Archive for May, 2010

Are You Making These Checking Account Mistakes?

Posted By damien on May 24th, 2010

Checking account

Welcome to Money Mistakes Week at Bite Size Idea!

This week we will examine the three most important financial accounts everyone needs to own.  We’ll talk about mistakes you may be making with your checking, savings and investment accounts.  We’ll look at ways to squeeze the most money out of each and put you in the best financial position possible.

Today we are looking at checking accounts.  There are TONS of sneaky and not-so-sneaky ways that banks try to stick it to you when it comes to checking accounts.  Fees, courtesy charges, surcharges, or whatever fancy name the bank puts on them, they all boil down to ways the bank takes money from your account and puts it in theirs.

Here are some of the most common mistakes you may be making with your checking account:

1) No ATM Fee Refunds

Does your bank refund you fees when you use a competitor’s ATM?  Did you even know that was possible? Most of the big guys won’t do it, they say:

Use our ATMs only. If you don’t, we cannot be responsible for the fees you incur. Take that sucka, thanks for banking with us!

No, that’s not a direct quote from a bank executive. Yes, I made it up.  But come on people, I’m trying to make a point here!  My bank, like most others, will refund my ATM fees up to $25 every month.

If your bank is not refunding you for ATM fees, do yourself a favor, dump them and use my tools to find a new one.

2) No Direct Deposit

Are you one of those people who, every payday, waits impatiently for the paychecks to be handed out, clocks out at exactly 5:00 pm, then rushes to the bank in hopes of depositing your money before they close for the weekend?

I’m not laughing at you, really I promise I’m not…I just feel bad that you are stuck in the 90s.  Nowadays, you can set up direct deposit with your employer.  This means that your paycheck is quickly and electronically deposited into your account.

No paper checks. No rushing to the bank before closing time.

Now, in order for this to work, two things need to be in place: your employer needs to offer direct deposit (ask your HR rep) and your bank needs to accept direct deposit (call them or check their website).

If your bank does not accept direct deposit, do yourself a favor, dump them and use my tools to find a new one.

3) No Free ACH/EFT/Bill Pay

ACH (Automated Clearing House), EFT (Electronic Funds Transfer) and Bill Pay are all names for pretty much the same thing: the ability to transfer money electronically from one bank account to another.  Direct Deposit is a form of EFT.

Do you have recurring payments, such as mortgage, rent, utilities, etc?  Are you still writing checks every month and mailing them in?

Hehe. OK, maybe I’m laughing a little bit now. EFT (or “Bill Pay” as my bank calls it) is an awesome way to automate your regular payments.  Every bank is different, but mine has a slick web interface for setting up bill pay.  My bank also offers free bill pay as long as I have at least one monthly recurring payment (rent).

If your bank does not offer free EFTs, do yourself a favor, dump them and use my tools to find a new one.

4) No Online Banking

The internet offers wonderful ways to access information without talking to annoying people.  Annoying people like bank tellers and automated phone messages that try to sell me a new service every time I ask for my account balance.

No, I don’t hate bank tellers, they are people after all just looking to get by.  But if I can avoid their salesman tactics when getting information about my checking account, I’m all for it.  Online banking offers that escape.

With online banking, in theory, you can do just about everything you could in a physical branch. Get your account balance.  Review transactions.  Some even offer to deposit checks by taking a picture, scanning and uploading it.

If your bank has a crappy website, do yourself a favor, dump them and use my tools to find a new one.

5) Fees Up the Wazoo

I have no idea what a wazoo is, but if you have fees up there, it hurts.  They go by all sorts of names: fee, service charge, surcharge, take-this-sucka charge. Banks find every opportunity to tack them onto your checking account.

Monthly service fees are the most prevalent and offensive.  I just don’t understand them! The bank says:

I will take your money, use it to make more money (by offering high-interest loans to other customers), and also charge you to let me take your money. Take that sucka, thanks for banking with us!

(Once again, not a directly attributable quote.)  The point is, the bank should be thanking you for loaning them your hard-earned money!  Instead of charging you fees, they should be paying you to bank with them!

Enter the high-yield (or “rewards”) checking account.  If your bank is not offering you a return on your checking account, do yourself a favor, dump them and use my tools to find one that does.

Let Your Mistakes Be a Thing of the Past

Please, please, do not be reluctant to dump your bank in favor of a better one.  You are not married to your bank. So many people open a checking account in their teens and just live with it for the rest of their lives.

To them I say:

Lazy, scared bums! Get off your rear, do a little research, and save yourself money and time by switching to a better checking account!

And that, my friends, is a direct quote.

Posted in Building Wealth
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Expand Your Mind with 6 Awesome TED Talks

Posted By damien on May 22nd, 2010

Constant Learning

The cap has been thrown, the handshake from the Dean received, and the diploma’s in the mail (at least, that’s what they tell me). Now that my formal education has come to an end, where do I go from here?

How can one keep expanding his/her mind without the lectures of professors and hours of homework?

Enter TED. TED (which stands for Technology, Entertainment, Design) is a non-profit foundation that hosts talks from smart people offering “ideas worth spreading”.  This week I’ve been watching lots of talks, hoping to experience the enlightening effects of an expanding mind.

Here are some of my favorites.  Just a warning, this is a PG-13 rated post, as some of the videos have mild language. Enjoy!

Tony Robbins On Why We Do What We Do

Tony explains the hidden forces that cause us to make decisions, become motivated, and achieve.

Barry Schwartz On the Paradox of Choice

Perhaps my favorite TED talk so far.  Barry breaks down choice paralysis and challenges underlying assumptions of freedom.

James Randi’s Fiery Takedown of Psychic Fraud

This guy is funny, from his beard to his mannerisms. James hates all things metaphysical and non-scientific.  At least watch the video to see him down a bottle of sleeping pills!

Michael Shermer On Strange Beliefs

Michael demonstrates a marijuana dowsing-rod and how to fake a UFO picture.

Derek Sivers: How to Start a Movement

Derek explains that, when starting a movement, the first follower is much more important than the leader.

Arthur Benjamin Does “Mathemagic”

Behold the power of the human calculator. Art demonstrates the usefulness of mnemonics.

What are some of your favorite TED talks?

Posted in Selp Improvement
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Graduate Debt-Free: 6 Steps to Beat Student Loans

Posted By damien on May 20th, 2010

Grad with Debt

As you can read in my welcome message to the right, I recently graduated debt-free from college.  It’s one of the claims I use as evidence that you should give some weight to my money advice.

I’ve received a few requests asking how I did it.  Was there a magic bullet? A secret that the debt-ridden masses don’t know about?

Well, no, not really.

Wish I could say that I have a secret, the secret to graduating without student loans.  For me (and my wife), there was no one method that helped us graduate in the black.  It was a combination of many factors.

I’ll tell you exactly what we did and the awesome thing is that you can do it too.  This post is not me bragging about how great I am.  In fact, after reading, all of the magic will be gone and you’ll think, “That’s all he did!?”

Every step we took can be used by any of my readers.  Without further ado, here they are, the steps we took to graduate without any debt:

1)  Attend an Affordable School

Thanks to my religious affiliation, I was able to attend an awesome private school (Brigham Young University) for a great price.  Tuition was less than $3,000 per semester.

Now, I understand that you may not be able or even want to attend the school I did.  That’s not my point.

My point is that in order to graduate debt-free, attend an affordable school.  Many public universities offer awesome educations for cheaper prices.

Your college education is so much more than just name-dropping on your resume.

2) Apply for Financial Aid

Let go of your pride and apply for FAFSA.  It never hurts to apply; maybe your family makes too much, but maybe they don’t! My wife and I received lots of financial aid in the form of Pell Grants.

3) Get Married!

I married my wife because I love her and knew I wanted to spend the rest of my life with her.  The financial benefits of marriage had nothing to do with our short 3-month engagement…well, maybe just a little…

But seriously, getting married helps with college expenses a lot.  Once married, we combined two incomes and our expenses, instead of doubling, increased about 1.5 times.  Why so?  We shared many resources: housing, utilities, food, and internet.  So, cash inflow increased about 100% and cash outflow increased about 50%.

Also, by getting married, we were no longer our parents’ dependents. This meant that, when applying for FAFSA, our meager income was considered, rather than our parents’.

Let’s recap: getting married will help you graduate without student loans.  First, by sharing resources, you’ll save money.  Second, you will no longer be considered dependents of your parents and will thus be granted more federal financial aid.

Just remember to get married for love and not merely the financial benefits.

4) Pick the Right Major

I’ll admit, I stumbled into this one through no special insight of my own.  It turns out that by choosing a major in a technology-related field, the government gives you extra money for school!

By studying Information Systems, I was given a SMART Grant, which paid for thousands during my last two years.  This is the only major-related government grant that I know of specifically, but surely there are others.

Talk to your counselor to see what grants or scholarships are offered specifically to your major.

5) Live Frugally

This one’s a no-brainer.  It is especially easy to live frugally as a college student—everyone expects you to be poor!  As I explained in another post, my wife and I lived in a 300 square foot treehouse while in college.  The savings on rent allowed us to pay cash for school and take a few vacations.

Living close to a university offers tons of opportunities for cheap and free entertainment.  We enjoyed attending the campus Museum of Art and surveying the works of fellow students and professionals.

Every week the College of Humanities screened foreign films for free.  (French films are depressing, Russian ones confusing.)  I could go on and on, but I’ll leave it at this: if you live close to a university, I guarantee there are interesting, free events going on every week.

6) Work Your Butt Off

My wife and I worked a lot during school.  Being employed by the university, I was prohibited from working over 20 hours a week.  So, I worked the maximum on campus and then worked on the side.

I took the knowledge I learned working at school (web design) and turned it into freelance opportunities.  There were two benefits from working so much while attending school full-time: we graduated without any debt (and with money in the bank) and I had lots of work experience to put on my resume.

With Our Powers Combined…

Putting all these factors together, we were able to finish school without student loans.  As I said at the beginning, anyone can do what we’ve done.  Put in the effort, look for ways to make money and cut expenses.

I guarantee all of your hard work will be worth it when you walk across the stage and accept your diploma without the shackles of student loans.

Posted in Building Wealth
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You Must Move Forward! The Future Needs You!

Posted By damien on May 17th, 2010

Path to the Future

If you could get in a time machine and move to the past or the future, which would you choose?

I bet the overwhelming majority would choose the past.  It’s familiar and we are nostalgic, sentimental creatures.  We keep good memories close to our hearts. After all, when loved ones move on, all we have left are memories.

While it is a wonderful thing to remember the past and honor it, we can go overboard.  Our longing for the good old days can cause us to become prisoners in our own minds, unable to escape because the world has changed.

Our focus on the past can become so obsessive and overwhelming that it ruins our lives.

You must move forward.  The past is gone, it is written, it is past.  The future remains to be written.  In order to write your future and let go of the past, here are four pitfalls to avoid:

Rose-Colored Glasses

The problem with our recollection of the past (and all history in general) is that it’s all based on memory.  Our minds are faulty machines.  We remember what and how we want to.

Whether out of emotional reasons or just plain forgetfulness, we see the past as we wanted it to be and not necessarily how it actually was.  The stories we tell ourselves about how great the “good old days” were can block us from moving forward.

Guilt

Perhaps you don’t see the past with rose-colored glasses. Maybe instead you repeat over and over in your mind a wrong you committed against another.

Guilt and regret will weigh you down and impede your progress.  In order to write your future, you must make peace with the past.  Apologize to the person you hurt.

Set it right, absolve yourself of the guilt and move on.  I know from personal experience that restitution will set you free.  The future needs you.

Longing

I watched an interesting nature show a few weeks ago about chameleons.  Did you know their eyes operate independently; that they can look in two directions at once?

We humans are not built that way.  We can only look in one direction.  The problem with looking backward is that you can’t look forward.

Moral Outrage

Religion is useful when it propels us to improve our lives and to help others.  Unfortunately, it can lead us to spite the world, to withdraw and focus on “better times”.

Let me explain:

A few weeks ago, my wife and I were socializing with some friends.  While discussing current affairs, the topic of Lady Gaga came up.

One of my friends had never heard of her, so we played a music video as an introduction.

After a few minutes, he replied, with a sigh of disgust, “The world is such a wicked place.”

Now, I’ll admit, Lady Gaga is definitely not the poster child for moral behavior, in fact, I find most of her antics downright repulsive.

But to make such a sweeping generalization about the current state of the world got me riled.

The world is an amazing place.  Every day we are finding cures to diseases, prolonging life and improving the status of previously under-served classes (women, minorities, etc.).

Believing that the past was so righteous and that today the world is so irredeemably wicked causes us to withdraw and close our minds.

The Future Needs You

Please, do not focus on the past to the exclusion of your future.  Part of living an uncluttered, free life includes liberating yourself from guilt, longing for the “good old days”, and focus on the evils of today.  The future needs you.

To paraphrase Tony Robbins, you are more than just your biography.

What parts of your past prevent you from enjoying the future? How do you overcome them?

Posted in Selp Improvement
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