The table of savings and checking account interest rates has been updated to include some moves by Presidential, UFB Direct, and Virtual Bank.
Last week people were sounding the warning alarm for $5 gas at the pump. I didn’t echo the thought here because at the time on the surface it seemed somewhat reactionary. But some people are still claiaming we could shortly reach that… maybe.
Compare these two CNN articles. First, Rita could equal $5 gas, written September 22. Opening sentences:
Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days. Weather and energy experts say that as bad as Hurricane Katrina hit the nation’s supply of gasoline, Hurricane Rita could be worse.
Now here is a more recent article (September 28, today), in which Gerri Willis offers 5 tips for saving gas. The first few sentences:
Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days. Weather and energy experts say that as bad as Hurricane Katrina hit the nation’s supply of gasoline, Hurricane Rita could be worse. Analysts are predicting Rita’s aftermath could catapult gas prices to $4, even $5 a gallon.
Perhaps energy experts will come out once a week, every week, to declare that by “this time next week” we’ll see $5 gas. At some point, they will be correct.
Predictions aside, Gerri’s article does offer five tips as promised:
* Save from the start. Buy smart. At the very least, know the how your new car is rated in terms of gas mileage.
* Be high maintenance. Clean out the trunk, check air pressure in the tires, and keep your air filters clean.
* Find a buddy. Carpooling is a great solution for those who can give up some flexibility.
* Compare prices from home. Shop around for the best (lowest priced) stations on your route.
* Show us the deduction. Don’t forget the reimbursement rate for September through December 2005 is now 48.5 cents per mile. When I volunteer over the weekends this fall, I’m only getting 30 cents per mile in excess of 200 miles per day — a minimum I rarely reach. I suppose that’s why they call it volunteering.
A little tidbit gurus like to throw around is the first part of the phrase in the title of this entry. The second part is the sound Seth Green uttered as the voice of the character Chris Griffin in the new episode of Family Guy that was on earlier tonight.
“It’s not what you make, it’s what you spend.” Surely those who preach this phrase use an example of two people in the same position earning the same amount, having the same path to the current point in their careers. One spends more money than the other. The one who saves more builds wealth faster. Sure, that’s pretty straightforward.
But just like every other bite-sized nugget of “wisdom,” the credo just doesn’t hold up under real life circumstances. Take two frugal people in the same type of job. One is an event planner (and manager of that department) for a non-profit organization, the other is an event planner (and manager of that department) for a corporation. Let’s say they both have a decently frugal lifestyle and have expenses totalling $20,000 in the particular year we’re evaluating.
Our non-profit manager is making $40,000 during that year. Our corporate manager is bringing home $80,000. With the same conservative expenses, who is coming out on top, by leaps and bounds over time?
Our favorite phrase is often used in conjunction with the goal of becoming a “millionaire.” The fact remains that the individual with the highest net income at the end of the year, regardless of gross income or gross expenses, given the same opportunities for investment, is going to reach the goal first. Therefore, these two categories — income and expense — must be weighted equally. If you still believe that level of income is secondary to level of expense, someone has been trying to sell you something, and they have succeeded.
You may have been offered a credit score when you took advantage of the free credit report offer. CNN is offering tips for boosting that score. But first a note. Often, credit scores offered by the credit reporting agency are not true FICO scores — the ones mortgage companies use when contemplating your credit risk, for example. I’ve heard some people boasting a credit score of 870 when the highest possible FICO score is 850. The best way to get your true FICO scores is through MyFICO.com.
Now that you have your correct FICO scores — one from each credit reporting bureau, obtained through the Fair Isaac Corporation — let’s work on raising the scores.
* Pay your bills on time. If you’re more than 30 days delinquent on any bill, it will negatively affect your score. Pay them on time.
* Keep credit card balances low. The ratio of debt to available credit affects your score; the higher the ratio, the higher your score. Keep this in mind if you consolidate multiple credit cards to fewer. This can result in the same level of debt but a lower level of available credit.
* Don’t open unnecessary accounts. I know from personal experience that being at a sales counter in a store and being offered a 10% discount “just for applying” for a store credit card can be enticing. 10% is a good discount! On the other hand, opening credit card accounts lowers your FICO score.
* Manage your credit cards responsibly. Using cards properly by paying off the balances quickly and taking care of installment loans builds up credit history. Banks will see someone with a favorable credit history as less risk as an individual with no history.
* Closing an account doesn’t help. If you made mistakes in the past, they won’t go away from the credit report simply by closing the account. Some items can stay on the report (and be factored into your score) long after you’ve reformed your ways.