Banking

10 Tips To Break Bad Banking Habits

February 17, 2014 by Sherry Tingley

You may be losing money every month because you aren’t aware that some of your basic banking habits can be pricey. Some common mistakes that people keep making come to the attention of banking analysts and are shared with you in this guide to keeping more of your money in your pocket.

Tip #1 – Stay Current With Your Account Fees

You may have opened your bank account 20 years ago when there were no fees charged to you. Take the time to talk to your bank and ask them what fees they can charge your particular type of account. It may be time to change the type of account you currently have.

One woman was getting charged $27 a month and went into the bank to complain. Her account was designed to encourage savings and would charge a $1 per transaction fee each time she made a withdrawal or processed a transaction. Setting up a different type of account would save her $324 a year.

Tip #2 – List Dates Of Your Automatic Withdrawals

Nothing is as frustrating as checking your online balance, thinking you have money to spend and then not realizing that an automatic withdrawal is pending. Forgetting about the pending withdrawals can be draining your bank account.

Go online and download a month’s worth of activity. Filter out all the automatic withdrawal transactions and figure out exactly what dates the amounts are deducted. Keep the information in a spreadsheet or print it out and carry it with you.

Tip #3 – Discover The Location Of Approved ATM’s

When you withdraw money from ATM’s that are not associated with your bank, you can get charged fees in varying amounts. The fees might not be big, but they could easily put you into an overdrawn status. Now those fees can be large and will make you cringe.

Find the ATM’s that are near your work, where you dine out and near where you shop and use them. One customer had $50 worth of ATM fees in a month. When asked why he couldn’t find approved ATM’s his response was that he knew where they were, he just couldn’t be bothered with walking across the street. Walking across the street could potentially save him $600 a year.

Tip #4 – Save Loose Change

It may be annoying to carry loose change, but having a strategy to deal with it can really add up to some decent money. When you get home from work or shopping, just toss the loose change in a large jar. When the jar gets full, bring it into the bank and use their coin machine to count it and return you with paper currency. You’ll be surprised how much is really in that jar. Take care of the cents and the dollars will take care of you.

Tip #5 – Check Online Accounts Daily

Face it. Some people don’t even do this monthly. One customer went into her bank and was very upset. She had no money in her account. Upon investigation, it was discovered that she had a joint account with an ex-partner and she had never had his name removed from the account. For five years the partner had been stealing from her account in small increments. It was only when he decided to take it all that she even noticed.

Tip #6 – Reduce The Number Of Accounts

Some of us get creative with our savings or checking accounts, opening too many to even remember what they are for. Balancing and tracking all that information is very time consuming and for most people too much of a hassle to handle.

Then there are those people who are flattered when they get a sales pitch to open a new credit card. They think it is cool that someone else says they have great credit so they open another account. Having too many credit cards provides you with too many temptations.

Limit the number of accounts you have. Trim down the number of your credit cards to make them easier to manage. Trim down the number of checking and savings accounts if tracking and managing them becomes too easy to make costly mistakes.

Tip # 7 – Distinguish Between Wants and Needs

The difference between what we think we need and what we actually need, can be enormous. Overspending can lead us to overdrawn account fees, excessive credit card use and a feeling of being out of control.

Advertisers are relentless when they pitch us so we really have to be aware of our own needs. Designer clothes, handbags, eating out, multiple Ipads and cell phones may have their appeal, but they can’t be classified as needs. Spend money on your needs first.

Tip # 8 – Maintain Minimum Balances

If your bank requires you to have at least $300 in your account, find out what fees they can charge if you drop below that amount. If you have believe you are entitled to spend money if you see it in your account, take a new approach. Deposit the minimum balance and in your record keeping system don’t add that amount into your perceived balance. That way the money will always be there. Just leave it alone.

Tip #9 – Check Your Excess Withdrawal Fees

Some accounts will penalize you for withdrawing money. They are designed to encourage you to save and can charge per transaction. Ignoring the terms of the account incurs more expense than you will ever earn on the interest.

Tip – #10 – Set Up Mobile Alerts

Some banks will let you set up text alerts that go directly to your mobile phone. You can text in requests to see your account balances, account activity, make transfers and find ATM locations near you.

Alerts can also be set up to send you a text under specific conditions that you choose. Remind yourself when your balance falls below a threshold or learn when a deposit has been made.

Use technology to make your life simpler, avoid bank fees and live a happier life.

What bad habits do you want to break?

Name The Faces Of Wall Street Journal’s Facebook Image

January 4, 2014 by Sherry Tingley

Celebrities

The popular Facebook page by Wall Street Journal shows this beautiful illustration as their cover photo. With 1,837,732 likes and 56,329 people talking, Wall Street Journal excels at Social Media. The well read newspaper captures customers’ attention as well as meaningfully engaging them in conversations on Facebook.

Who Are They?

For the challenge of the day, see how many people you can identify and why you think they made it to the cover of WSJ’s Facebook page?

For a little help –

Mark Zuckerberg
Hillary Clinton
Ben S. Bernanke
Oprah Winfrey
Warren Buffet
Janet Yellen
Calvin Broadus – Snoop Dogg
Serina Williams
Marissa Mayer
Barrack Obama
Queen Elizabeth
Chris Christie

Will Bitcoins Hit The Mainstream In The US?

November 19, 2013 by Twila Van Leer

Depends on whom you ask. The faithful believe Bitcoins will eventually meld into the mix of worldwide financial options and become a valid — and better — way of transacting business. On the other side of the scale are those who expect the phenomenon to burst like a bubble. In between the extremes are millions around the world who simply don’t know what the approach to virtual money means.

Launched in 2009, the Bitcoins approach has become central to ongoing debate about the feasibility of the use of virtual money that has no central control and seemingly tenuous parameters. Created by anonymous programmers, it seems at bottom to lack the substance you’d expect of a medium that is finding some acceptance in worldwide commerce.

Opinions about Bitcoins range from “speculative mania” to predictions that the initial consternations will be resolved and that Bitcoins will one day become as commonly used as the credit cards that decorate the pockets of people around the globe. Optimists say it will ultimately lower payment processing and make transactions more secure. Financial experts are lining up with conferences, seminars and other forums for looking more closely into what virtual money means and whether it has a place in today’s financial array.

Even as the debate heats up, the concept shows a huge amount of growth. The value of a single Bitcoins topped $700 today recently and the overall network’s worth was hovering around $7 billion.

Part of the problem is that early early experience with Bitcoins shows that it has stepped beyond ordinary purchases and payments and moved into the illegal areas of drugs, weapons and child pornography.

In October, federal authorities arrested principals of an online market that told clientele that they could use Bitcoins to purchase drugs and other illegal products. Silk Road, one of the Web’s biggest purveyors of drugs, phony documents and other illegal items, also was shut down. Bitcoins appealed to Silk Road’s clientele because of the lack of any oversight. The potential for money laundering and other criminal uses has raised the antennae of some regulators and they are making moves that would inevitably, it seems, create some oversight over time.

Some businesses that have considered accepting Bitcoins in payment for products have backed off, even though they see value in the option, while they wait to see how the control issues are going to play out. One of the attractions, from their viewpoint, would be a lowering of payment processing costs. Retailers who pay 2 to 3 percent of the value of a sale when a credit card is used to make the transaction have been looking for options and some see Bitcoins as a possible solution.

One of the hazards of using the new Bitcoins is the wild fluctuation in value. Although a boon to currency speculators, that causes headaches for ordinary consumers. So far, it has attracted the interest of a relatively few merchants who will accept bitcoin in payment for their wares. According to a New York Times article on the phenomenon, these include such diverse interests as a winery in British Columbia, an online dating site and a Seattle lunch truck that specializes in grilled cheese sandwiches.

Beyond its own specifics, Bitcoins has focused the financial spotlight on fundamental issues that surround the potential use of virtual money. With an increasing proportion of the world’s business being conducted via computer, they are questions that need to be answered. It may make a difference in whether you will soon find your “wallet” filled with virtual cash. Stay tuned.

Bank of America Earnings on Uptrend

October 18, 2013 by Twila Van Leer

Third-quarter earnings for Bank of America showed a hefty rise, suggesting that the country’s leading financial institutions are continuing to pull out of the recent recession, although slowly. The bank’s quarterly profits rose to $2.5 billion – 20 cents a share – over the same period a year earlier. The earlier year was affected by litigation costs and other charges.

Analysts had anticipated a 19-cents-per-share increase in this quarter, but were happy to be making even more progress “in an environment that did have its challenges,” according to Bruce Thompson, Bank of America’s chief financial officer.

The company’s wealth management operations, which include Merrill Lynch, contributed to the quarterly good news, with a 26 percent increase over the previous year. But not all of the banking giant’s components did as well. Large mortgage operations reported a $1 billion loss in the third quarter, worse even than the same quarter last year. Mortgage refinancing has slowed with increasing interest rates. Although there are signs that the American housing situation is improving, it will take a big jump to regain stability.

One bright spot in the report was a 36 percent increase in net income for the unit that does traditional branch bank lending to consumers and small companies. Strong revenue and lower expenses in the unit contributed to the jump.

Overall, there was a slight drop in quarterly total revenues, from $22.5 billion last year to $22.2 billion this year.

This disparity among the company’s businesses is a cause for concern. Whether investors will continue to settle for uneven progress, with some elements waning and others regaining their equilibrium, is a question.

Looking ahead, Bank of America financial gurus predict continuing progress in the fourth quarter. The bank is not alone in its struggle to climb out of the recession abyss. Most of the country’s large financial institutions are fighting the same battles against a flaccid market.

Is 30-Year Subsidized Mortgage In Imminent Danger?

October 16, 2013 by Twila Van Leer

The federal government is looking for ways to trim its outlay and subsidization of home mortgages has slipped onto the list of possible programs to delete. The possible demise of the subsidies might spell the end to home ownership for many Americans.

The history goes back more than 40 years to a time when promotion of home ownership led the feds to boost support for potential buyers who couldn’t meet financial guidelines.

Now the tentative talk in the Obama administration is to eliminate Fannie Mae and Freddie Mac, the huge government programs created to administer the program. That would not eliminate 30-year mortgages, but would leave the market to people with modest incomes who could afford to purchase from a private lender. At this point, the 30-year fixed-rate loan is the most popular in the United States. Some 80 percent of mortgages fall into this category, which means that Fannie and Freddie can guarantee them, as long as they’re below a maximum amount. Spreading payments over such a long span costs more in the long haul, but makes ownership affordable for many buyers.

Part of the conversation centers on massive default statistics, in which the government has been left holding the bag as subsidized homeowners opt out before completing payment. Throw in management and accounting scandals at Fannie and Freddie and there seems plenty of ammunition for those willing to scrap the program. The costs to the country’s taxpayers reach into the billions of dollars, they say. But the availability of government guarantees has given many lower-middle-class Americans entrée into home-ownership. How those two factors will balance out as the discussion goes forward remains to be seen.

Critics argue, on the other hand, that subsidization has created the highest-priced housing available in the world. Over-building and selling too-large homes have resulted, they contend. Because down payments are low, it appears that the homeowner is less reluctant to default on a whim. The loss is not great. The financial experts suggest that requiring a 20 percent – or more – payment up front would discourage people from walking away before the loan has been paid down.

Should the government bow out of the mortgage business, 30-year mortgages would not disappear, but they likely would be higher-priced and there would be fewer of them, experts predict. The percentage of buyers seeking these loans likely would drop to the 30 percentage neighborhood, they say.

History shows that the government’s involvement as a provider of subsidies significantly changed the housing market. In the 1920s, for instances, the more common scenario was for a buyer to put down 40 percent of the cost of the house and obtain a low-interest loan for 10 years. Refinancing was common.

Other countries have devised ways to help low-income citizens get into a home, some say, and have higher homeowner rates than the U.S. In some, subsidization is not an option.

As talk heats up in Congress, dozens of arguments will have their bearing. There is little expectation of a fast resolution of the question and when the dust clears, there could be little difference — or a huge revision in how Americans buy or don’t buy their homes.