Category Archives: saving

Do Banking Fees Make Sense?

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For years and years, free checking accounts were the rule.  Any bank that charged a monthly fee was the exception.

Now, it seems the tides are turning.  Lately, many banks have been rolling out changes to where free checking gets eliminated without meeting certain conditions, usually by keeping a combination of an average daily balance or having a certain amount of money direct deposited every month.

People who don’t meet these requirements (and even some that do) are understandably upset.  After all, it sucks to have to pay for something that you didn’t used to have to pay for just a month ago.

But, does it actually maybe make sense?

One example I saw is that a bank will offer free checking if you have an average daily balance of $1,500.  This seems like a lot of money, and it is, but put it in perspective:

Would the bank rather handle one customer that has $1,500 balance or fifteen customers that each have a $100 balance.

In either case, the customers require resources from the bank.  They have computer entries.  They require statements to be sent out in some fashion.  Though much of the work done to manage accounts is automated, there are still computer resources that add up when you consider the hundreds of thousands of accounts that some banks manage.

At a certain point, the costs to the bank for a small balance customer may not make sense.  In fact, my guess is that the bank actually counts on a certain percentage of those smaller balance customers to close their accounts after they institute the changes.  From the banks perspective they come out ahead.

Let’s go back, then, to why would a bank have offered them at all?

I think back in the beginning it was to build loyalty.  The hope was that a free checking account could be, in essence, a loss-leader.  They could then use that money losing checking account to offer credit cards or other services that could lead to money making opportunities.  They could build loyalty so that when the customer started making more money, they could offer investment services, mortgages, etc.

That actually makes sense, too.

But, let’s face it, the days of loyalty when it comes to banking are over.  People leave banks for better rates or lower fees.  The web allows people to shop around for the best mortgage rates, the credit card with the lowest interest rate or the better rewards program.  In other words, the business model behind luring a customer in with a free checking account to make money down the line…is probably gone.

And so, then, appears to be the free checking account.

Have you been affected at all by free checking account changes?  Would you be able to meet the requirements if your bank instituted such a change?

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -

What’s The Latest With Amazon Mom?

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It’s been a year since Amazon introduced their Amazon Mom program, where you got an extra 15% off baby items, including the biggest baby item expense of all: diapers!

I signed up a few weeks after the program was introduced and it has been an absolute lifesaver.  I’m curious, though, if anybody that signed up from the get-go knows what Amazon might be doing.

The initial sign-up granted you three months of the extra 15% off items in the subscribe-and-save program (which granted you 15% off to begin with, for a total of 30% off), as well as free Prime benefits so that you could enjoy free 2-day shipping on many items.   You could extend that for up to a full year by making regular purchases in the baby store.  This means that you could earn up to a full year of benefits.

Well, looking at my calender, I can see that we have a few weeks to go, but was wondering if anybody could chime in who was among the first to sign up, which according to what I could see, would have been about a week ago.  Knowing what’s happening will certainly help with planning whether we should buy a bunch of stuff before our extra 15% ends.

I guess I would see Amazon’s options as:

  • Allow more months to accumulate with the same benefits (extra 15% plus free Prime)
  • Allow the extra 15% to continue but remove the free Prime shipping benefits
  • Make you pay to be part of the program, which could get you the 15% and discounted Prime shipping
  • Let it expire altogether, in which case you’d be back to getting a maximum of 15% off
  • Something else

Anybody who’s initial year ran out have any insight on what Amazon is offering?

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -

Unsure What To Do With That Extra Money?

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It seems that at least once a week, I read a post containing a question that basically says “I have extra money.  Should I do x or should I do y?”  The options are usually pretty financially sound things, like “Should I pay off my mortgage or invest?”  “Should I pay off my student loan or increase my retirement contributions?”  “Should I stash the money in my mattress or send it to Money Beagle?”

OK, so I’ve never seen that last one but the answer in that case is clearly: Throw the dog a bone!

In most cases, I first applaud whoever it is for thinking about making a wise decision.  In most cases, there’s no right or wrong answer. Many factors can go into making a decision, such as expected rate of return, inflation, debt aversion, etc.  They’ve all been covered so I won’t go into them here. Instead, I’ll go straight to the advice:

If you’re asking for help in picking between two options, then clearly both hold appeal to you.  If you’re really not sure what you will be happier with, why not try both options for awhile?

Take 50% of that extra money and grow your emergency fund.  Take the other 50% and apply it to your student loans.  Or whatever.  As long as the two things are either increasing your assets or decreasing your debt, we’re cool.  But, if you aren’t sure which is the way to go, go for both!

I figure that you’ll eventually get a feel for which one you want to concentrate on.  If, after a few months, you get more excited by the loan balance falling, then by all means go and tackle that loan.  If you start sleeping better knowing that you have a better emergency fund cushion, then go ahead and build that up until you’re sleeping a full eight hours.

Or, maybe you’ll find that splitting it up is exactly what you want to do, and you stick with that.

Either way, if you’re unsure of which way to go and they’re both ‘good’ options, try both.  My guess is that you’ll find your answer soon enough.

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -

Merry Christmas Savings Time!

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Christmas is four months away.  That’s right, four months.  Now, most of us are probably worried about squeezing in as many cook-outs as possible into the last few weeks of summer (as we should), but it’s also time to start thinking about Christmas.

More importantly, it’s time to start saving for Christmas.

It’s well known that the holidays are the time of year where we spend the most.  This is also, as it so happens, the time of year where we get into ‘trouble’ the most by racking up credit card debt.

So, avoid it!

If you haven’t already, start saving now.

The ideal way to save for Christmas is to estimate your expenses, divide by twelve, and set aside that amount every month.  Then, when the bills need to get paid, you just take the balance of what you’ve set aside, pay it off, and start the whole process over again.

But, if you didn’t do that, it’s still not too late.  You have four months.  That means that you should start putting away one-quarter of what you expect to spend around the holidays.  Today.  Right now.

But what if you can’t afford to do this? Good point. Christmas can be expensive and budgets are most likely tight.  So, if you plan on spending $1,000 on Christmas, that means you should start putting away $250 per month starting today.  If you can’t afford to do that, here’s what you do:

  1. Look for ways you can cut that spending, even a little bit.  Can you and your spouse / significant other cut back a little bit this year?
  2. Save what you can.  Even if you can only put away $50-100 per month, that’s fine.  Every bit will help.
  3. Pay off the balances as soon as you can.
  4. Don’t wait until August next year.  Start saving as early as you can.  Don’t just pledge to do it.  Do it!

With these simple steps, you can be prepared for the financial implications of Christmas without any worries.  It takes discipline and time, but trust me, it will make the holidays all the more enjoyable if you start saving for them.

We’ve been putting money aside every month for the last couple of years to pay for Christmas gifts, so I can tell you that this strategy works and works well especially since we keep a pretty tight month-to-month budget.

Have you started saving for the holidays yet?  If not, when will you be starting?

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -

5 Step Plan To Save Money Today

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Today’s post is a guest post with some helpful tips and information!

What would you do with a spare £100? Put it towards a holiday? Some new clothes? Something nice for the kids? Perhaps you’d even save it, considering the current economic climate. Whatever you’d do with a spare ton in your bank account, it’s sure to make a difference one way or another.

What if said could do it right now, today, in the comfort of your own home? Sounds too good to be true, right? Not if you know what you’re doing, it’s not – from cashing in your coins to comparing boiler cover, there’s a whole host of little tips and tricks to follow. Here’s your five-point plan for a bulging wallet:

1. Compare, switch and save
If you’ve not already got on board with the above mantra, now is the time. Loyalty is rarely rewarded in the home utilities and insurance business, so shop around to make sure you’re getting the best deal, whether this is on your gas, electricity, home insurance or car insurance. Even more niche cover such as boiler insurance cover can usually be found cheaper if you look hard enough.

2. Cash in your currency
Many of us return home from our holidays with spare change, which usually gets left in sock drawers, piggy banks and plastic pots around the home. So have a sweep around your home and get it all together – you may have to pay a little commission, but it’ll be worth it if it puts a few quid back in your purse.

3. Sell your old mobile phone
When you get a new phone, it can be easy to put your old handset to bed in a drawer or cupboard. But there’s plenty of companies out there which will give you cold hard cash in return for your old phone – sometimes even three figure sums.

4. Clear out your garage
Don’t just think about the stuff you own which could be sold as a whole item, such as a bike or table and chair set. But also consider whether any odds and sods can be sold for scrap – there’s plenty of dealers out there in the current climate willing to pay for what amounts to little more than lumps of metal.

5. Rent out your parking space
If you live in a busy town or city where parking space is scarce, renting out your parking space could turn out to be a nice little earner that brings in much more than just a one-off £100 payment.

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -

Does Your Insurance Agent Make A Difference?

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I never really gave much thought to who my insurance agent was.  I have been with Allstate since 1996 when my parents booted me off their plan following my college graduation.  At the time, they were the cheapest I could find with a company name I trusted.

They’ve provided good service and when I’ve comparison shopped my policies a couple times since, I’ve never found a deal convincing enough to leave.

When I first signed up, I was assigned an agent that was most likely closest to where I lived.  At some point when I was living in my condo in the late 1990′s or early 2000′s, I got a letter stating that the agent I was with had retired and I was being assigned to a new agent that was the closest to where I lived.

Whatever, right?

I then got another letter from the new agent welcoming me as a customer.  More whatever, right?  They were all about looking out for my needs and what seemed standard stuff you put in a letter to make sure your new customer doesn’t jump ship.

Except it wasn’t just talk.  This agent has actually looked out for me over the years.

He calls me just to check in.  He sat down and reviewed our policy line by line when we added my wife to the policy around when we got married and again when we moved into our house.  When I call with any questions, both him and the lady that does the ‘grunt work’ both know me by name.

Even though we moved about fifteen miles away, we still stuck with that agent because I felt that they really were actually looking out for us.

Recently, though, they really blew me away.

I got a call from the agent. He was obviously excited about something, so much that I thought he was calling to tell me that he had just finished a marathon or something (which, even though we’re friendly, would have been odd).  But, as it turns out, he had proactively looked at our auto and homeowners policy, ran some numbers, and found that we could increase our coverage without paying more.

Wait, not just avoid paying more, but save roughly 15%.

By adding an umbrella policy over the top of our auto and home policies, we could reduce the liability coverage on those two policies, dropping them in cost substantially, but add it back in and then some with the umbrella policy.  The coverage stays the same.  All the deductibles stay the same.  Our liability coverage actually works in our favor.  The only changes are that we have three policies to pay instead of two and that the total amount over a year will be 15% less than what we paid last year.

Pretty cool, huh.  I did all the research I could.  I reviewed every line on the policies to make sure I wasn’t missing something or setting myself up for a fall later.  So far as I can tell, it’s all on the level!

The 15% stuck out in my head as memorable because of the ‘Fifteen minutes could save you fifteen percent or more’ tagline from Geico.  Turns out, with Allstate, I didn’t even have to spend the fifteen minutes.  My agent did, and I still got the savings.

It’s pretty hard to beat that!

Have you ever had a company go out of their way to save you money when they probably didn’t have to?

Thanks for reading! Please subscribe to my RSS feed, follow me on Twitter, or check out my Facebook page. This original Money Beagle post Copyright 2011 Money Beagle is authorized to appear only on www.moneybeagle.com. Thank you for reading and remember: It’s a great day to be alive! -