Archive for category Savings
Keeping your accounts safe
Posted by WoB in Savings, Technology on July 23, 2009
In this age of technology, we seem to keep amassing accounts for new sites on the internet almost daily. There are user names and passwords to remember for each of them. It is tough enough for you to remember them all, but what should happen to all of this should you die?
Most of the accounts that you have don’t really matter, but there are probably some that you wouldn’t want to slip away.
You had better have an online savings account by now, and if the statements only go to your email address, they might be lost. This is especially scary if you should become incapacitated. You would likely need this money to help pay for good medical care.
You might have an online digital photo stash, which had less monetary value than sentimental, but it should not be lost just because the account is forgotten.
There is a service called Legacy Locker that promises to keep all of your online accounts together in one area. It allows you to pass on access to each account to anyone you choose.
They also allow you to write personal “Legacy Letters” to anyone you want that would be distributed automatically. I’m not sure that this service makes up for a lack of a will, although I’m sure that you could write a will up as one of your letters.
If you don’t take advantage of this service, you should at least give some thought to the things that would need to be found. I keep a password list saved somewhere where my wife could find it. None of the passwords are actually on it, but there are clues for her to get to the password, just in case it goes public.
I have accounts all over the place; pictures over here, bank accounts over there, money with poker sites and PayPal. For most of these accounts, I have online statements. There is not too much money floating around other than the savings accounts, but it would be a shame to lose it all. I have most of my online pictures on my hard drive. I put them on the internet for backup purposes mainly.
I’m not going to bother creating another account by using this service, but I will update my password list so that nothing important is missing.
Multiple savings accounts
We now have 5 savings accounts. We have a rainy day fund, a house down payment fund, a vacation fund, a big purchase account, and a house account. It sure seems like a lot of accounts now that I have typed it, but they each have their own purpose. There is a constant shifting of funds between these savings accounts as things take priority, or get drained down.
It is great to have multiple accounts. There is some time spent maintaining the balances of each, but that is far outweighed by the organization that it allows. Each of these separate buckets creates a bit of formality to deal with when we want to make purchases and this makes it a conscious decision.
With online savings accounts, they are easily set up once you have one, and you can open or close them as you please on the fly. I feel that the more you have, the better, and because of all of the compartmentalization, I find myself really surprised when I take a look at the total of all of the accounts. It’s nice to know that if something were to really go wrong, I could dip into other sections if it was necessary.
If you don’t want to take it to this extreme, you should really have at least two accounts. Start out with a rainy day fund and then once this is at capacity, move some into a account to be used to save up for something. Whether it is a vacation, or a house, it is a good way to keep things apart on paper and in your mind.
I can’t afford that
Posted by WoB in Credit Cards, Introduction to finance, Savings on July 8, 2009
It’s tough to know when to pass on something you want. Just about every day, I come up with something that I would like to buy and I obviously don’t make all of those purchases. Whether it’s the newest item in electronics or a new shirt, you need to know when to admit when you can’t afford it. One of the easiest ways to do this is with a budget. If it’s not in the budget, then it’s not for me. There is room in my budget for random purchases, but each of these purchases has to be weighed against each other to maximize my purchasing power.
Another deterrent that I use is to come up with a determined time value of my money. If it takes me an hour of work to take home $20, then it would cost me 10 hours to afford something that costs $200. Once I have that value, I would weigh it against the cost of the item in question. Would it be worth a quarter of a work week to have it?
When I was in college, I never said “I can’t afford it” and it took me 5 years to dig myself free of that. I ran up some serious debt. If people were going out to grab some dinner and drinks, or going to the movies, I would always go. I had the latest technology and made a lot of bad decisions. I had a lot of fun and wouldn’t trade it for anything, if only for the lessons that were learned. It sure took a lot of hard work to undo though and it was an expensive lesson.
I was on my way as soon as I realized that I couldn’t afford it all.
Start cooking at home
I have a few friends that eat out for every meal. They haven’t used their kitchen except to store leftovers. This must be nice for them, but it surely costs them a ton of money. I think that cooking is a mandatory lesson that needs to be learned. You easily pay twice for a meal what you would have paid if you had made it for yourself and probably more like four times for a decent meal. I know it takes time and that time is valuable, but there are surely meals that can be created in less than 15 minutes, that are much better, cheaper, and even quicker than jumping in the car and driving to get takeout.
If you don’t really cook, start small. When my wife and I started cooking, we went through a lot of fazes. We started with bagged meals from Bertolli (these are great). I know, it’s not really cooking for ourselves, but it got us started and it was easy. It got us used to using our pots and pans, our stove, and even the kitchen.
After we got sick of those, we started in on buying other things. We would buy a cut of meat, marinade it and bake it in the oven. Then we would make one of those boxes of mashed potatoes and microwave some green beans. These were good for a while, and we started to add variety into this faze; creamed corn, steaming broccoli, different seasoning on the meats, and different cuts of meat.
Then we moved into faze three. We would find a recipe online and give it a try. To start out, we would follow each recipe to the letter. These meals were hit or miss, but we always got through it. We would select easy recipes with minimal ingredients, because we didn’t have many on hand. We kept adding different ingredients into the mix and new recipes to the catalog.
Now, we know that we’re not the best cooks, but we have become relatively proficient. We can make almost anything taste good. We have really mastered the art of making the flavors all work together. It just takes time and practice. We now use almost the whole spice rack for different meals and don’t have to make excuses when people come over hungry. I can honestly say that I no longer have any pizza joint phone numbers memorized.
Get started. Even if you have to start with frozen Bertolli meals, just do it. Check them out, they really are good. www.bertolli.com
Saving money the easy way
Posted by WoB in Banks, Introduction to finance, Savings on June 24, 2009
I’ve talked about this before, but it is really important. There are three ways to get money into a savings account:
> wait until the end of the month, and move any leftovers into savings
> budget in an amount to send over and hopefully stick to it
> deposit a portion of your paycheck directly into savings, or have it automatically taken out electronically
I have found that trying to save money by putting what is left after all of your other expenses never really work. Unless you really have a good budget, as really are able to stick to it, you won’t have much luck using the budgeting technique either.
The best method to really maximize your savings is to have it done for you before you have a chance to even see it hit your checking account. It is much easier to not have to manage you savings process. The more you have saved, the closer you are to financial security. It’s everyone’s goal to be secure financially. If you lose your income, you need a way to pay your bills without relying on credit cards. Your mortgage or rent needs to be paid, along with other monthly expenses. If you have liquid or relatively liquid assets that you can transfer into your checking account during any period of time that you don’t have income, this is where you want to be.
Open a savings account at an online bank (www.ingdirect.com or www.hsbc.com) and have your employer deposit a good chunk of money from each paycheck. If your employer doesn’t offer this, use you online account to set up an auto withdrawal the day after each paycheck clears. As you start to see the money pile up in this account, you will notice a weight being lifted. It has an amazing effect.