arranging loans. Based on how risky the customer is, the lender approves a loan at the so-called "buy" rate. The dealer hikes the buy rate to the rate you pay, up to a ceiling specified by the lender, usually a couple of additional percentage points. The difference, called "dealer reserve," is a big source of dealer profit.

There's nothing illegal about it. Dealers and auto lenders have argued successfully in several lawsuits that arranging loans at the point of sale is a valuable, convenient service. And the National Automobile Dealers Association is quick to point out that in independent consumer surveys, most people say they are satisfied with their dealerships."

People should know that the dealership, not the bank or the finance company, sets the final interest rate you pay. "Most people have no idea that the dealer is getting what in essence is a kickback on the loan," Shahan says. "It is an undisclosed conflict of interest." Potentially, the interest rate is even negotiable.

PFTD: i-PHONE

I think it is a public service that I need to do. DO not go and buy that i-phone. Remember the old cliche: Good things come to those who wait. It is going to get better and cheaper thanks to the suckers who buy it on Friday after waiting in line for a long while. All you have to do is not be that sucker...wait up people!

PFTD: Early account closing fee...

I certainly did not know about this fee until I read this article which details several types of fees banks tend to charge. It is the fees for closing your account too soon...say what???


"What it is: Generally, if you close a bank account within 90 to 180 days of when it was opened, you will be charged a fee.

Fee range: In an exclusive survey done in May 2007 of the top 10 banks in the top 10 markets in the country, Bankrate researchers found that the fee for closing a bank account too soon ranges from $0 to $50. The median fee is $20.

How to avoid: Read the disclosure on fees before signing up for an account, or ask how long an account must be opened before it can be closed without a fee. If you absolutely can't wait to break off your banking relationship and there's no maintenance fee or requirements to avoid it, leave a small amount of money, around $50, in the account and take your business elsewhere. Unfortunately, that will only work if there are no fees to siphon money out of your account and put the balance into the negative."

HSBC Direct Interest

I am not sure if anyone has noticed this; but HSBCDirect today credited interest for just 3 days to my account; which is three days after my statement begins. I am hoping they have gone to crediting interest on a short duration may be a week so that we can see our money growing. I would be even bigger fan of HSBCDirect, it that happens!

PFTD: 0% cash advance to fund the IRA

PFTD--June 22, 2007:
Our pals at Braganeering blog ponders this question and has made some excellent points. Two scenarios in which he recommends it:

"I see two basic scenarios (almost all other scenarios equal an automatic NO):

• You expect a large tax refund but don’t have enough free cash now to fully fund the Roth IRA,
• You don’t expect a large tax refund and you don’t have enough free cash now to fully fund the Roth."

Makes sense to me....

PFTD: Acing your credit score

PFTD--June 21, 2007:
CNN Money lists these ways to improve credit score; I did not know that you have to have to your score close to 750...I thought 720 odd was good enough!

PFTD: Online bill paying...

PFTD--June 20, 2007:
I used online bill paying all the time...after all it is convenient and makes life too easy. However, CBS news PF website points out some of the pitfalls one should be vary about (Excerpt from the article):

"Firstly, automatic bill payment is not always "automatic." "In some case you may put it in for the first of the month, but it may not process with the person you owe the money to for five or six days," Hennessey explains. And if you have a short grace period, you will be paying late charges. Set your payment for an earlier date.

Another drawback is fluctuating withdrawals. "Say you are paying your electric bill automatically, you don't know what that's going to be in a given month, and there can be a wide swing," says Hennessey. And when this happens, you could be left short on cash or not have enough to cover the bill. In instances like this, you might be better off paying your bills on a case by case basis online.

And finally, automatic payments are hard to cancel. If you have ever tried to change gyms, you know how difficult this can be. One person wrote in to explain how they had to go to the gym and sign a bunch of papers just to get them to stop automatically deducting their account. "Sometimes they are tough to get out of if you do change your providers," Hennessey says"