As expected, ING Direct was the first bank to lower savings and checking interest rates today in response to the Federal Reserve Board’s interest rate reduction.

ING DIRECT’s Orange Savings Account has changed to 4.20% APY.

The rates for the Electric Orange Checking Account have changed as well. The new tiers are:

• $0-49,999.99 earns a 3.25% APY
• $50,000.00-$99,999.99 earns a 4.75% APY
• $100,000.00 or more earns a 4.90% APY

I expect more banks to follow

Money Magazine has tips for getting the most out of a Best Buy shopping trip, which reminded me to share my story of yesterday’s experience.

In my circle of friends, the big box retail store known for its bright blue and yellow logo is known as “Worst Buy” thanks to the multitude of headaches their shopping experiences have caused. I’ve never had a problem with them, but I do recognize that they rarely have the best prices on smaller items. Many times I’ve ended up going to Circuit City for eletronics at a better price, Amazon.com for other random items, and Monoprice for cabling.

Nevertheless, I finally found a low-cost surround sound receiver and speakrers that matched my budgetary, audiophilic, HDMI, and spatial requirements. Circuit City and Best Buy were selling the system for the same price online, but only one local Best Buy location—the one closest to my office—had it in stock. I stopped by the store yesterday on my way home.

I came into the store knowing exactly what I would be purchasing and that they had three of them in stock. When the salespeople stopped chatting and decided to help, I confirmed I could pay the online reduced price, and they fetched the system from the back.

The system, the Sony HT-SS2000, was no longer on display, presumably because the discounted price doesn’t provide the store with a profit margin as high as the margins on the more current items.

While one salesperson was bringing the system to the front, I asked the other about the 30 or so Blu-ray players stacked in boxes. I have seen refurbished or reconditioned players at the Sony Store for half price, so I asked if they had any “open box” or reconditioned items for sale.

They had no such deals, but they did offer me 10% off a new Blu-ray player on the spot. I declined as that wasn’t in my budget for the day.

If they would have offered me a $499 player for $250, I would have adjusted my spending limit, but that was not to be. I am disappointed that movie production companies are increasingly aligning with only one high definition format. Unlike the VHS vs. Beta debate, I think this could take much longer to hash out, and there may never be a clear winner.

The salesperson wasn’t eager to sell me add-ons and accessories. He probably recognized I was a fairly informed shopper. After declining the extended warranty, overpriced accessories and installation service, I made the purchase on my cash back rewards credit card, and proceeded home to install the system myself.

Money Magazine has the following suggestions for shopping at Best Buy. These tips could save anyone a few dollars and some headaches.

• Salespeople don’t work on commission, so be friendly to receive the best service.
• They will try to sell you overpriced accessories to recoup the margin lost on competitively-priced main products.
• Weigh the cost of installation with your ability to do it yourself or have someone do it for you.
• Read the fine print on the return policy and watch out for restocking fees. In other words, be sure of the product you want to buy so you aren’t returning it unless it’s defective.

• Best Buy will match competitor’s lowest price by refunding 110% of the difference if you find a qualifying advertisement within 14 days. There may be some disagreement with what counts as “qualifying,” so watch out.

  It took some time to get my new surround system working properly with the HD DVD player. I wasn’t getting an audio signal occasionally, and I think the problem may have been related to the HDMI signals not synching properly. By the end of the night, everything was working well, and I was certainly enjoying the sound.

It has been my tradition over the past few years, I will be traveling to visit my family in California over Thanksgiving. As usual, I waited too long to purchase the airline tickets. I checked prices a few weeks ago, was discouraged by the high rates, and procrastinated even further. A few nights ago, I decided to take a look again, and surprisingly, my waiting paid off.

My search started with SideStep, a very configurable flight search engine. I made some adjustments to the dates and airports, and started to get a good idea of which combinations would save me money. I eventually decided on a round-trip flight with Continental Airlines, leaving the Saturday before and returning the Friday after Thanksgiving. Yes, it’s probably the worst date of the year for traveling, but I’m pretty sure I can handle it. Plus, I’ll have the remainder of the weekend to recover at home before returning to the day job.

I was hoping to pay for the trip using the miles I’ve accumulated over the past few years. Normally that would be possible with 25,000 miles, but unfortunately, the trips around the holiday are more expensive when it comes to using points. However, the price of the round trip flight is about $270 plus taxes and other fees. I believe this is the least expensive coast-to-coast flight I’ve ever purchased.

While my initial search took advantage of SideStep’s features, I always switch over to the airline’s site for buying the tickets. Usually, more options become apparent. For example, there are flights available on Continental’s website that are not available on partner sites like SideStep or Expedia. From what I can tell, the primary reason for this is overbooking. Both flights would not allow me to select my seating preference, which is an indication that the flights are already full and they’re counting on some customers changing their plans.

I was faced with a similar situation last time I visited California, earlier this year. For one direction, my girlfriend and I were able to select our seats online within a week of the flight, and for the return trip, we had to arrive early and hope that some other customer booked for the trip would not show up. A few minutes before liftoff, we were ushered onto the airplane. In that case, there was no option for us to catch a later flight, so it worked out. This time, if I get bumped to a later flight, I have the flexibility.

Image credit: jonwatson

I’m a regular reader of this blog, Get Rich Slowly, Five Cent Nickel, Cheap Healthy Good, and a number of other blogs which encourage me to live more frugally, to save my pennies for retirement.

Save, save, save, they say. And so I am.

Like a squirrel storing up nuts for an endless winter, every spare dime beyond my basic living expenses and occasional indulgences gets ferried into the hidey-hole that is my FNBO Direct account. Granted, there’s not a lot left over, since I’m only barely living below my means at present, but no matter – regardless of its size, I guard my hoard fiercely, watch over it daily, and, occasionally, like today, wonder what it’s all truly for.

Saving patterns are fabulous things to train oneself into, but what is this elusive retirement for which I’m saving? What does it really mean?

The very phrase “retirement” brings to mind a time-worn face looking over a horizon colored by a splendid sunset, over either waving fields of grain or hordes of beaming grandchildren. I’ve seen too many commercials, perhaps, and I like sunsets and all, but I have to tell you, none of it excites me. The very thing I’m working for seems like something I wouldn’t really want at all.

Now, don’t get me wrong – the whole not-working thing seems quite appealing. I’ve got plenty of “take this job and shove it” fantasies to go around, especially on Monday mornings.

I’d love to not have to work, but I don’t really see myself retiring at 40, trading in all my suits for Hawaiian shirts and yachting around the Florida Keys. Though I try, I don’t see myself accumulating a great deal of wealth, especially considering inflation. I believe I will find a way to save enough to sustain myself reasonably well, but not to live some fabulous fantasy life, not here on the East Coast, anyway.

So in reality, I can imagine having a very nice, peaceful week or two off before I become bored and irritable, and I’d probably either be back at work or starting my own venture within a month’s time.

Even after I’m old enough to qualify for the senior citizen rate at the movies, I can still imagine myself craving excitement and wanting to fill my days with new wonders, rather than reliving old memories from my rocking chair. It’s just who I am.

Knowing this, I start to realize that I need a different kind of retirement to save for, a goal that reflects what I’m about versus some one-size-fits-all fantasy. It’s more geared towards gaining new experiences than reflecting upon the past, and that means that, given the very expensive area in which I live, maybe it’s not in the United States at all.

As you know from past entries, I love to travel and feel that I’ve not seen nearly enough of what the world has to offer. When I came across International Living’s article, 10 Exotic, Affordable Retiree Havens, I was intrigued. What if my dream vacation was also my retirement destination? And if the cost of living was cheaper, all the better!

While some spots sound better than others to me, there’s lots to learn about these exotic retirement meccas. The article lists out comparative prices for everything from a bottle of wine to a doctor’s visit, utilities, and rent in all ten locales, but I’ll summarize some of the things I found interesting:

Panama
A man, a plan, a canal…a high standard of healthcare. This plus access to both raw, compelling nature and more refined musical and theatrical events makes Panama a standout. The travel column the article links to outlines an alluring range of options from city-slicking to jungle exploration:

Panama is full of possibilities. Panama is really three countries: glitzy, supermodern Panama City; the cool, inscrutable, slow-moving interior (including jungle and cloud forest); and the varied, surfable, fishable coasts—backpacker-land. Like so many places that are at the center of their geographical area, Panama is a dream factory.

There’s another great article I stumbled across from International Living as well: Panama is a Paradise for Retirees. It mentions a 50% discount program off of just about every cost I can fathom, plus extra perks like a 20-year exemption from property taxes and no taxes whatsoever on foreign earned income. There’s a wealth of information on cost of living as well:

Panama has one of the lowest costs of living in all Central and South America: A U.S.-style home can be built for about $40 per square foot; unskilled labor costs $6.40 per day; a full-time live-in maid costs $120 to $160 a month; a beer at a bar costs 35 cents; a cup of coffee, 30 cents; a haircut and shave can cost as little as $2; an afternoon at a beauty salon is $8; electricity is about 10 cents per kilowatt-hour; water bills are $18 per year; telephone service costs roughly $30 a month; Internet access is $14 a month; wireless is available for a bit more; cellular-telephone service costs about $30 a month plus a per-minute charge of around 22 cents; and cable TV will cost you about $30 a month.

I’ve always dreamt of going to visit jungles, but not necessarily residing there permanently. (You know, hungry jaguars and all.) But it sounds like there’s so much variation between regions that one could live comfortably while still enjoying the occasional expedition. That sounds like a downright thrilling retirement, not passive at all. And with monthly rent around $600 for Panama City, it sounds reasonable as well.

Malta
Say “near-perfect climate” in the heart of the Mediterranean and I’m there, but the 15% income-tax rate for foreign residents, lack of property taxes, low crime rate, excellent healthcare and prevalence of English seals the deal. $80 a month for a maid means I can spend my time out enjoying everything and come home to a spotless abode, too. $25 doctor visits sound pretty sweet as well, though I can hardly imagine getting sick somewhere so beautifully temperate.

Yes, it’s pretty fair to say that my ultimate retirement could look something like this:

HomesInMalta.com makes it all sound very simple and free of hassles, as I feel retired life should be, and the island is simple to travel to and from as well:

Travelling around Malta, whether to the beach, shopping in the city or a night at the theatre is simple. Wherever you are it shouldn’t take you more than 20 minutes by car.

The Maltese Islands are easy to get to from most major European airports, with flight times of 3 hours from London or Amsterdam, and 2 ½ hours from Paris, Frankfurt and Cairo. Flights are very regular and transport from the airport is easy and straightforward.

New Zealand
Imagine retiring in the land where the Lord of the Rings trilogy was filmed! While it can be difficult to qualify for permanent residency, this English-speaking country boasts a low cost of living and tons of gorgeous countryside to explore. No capital gains tax and an average rent of $900 per month is a good incentive to keep my passport current.

I always dreamt of honeymooning there, but I could really see living in New Zealand, enjoying the sort of outdoorsy lifestyle I wish I had the time to live here in the U.S., but with less overhead costs to worry about. One could even follow the example of the Maori and build a mud hut to save even further. That’s not my plan, however.

EmigrateNZ.org has some interesting information too about superannuation after retirement, which sounds rather attractive:

By law, you can work to any age you want to in New Zealand.

If you live here continuously for at least ten years, five of them after the age of 50, you get state superannuation at the age of 65. This is currently worth $249 per week after tax if you’re single or $383 per week after tax for married couples.

It’s not a windfall, but depending on your circumstances, you might be able to receive these monies in addition to your pension from a former U.S. employer. It could be a nice bonus, enough to bring your standard of living in retirement up a level.

This isn’t a bad view either, at any price:

Uruguay
Uruguay “feels like Europe but with Third World prices,” according to the article. Potable water is a must, but the stunning beaches are a definite plus. $35 doctor visits make it livable, but $5 movie tickets make it enjoyable when you’re not out in the great outdoors.

UruguayDreaming.com has a nice piece on the pros and cons of retiring in Uruguay, and lists some of the following perks:

• Permanent residency is relatively easy to get, and new residents can import their household goods tax-free
• The cost of living is half what you’ll find in North America or Europe
• Healthcare is inexpensive and high-quality

  All in all, there are some attractive elements to Uruguay as a retirement spot, however the cons mentioned in the article, including crime rates and lack of accessibility for the handicapped are definite concerns. Read the rest of this article »

Consumer Reports surveyed customers in an effort to find the best credit card companies when it comes to incidences of interest rate problems, incidences of bill-timing problems, and effectiveness of problem resolution. If you’ve paid for a subscription to Consumer Reports, you can view the results here.

At the very top of the list is USAA Federal Savings with a score of 95 out of 100. The first major credit card issuer on the list, American Express, scored an 84, and was followed closely by Discover.

Other notable scores include Citibank with 75, HSBC with 73, and Capital One with 71.

The only card I’ve ever had trouble with was a Best Buy card, which was actually operated by Household Retail Banking Services (aka. Household Bank, aka. HSBC). I had purchased a notebook computer many years ago with a 0% for 12 months offer to allow me to do some web work alongside by non-profit day job. I didn’t receive statements, and some of my payments were sent in late. I argued the point with customer service and was able to reverse the company’s decision to charge me back interest.

Many years later, I had some problems playing with 0% APR arbitrage using Discover and MBNA and didn’t attempt such schemes since. MBNA scored a 72 on Consumer Reports’ survey, just above Capital One.

Welcome, Consumerist and The Simple Dollar readers. Feel free to subscribe to the Consumerism Commentary RSS feed and stick around for a while if you like what you see.

Whether you’re Joe Torre or Joe Cubicle, your at-will (more aptly, fire-at-will) contract may come to an end unexpectedly. If you’re smart, you may have seen the writing on the wall and given yourself time to prepare. Life isn’t always that obvious, so you should be thinking ahead and protecting yourself. Here are some tips that you can start putting into effect now, particularly if you are not the sole controller of your employment destiny.

Keep three to six months in accessible funds. The term “emergency fund” is outdated. Keeping a large portion of your emergency money in cash-like vehicles like high-yield money market funds was a decent plan when you were able to get interest rates above and beyond 5%. Nowadays, savings accounts are not the best options, but you still need to consider the possibility of not finding a job—at least, not at your desired salary—for a long time.

The money you use in an emergency—when you have no income coming in—can be a mix of the following:

• Cold hard cash (a few days’ expenses). Only keep enough cash on hand for emergencies to hold you over until you can get more out from the bank.
• Highly liquid savings or money market account (expenses for one week to a few months). If you can use your ATM card to get this cash, then you shouldn’t have any problems. As you can see from the the latest savings account rates, you’re not earning much on this money, so keep the balance low. With the Fed poised to lower the target federal funds rate this week, you can be sure banks will drop their interest rates even further.
• Roth IRA (the current year’s contribution). You can liquidate and withdraw any amount you’ve invested in your Roth IRA without any taxes or penalties. If you do so, you will give up any anticipated earnings (or losses) on that money. You can refund your Roth IRA once you are no longer in an emergency up to that particular year’s maximum contribution as long as it is before April 15 of the following year.

• Credit. If you have good credit, and if you normally manage credit well, you can get by with using a credit card to pay for some expenses. This can be dangerous and is not advisable for most. If credit is your main form of emergency fund, an unexpected hospital bill during an unexpected unemployment stint could present expenses that will cost you a fortune for years thanks to interest charges.

  Mix and match the above keeping in mind what works best for you. If some of the other preparations are in good standing, you won’t have to use much of your emergency money if any.

  

  Keep your resume and portfolio current. While your resume should be tailored to any position for which you apply, you should have a basic resume off of which you build your specialized documents. Review your basic resume and update it with your current responsibilities. Any time you work on a new, significant project, complete a task that is worthwhile for the company, assume new responsibilities, or receive a promotion, update your basic resume. Have it ready to go.

  In the arts or in teaching, a current portfolio may often be the key to the next job. My girlfriend keeps a folder with some of the more impressive lesson plans and projects, as well as students’ work. While I was looking for a teaching job, I kept a portfolio that included music arrangements and videos of my instruction and ensemble performances. Artists certainly need to keep copies of recent work.

  Rather than scrambling at the last minute to gather all these materials, simply keep updating your folders as you progress. I’m forgetful, so if you’re like me, schedule reviews on your calendar to remind you to take a few minutes to make the additions.

  Always be networking. This doesn’t mean just going out after work with your boss whenever invited. Make friends in other departments and see as many people as possible related to your career goals. Always carry your business card. If your company doesn’t provide you with your own, make them yourself. If you create your own, keep yourself open to different avenues by not including any specific job title on your card. Include your name, basic contact information, and if you feel someone needs a reminder of who you are, jot a note on the card before you hand it to someone.

  I’m not going to get into the details of networking as the topic deserves its own article, book, or series of books. I’ve never been great at networking; Myers-Briggs classifies me as split between an I (introvert) or an E (extrovert)—I’m an introvert among strangers and an extrovert among friends. Pure extroverts make the best networkers.

  Get recommendations without asking. Part of my previous job at my current company was working with clients while planning official company events. I was not in the event planning department, but I found myself doing this work outside of my job description anyway. I’ve received thank you notes from other company’s CEOs as well as from senior executives from within my company. I’ve filed these away into a folder for any future needs. Personal notes from famous names and organization may help me someday.

  Any recommendations you receive from your employers should go in this file as well.

  Study your industry. There are two parts to this. First, you must make sure your knowledge is always current, especially if you are in a field like technology, where frequent advancements in the industry may change the way you operate. Take classes on the latest issues, even if they are not paid for or supported by your employer. If your field is more stagnant than software for example, then broaden your knowledge by learning about related topics.

  Second, always know what the market is like in your industry. Are your target companies in hiring mode, offering fresh graduates bonuses or high salaries to attract new, young, malleable talent, or are job openings at an all-time low? Is some other city becoming the worldwide hub in your industry? These are the things you can learn by talking to people involved in hiring, reading industry magazines, newsletters, and even internet forums, and looking at job postings frequently.

  Here’s a summary of the above:

• Keep three to six months in accessible funds.
• Keep your resume and portfolio current.
• Always be networking.
• Get recommendations without asking.

• Study your industry.

  Following these suggestions, you will likely be able to better handle an unexpected job loss psychologically and financially. If you’re always prepared, you should be able to find a new position relatively quickly. The quicker you are, the less you have to dip into your savings to pay expenses.

  I don’t have all the answers. Almost definitely there are other great suggestions for preparedness just waiting to be shared. Please feel free to leave some comments if you have other ideas or if you disagree with my thoughts.

  This article was updated on October 31 to clarify wording regarding 401(k) withdrawals.

From now into the foreseeable future, I will be presenting weekly giveaways. Each weekend, though this is a guideline and not a promise, I will select one commenter who has added value to Consumerism Commentary to be the recipient of a surprise gift. This is just a way of me thanking regular and quality contributors for visiting and sharing their thoughts and ideas.

You may have noticed that the latest giveaway for the free Sumo Lounge Omni chair attracted a large number of readers, 95% of whom stopped by to enter the contest after hearing about it somewhere else and never participated in other discussions before or after.

After thinking about this for not much more than a minute, I decided I’d rather find ways to reward frequent and avid visitors and participants. If you’re a lurker, now is the time to chime in with your thoughts on various discussions, as you never know who will be selected each week (or so).

Image credit: junkmonkey

In case you missed them, I’ve picked out a few excellent articles from the MoneyBlogNetwork that were published last week, as well as a few from other blogs. I’ve now split my weekly roundup into two posts, spaced within a few days of each other, because there are many articles I’d like to highlight. Please read these when you get a chance.

How Do You Define Middle Class? Free Money Finance offers MSNBC’s definition, but how do you define this particular socio-economic term? For me, the term doesn’t rest with absolute income limits; an annual $100,000 means two different things in New York City and Kentwood, Michigan.

Eight Ways to Invest in Yourself. Mighty Bargain Hunter presents some suggestions for creating an Income Plan B, including blogging and learning a second language. Perhaps a combination of the two would be sehr intéressant, sí?

Busy Days for NCN. No Credit Needed outlines his new will, life insurance policy, and new van. It sounds like someone is getting something done.

Priviledged Information. Tired but happy is on the board of directors of her son’s school, and now has access to extremely personal information belonging to the families of the school’s students. The data could be dangerous in the wrong hands. In a previous job, I had access to the salary and bonus information of several hundred of my company’s employees, and it was tempting to use that information for negotiation purposes. Rather, I ignored it, as it was depressing to look at.

Ten Money Questions for Jai Rodriguez. I saw Jai in Rent many years ago and met him in person when I made it to the second round in auditions for the second season of Queer Eye for the Straight Guy. (It would have been cool to have my home redecorated.) Here, Queercents asks Jai about appreciating the arts on a budget, good dates in New York, and money’s role in relationships.