At the end of 2008, the editors of Kiplinger’s Personal Finance magazine selected FNBO Direct as their favorite savings account. Since that time, the banking landscape has changed. From the ashes of GMAC Bank rose Ally Bank offering competitive interest rates, currently APY. Kiplinger’s chose Ally Bank as the best savings account of 2009.
Kiplinger’s editors list their favorite features Ally Bank Online Savings Account: no minimum deposit to open the account, no monthly fees, and no minimum balance. The magazine also mentions Ally’s no-penalty certificate of deposit (CD). With these strong products, Kiplinger’s rates Ally Bank at the top.
The magazine selects additional favorites. Their choice for best checking account is most notable. Schwab Bank High-Yield Investor Checking has taken this award for the second year in a row.
With savings and checking accounts offering low interest rates compared to the rates offered a few years ago, Kiplinger’s also presents two suggestions for bonds. These are a little riskier but will most likely present a better return for investors than savings accounts. The favorite candidates are Vanguard Limited Term Exempt and Fidelity Floating High Income.
Since GMAC Bank became Ally Bank last year, many readers have offered feedback about the result of the transformation, both positive and negative, about the full customer experience. Ally Bank customers, please share your thoughts here. Do you like the bank? Is Kiplinger’s choice justifiable?
In a few days you will have a chance to vote for your favorite bank and savings account by participating in the Plutus Awards.
Charles Darwin is often misquoted when referring to the concept of “survival of the fittest”, but his writings specify adaptability as the trait that individuals should strive for if they want to survive (and reproduce). In order for our wallets to survive in the future, we’re going to have to learn to be more adaptable by far. Businesses can tag information, recognize patterns, analyze data, get up-to-the-minute reports and make decisions based on your behavior. As long as there’s a way to opt-out of this, I don’t personally have a problem with any of that, but I sympathize if you do.
It’d be even better if all of these techniques were necessarily opt-in. Unfortunately, I’ve come across a few instances where opting out isn’t a reasonable option. In fact, your only option seems to be to walk away.
Harrah’s Loyalty / Rewards Program
When you go to gamble at most of the casinos operated by Harrah’s, you get to sign up for a rewards card. You swipe the card at the table and points start to accrue. When you reach a certain threshold, you are eligible for free stuff. That’s not particularly special; casinos have always done this. But casino employees used to do this manually, using just their eyes.
Harrah’s has a powerful and massive computer analyzing customer behavior on-the-fly, and here’s how the trick works:
You’re a regular customer, but not a big spender
Harrah’s knows how much you’re usually willing to lose on a given trip to the casino, before you leave
You gamble some, and you start to reach your limit
A nice Harrah’s employee brings you a free drink
You start making bad decisions and lose more money at the casino
This can work at any level. Depending on how much you usually spend, they’ll offer you a free dinner, a show, a room, etc. But now, the casino doesn’t have to spend any time watching you, deciding what to offer you, or even personally handing you anything. It’s all electronic and automatic. Swipe, lose, drink, swipe more. In order to survive, we’ll need to be a lot more clever, and understand the machine that is trying to manipulate us. I realize that sounds paranoid, but it’s just a normal fact now.
Of course you can just ignore the Rewards Card (I think), but why would you? Free stuff!
Microsoft Surface Table in the Bar
Speaking of drinking, imagine a table that knows exactly when to offer to refill your drink. What am I saying? You don’t have to imagine it, here’s the video:
Say you go to a bar with one of these tables, and it’s a bar which is honest enough to inform you that they have one of these tables, and you don’t want to be manipulated. It seems that your options now are:
Be more clever and adaptable
Leave the bar right away
Bring your own glass
Who knows, maybe if these smart tables become ubiquitous, carrying your own glass will be trendy. Maybe you could buy one and put your Twitter feed on it. (By the way, you can now follow me on Twitter.)
In a perfect word, I wouldn’t spread my money among more than one or two savings accounts. There is value in simplifying personal finances and I try to take that approach where possible. Forces are working against me, however, keeping my finances more complicated than they would be otherwise.
Occasionally I review and evaluate banking products for the benefit of Consumerism Commentary readers. For some examples, see my reviews of the Ally Bank Savings Account, FNBO Direct Savings Account, and EverBank Money Market Account. In order to evaluate these products I use my own money to open new accounts. This has left me with a long list of banks where I keep not much more than the minimum allowed balance.
Without Consumerism Commentary, I expect I’d leave most of my cash in a savings account that offers consistently high interest (not teaser rates) and exceptional customer service. Yesterday, a visitor asked me to explain where my cash is held, so I put together this chart, based on my account balances at the end of January 2010, not including money market funds within investment accounts.
The visitor also asked why I keep so much in savings accounts when the money could be earning more in the stock market. Besides the risk, I expect I’ll need most of this cash within the next year or two for buying a house.
The chart below, designed with Microsoft Excel 2010 Beta with data from Quicken Home & Business, further breaks down my cash by identifying savings accounts and checking accounts at the above banks.
This table shows that there is a lot of room for optimization. I could move money around to take better advantage of the highest of low interest rates. According to a quick calculation, moving all of my money at ING Direct to Ally Bank would only provide an additional $40 per year, at most in interest. That’s hardly a financial incentive at this point, so the only incentive to consolidate accounts would be for simplicity.
Where do you keep your cash? Do you prefer simplification or diversification for your savings?
Today we talk with Jeff Bartlett, Autos Deputy Editor at Consumer Reports about the recent Toyota recalls. For updated information on Toyota recalls, see Consumer Reports’ unintended acceleration guide.
Also in today’s episode, Flexo discusses money saving tips for Valentine’s Day.
[00:00] Introduction from Tom Dziubek [00:34] Interview with Jeff Bartlett – [01:25] Two separate Toyota recalls – [02:45] Lexus, Ford and Pontiac recalls – [05:06] List of affected cars – [07:10] Urgency of fixing a sticky accelerator – [08:10] Shifting a car into neutral – [09:49] Brake system failures and software malfunctions – [13:25] Suspension of Consumer Reports recommendations – [16:27] How Consumer Reports will handle future Toyota ratings – [17:58] Toyota’s handling of the recalls – [21:01] Challenges facing Toyota dealerships in handling the recalls [24:21] Interview with Flexo – [25:31] How people plan on spending money on Valentine’s Day – [26:42] Making your own greeting card – [29:39] Skipping the chocolate – [30:49] Avoiding gifts of sensual clothing – [32:18] Turning off the electrical appliances – [33:39] Skipping the gourmet dinner – [34:30] Spending time together [36:14] End
We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.
In my most recent debt update, I re-committed to spending a fixed amount of money on discretionary items during the week, instead of trusting my self-disciplined use of a credit card. I got $100.00 out of the ATM last Saturday, and the experiment began.
See, I’m still not sure if $100.00 per week is reasonable. It seems like it should be, but I was born in 1975, and humans seem to learn pretty early on how much a dollar is worth, after which it’s difficult to re-learn a new value. Some small part of me still has trouble paying more than $5.00 for a shirt, for example. I’m pretty sure that I’ve gone through periods in the past using “only” $100.00 a week, without any trouble, and it was a nice round number.
How’d I Do?
So, now it’s Friday, how much do I have left? $35 and some change. (And it’s the change part that might be the worst of all. I hate carrying coins.)
The dangerous bit here is that the car is running low on gas, and I suspect I’ll have to fill up on the way home. The last time I filled up 11 days ago, it cost $22.65 (thanks for the info, Fuelly!), so I should plan on at least $25.00. That leaves about $10.00 until mid-day Saturday.
Did I Make Any Mistakes?
By Monday morning, I hadn’t spent any of the $100.00, and I was feeling cautiously optimistic. Of course, that also means I hadn’t done anything nice (anything nice that requires cash) for my wife over the weekend. I used to be in the habit at least of buying breakfast on Saturday or Sunday.
But on Monday, two big things happened, things that last week I would not have considered big. My teammates at work have a regular monthly lunch date, and we went to California Pizza Kitchen, which cost roughly $20.00 including a tip. But given that I still had pizza leftover for lunch the next day, it evened out to about $10.00 for two days, and that only happens once a month, anyway.
The other big thing is that I brought in some shirts for dry cleaning. I go through bouts of enjoying the feel of a starchy shirt, and here in Texas, you can’t wear long sleeves for at least six months of the year, so this won’t be a permanent problem. Fortunately, I took a chance on the Cleaner/Tailor that is the closest to our house, and because it’s a Mom & Pop (literally) business, they’re inexpensive and careful. They don’t lose buttons, they replace missing buttons. And the bill was twice as high this week because I brought in some slacks to get the frayed hems fixed, which cost $8.00 Some brief research online indicates that $10.00 is a normal price for that, and it’s certainly cheaper than buying new pants.
Sure, But What Did You Use Plastic For?
Ah, you know me too well. I’ve used my debit card for two things since I decided to go cash-only:
Before I went to the bank to use the ATM, I went to Walgreen’s, ’cause I thought they had a Chase ATM, but they didn’t, and I ended up buying two pints of ice cream for $3.98
On Wednesday night I needed to park downtown, and I didn’t trust the electronic meter very much, so I used another $3.00 on the debit card for that.
So if you remove that (rounding up) $7.00, I actually have $28.00 left, most of which will go toward gasoline later today.
All the Plastic, Dude
Okay, okay. I’ll check and see what got added to the problematic credit card since the experiment began on January 27th.
$17.99 went toward Usenet access. This is one of those regular, automatic charges that people tend to forget about. I don’t use that for as many things as I used to, certainly not $18 / month worth, and I’m making myself a to-do to re-evaluate that.
$30.00 to the DNC? I don’t recognize this, but it probably came from a commitment to make contributions until a particular law is passed. I’d still like to be able to do that, but as we can see, I can’t afford it. To-do #2.
Huh. This thing is saying I used the credit card for $12.32 at Chik-Fil-A on Monday. Even if the transaction date is off by a day or two, this is still troubling because I don’t remember going to Chik-Fil-A. $12.32 looks like two people’s worth. Maybe my wife will remember this? Regardless, I’m wondering if maybe I just used the credit card accidentally out of habit. I’ll put it in a different place in my wallet, and the resulting confusion should remind me not to use it.
I spent $2.99 on an episode of Leverage through iTunes (man, that’s a great show). Officially, this should come out of our joint account. I should create a spreadsheet to keep a tally of joint expenses that go on my credit card. It won’t add up to much, I don’t think, but just to be safe.
I also spent $0.99 on the song “Swinging on a Star” (the one from the “Hudson Hawk” soundtrack, of course). Before I re-committed, I was spending a lot on music, especially movie soundtracks. On the list of areas where I need to exercise more restraint, music purchases is definitely in the top three.
I made a regular, automatic $5.00 donation to the producer of some of my favorite podcasts. I don’t want to stop making this donation, because I want to think that someday I can also make a living that way. Maybe I should just switch it to my bank debit card? What do you think?
And the pending payment from today: $40.00 for tolls. I don’t know what to do about this. I like the tollway, it makes my commute a good 15 minutes faster. How much more would I be spending on gas if I took surface roads? I don’t know.
What Does the Future Hold?
Clearly, I didn’t make it through the week spending only $100.00. Compared to previous months, I made huge strides forward, but I didn’t meet my goal. It probably seems worse, because the month rolled over in the middle of the first week and several automatic monthly payments were made, totaling about $93.00. Assuming there aren’t more of these at other times of the month, that’s $23.25 per week that I wasn’t accounting for. I think I can get rid of most everything except the tolls.
Is there anything else I forgot to look at, or consider changing?
This past weekend, a sculpture by Alberto Giacometti broke the previous record for most expensive piece of art sold at auction. An anonymous bidder purchased “L’Homme Qui Marche I” for $104.3 million, up to five times more than the expected price. This may be a good sign for the art world in need of a recovery from a bubble and crash. Only a few months ago, Lehman Brothers was selling off art within the company’s possession at any price possible in order to pay back their creditors.
The winner of the auction is remaining anonymous, and that’s probably a good idea. Many owners of high-priced art are investment banks. Consumers are still angry about taxpayer money used for bailouts and executive bonuses, so from a public relations perspective, no one would want to be seen spending this much money on one piece of art. In addition, storage, security, and insurance for this valuable sculpture is sure to be a significant expense, as well.
However, well-chosen art could provide to be an excellent investment. There are drawbacks. With the expenses mentioned, art as an investment is cash flow negative. Unless you are able to lend the works to a gallery, they will not produce income for the owner. The only chance to come out ahead is to sell the art for a higher price than the purchase price, and this is a very risky proposition. Art prices fluctuate and tastes change.
While small-time investors may be used to transaction fees no larger than $10 a trade, the art market isn’t as modest. Not only does the selling price need to be higher, but exorbitant transaction fees must be factored in. Even if you sell a work of art for 20% more than you paid for it, everyone involved in the sale, from the auction house to the banks that facilitate the purchase will find a way to eat into your profit margin.
From one perspective, $104.3 million seems to be a large amount to spend on a work of art when people are suffering throughout the world. The money could save lives. But art is an essential component of culture, and if this purchase broadens awareness and appreciation, the world may be better off.
Do you feel a work of art is a good choice for spending $104.3 million right now?
Imagine your income were sliced in half while your debts remained the same. How would you prioritize your payments? For those who have only credit cards, I’ve always suggested using, or at least understanding, the Debt Avalanche, but that doesn’t take into account other debts you might have such as personal loans and the mortgage.
Over the past couple of years, more consumers in precarious financial conditions due to unemployment or an otherwise lack of income have decided credit cards should be higher on the prioritization list than the mortgage. By the end of 2009, twice as many people were delinquent with their mortgage payments while current with credit card payments than were delinquent with credit card payments while current with mortgage payments. This is according to a study by the credit reporting bureau Trans Union, a company with millions of data points at its figurative fingertips.
Part of this might be due to the credit crunch and lower balances on credit cards in general, but it also may be due to the frequency of foreclosures and the general tendency for people to lose faith in the value of their homes as they watch the real estate market crumble. Many homeowners are giving up and walking away from houses with mortgages they can’t afford. If the only punishment is a tarnished credit report, there isn’t much of an incentive for people to keep paying money if they’re not building equity.
Also, families in financial trouble still need at least the basic necessities: food, water, and shelter. For those without a solid emergency fund, credit cards are the most typical financing strategy in times of need. You can even use a credit card to pay your mortgage.
I see the rationale for prioritizing these bills; if a credit card is revoked, someone may not be able to procure the necessities of life. A mortgage should be prioritized higher than credit cards, however, because the mortgage is secured debt. Your house is collateral. The bank that holds your mortgage can take away your house if you don’t pay. Even though some people are comfortable abandoning a house that has declined in value, it’s not a smart move. There’s a good chance real estate value will eventually return, so as long as you have a reasonable interest rate and have been paying down the principle of the loan, sitting tight will pay off.
Credit cards are unsecured loans. Knowing that this type of debt is a lower priority, credit cards will do whatever they can to get you to pay. They will call you, bother your neighbors, sell and even your debt to a collection agency who will do worse. The credit card issuers know that you won’t pay unless they make it seem like you’ll be in major trouble if you don’t send a check. Meanwhile, banks are ready to take your house if you don’t pay, even though most banks are struggling companies and don’t want to take on real estate that is performing poorly in the short term.
If you have to choose between making a mortgage payment and a credit card payment, choose the mortgage. Do you agree or disagree?
This article is presented by Kelly Whalen, Consumerism Commentary staff writer.
The costs of health care rose dramatically in the past year for many Americans. Hewitt Associates, a global human resources consulting firm, measured an increase in group insurance premiums of 6% percent in 2009, and that’s only part of the full health care picture.
While health care reform is stalled in Congress and will not solve all the issues with the behemoth health care industry, there are actions you can take to save thousands of dollars on health care expenses.
An apple a day. The saying is still true, preventative care is really the best way to stay healthy. A yearly checkup with your doctor, dentist, eye doctor, and gynecologist can help catch illness or disease early as well as give your healthcare provider an understanding of what “normal,” is for you. For instance, one of my children has a normal temperature of 97.5°F, so a 98.6°F reading is actually a slightly elevated fever for her.
Don’t delay. Some of the largest costs to insurance companies and hospitals are patients who delay treatment. While you shouldn’t run to the doctor every time you have a mild case of the sniffles, ignoring a problem could make it harder to treat. In some cases doctors aren’t quick to make a diagnosis or need multiple tests or opinions. In those cases waiting can be damaging or deadly.
Avoid the emergency room. The cost of a visit to the ER is five times as expensive as a doctor’s visit according to national averages. Go to your primary care doctor, a Minute Clinic, or an Urgent Care Center instead. If you have health issues or get ill frequently look for a doctor that has weekend office hours, is available by phone, or who does house calls. (Yes, house calls do exist, Virginia.)
Stay fit. The foundation of good health is being in good shape. Eating well, exercising,, and sleep have a huge impact on how quickly you recover whether whether from a common cold or surgery. Getting better faster means less time out from work, so you can use those vacation days for a real vacation.
Clean your teeth. It sounds like something your mom would say, but keeping your teeth clean can add years to your life and reduce your medical and dental bills.
Give yourself a healthcare checkup. Make sure you fully understand your health care benefits and its limitations. You may be paying too much out of pocket, or too much for a plan you don’t fully use. Talk to your HR department, or insurance broker for other options. Look into Health Savings Accounts. This type of account is like an emergency fund for your healthcare expenses. If you have a Flexible Spending Account make sure you are keeping track of the money you are spending and use it before you lose it. Make sure you understand all the benefits of your insurance package. Some insurance companies may cover or offer discounts on services such as massage, acupuncture, chiropractic care, nutrition counseling, smoking cessation, weight loss training, and gym memberships.
While you may be busy or think a visit to the doctor is too expensive, it could save you thousands of dollars and years of your life. Your physical health should go hand in hand with your fiscal health so you can enjoy the fruits of your hard work for as long as possible.
Steve: Certainly there would have to be some kind of opt in/out for the drink refilling bar. They can’t just keep bring you drinks until the end of... on Future Tech Will Force Us To Be Smarter
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Since GMAC Bank became Ally Bank last year, many readers have offered feedback about the result of the transformation, both positive and negative, about the full customer experience. Ally Bank customers, please share your thoughts here. Do you like the bank? Is Kiplinger’s choice justifiable?
[00:00] Introduction from Tom Dziubek
Also, families in financial trouble still need at least the basic necessities: food, water, and shelter. For those without a 
Don’t delay. Some of the largest costs to insurance companies and hospitals are patients who delay treatment. While you shouldn’t run to the doctor every time you have a mild case of the sniffles, ignoring a problem could make it harder to treat. In some cases doctors aren’t quick to make a diagnosis or need multiple tests or opinions. In those cases waiting can be damaging or deadly.
