Kerry K. Taylor, author of 397 Ways to Save Money and creator of financial blog Squawkfox joins Tom Dziubek today to discuss her book, currently available from Amazon.ca. Kerry explains how she paid off $17,000 of debt in six months and how to make drastic life changes. She also shares some of her favorite tips from 397 Ways to Save Money.
[00:00] Introduction from Flexo [00:39] Interview with Kerry K. Taylor of Squawkfox [01:33] — Paying off $17,000 of debt in six months [03:34] — Negotiating your first salary offer [04:47] — Maintaining a student lifestyle and standard of living [05:57] — Using any available tax credits and saving for retirement [08:18] — Moving to an organic farm and making other drastic life changes [11:36] — 397 Ways to Save Money [13:55] — How renting an apartment can make you rich [17:00] — How management fees deplete returns from your investments [18:07] — Other surprising tips from 397 Ways to Save Money [19:06] — Is the recent popularity of frugality just a fad? [25:20] End
A few years ago, General Motors was having trouble remaining in business, and its subsidiary that provided customers financing for automotive purchases, GMAC, converted to a bank holding company to take advantage of the Troubled Asset Relief Program (TARP), receiving $5 billion from taxpayers through the government. By this time, GMAC Bank, a division of GMAC, already offered retail banking, including savings accounts, certificates of deposit, and money market accounts.
In an attempt to distance itself from the faltering GM brand, GMAC Bank re-branded itself as Ally Bank, focused on offering a high-yield interest product, and began actively seeking new customers and depositors. Later, the bank’s parent company, GMAC, also re-branded itself to become known as Ally Financial. Today, Ally Bank offers some of the most competitive banking products.
Last year, I decided to become an Ally Bank depositor. Before doing so, I wanted to be confident that my money would be safe amidst General Motors’ impending bankruptcy. Funds deposited with Ally Bank are insured by the FDIC up to the recently raised limits. I won’t come close to exceeding $250,000 in this account. The Treasury had recently provided an additional $7.5 billion to GMAC, so Ally Bank’s immediate parent company was well capitalized at that time.
Here are my experiences from the bank account opening process. As I visited the website to begin my application, Ally Bank warned me that I would need my driver’s license (or an alternate state or military identification number) in addition to my social security number to proceed.
Like some other banks, Ally performs a credit check to verify identity, but they may also reject your application if you are viewed to be a credit risk. The possibility of rejection based on credit history is unusual for banks, but considering this bank is owned by a financing company that later became a bank holding company and this type of structure might increase in popularity, requiring credit checks for bank accounts may be part a new reality.
It look less than two seconds once I submitted my application for Ally Bank to inform me my application was approved. Once inside this virtual gate, I was able to choose whether I wanted to receive paper or electronic statements. I always choose electronic to cut down on paper waste, and I wish more services would offer this option from the beginning.
Here’s another great feature. Like ING Direct’s sub accounts, I could create as many separate savings accounts, with their own account names and numbers, as I wanted. (Ed. note: ING Direct became Capital One 360 in 2013.) At this point in the initial set-up, I could also add money market accounts and certificates of deposit.
I set up two separate savings accounts, both to be funded electronically from my ING Direct Electric Orange checking account. Like configuring linked accounts at any other bank, I will be required to verify two small deposits to ensure I am the owner of the linked account. Options for a one-time initial deposit or a recurring automatic savings plan are available.
Ally Bank then required me to create my security settings for viewing my account information and activity online. The bank has combined most of the security features that have become commonplace over the past few years. I created a user name and a strong password, including mixed case letters and numbers. I selected some secret code words, an image I can expect to see each time I log in, and three security questions and answers. Ally also provides the option for registering the computer you mainly use for accessing the website to avoid repeated security questions at each online session.
If Ally Bank does not recognize the computer you are using to log into your account, they will send you an email with a single-use password to further confirm your identity. I have not seen this feature implemented anywhere else.
Using the Ally Bank savings account
Once logged in, I was impressed with the clean look of the interface.
Ally Bank supports Intuit Quicken and Microsoft Money through Web Connect, which means you can log into the bank’s website and download your activity. At this time, you cannot automatically download your Ally accounts’ activity through Quicken directly (“Direct Connect”). If you like Excel for reconciling your account, Ally offers a flat comma-separated values spreadsheet for download.
Transfers among your Ally accounts and to and from your linked bank accounts are free, but keep in mind that savings accounts and money market accounts are limited to six withdrawals per period by the government.
Ally Bank charges no account maintenance fees and there is no minimum balance. If you exceed the six withdrawals mentioned above, Ally will charge a $10 fee. Cashier’s checks and wires carry an additional cost. A returned deposit item, if a check you send bounces or if you don’t have funds in an external account to cover a transfer, will cost $7.50.
The bank is also drawing attention to their 24-hour customer service availability and the plain language used throughout their website. I have not yet worked with Ally’s customer service, but I will be sure to report any future frustrations.
Opening my account with Ally Bank was painless and quick, and I like how the website operates so far. After my initial deposit is transferred, I will have a better idea of how quickly funds are available and can be transferred back to external accounts. I will return with more information at that time.
The main question I have moving forward is how long Ally Bank will be able to maintain their position as one of the highest among high-yield savings accounts. Bank have long used high interest rates to lure new customers only to drop the rates when they become confident in their position as leader, like ING Direct, or when the bank changes ownership, like Washington Mutual.
The American Bankers Association (ABA) sent a letter on May 27, 2009 to the FDIC requesting that Ally Bank be forced to lower their deposit interest rates, citing the bank’s unfair competitive advantage. It is unfortunate that the ABA would take this stance with savers forced to settle for interest rates that will not reach the rate of inflation going forward. The ABA has since removed the letter from the organization’s website.
Like I said above, I am not concerned with risk to the liquidity of my deposit despite Ally Bank’s association with GMAC and General Motors. If the worst happens to General Motors, Ally Bank should remain relatively unaffected.
In March, we paid our tax bill of over $3,300 using that card, so the 2% rewards were higher than normal. I asked a friend of mine who knows a lot more about the stock market than me what stocks were catching her eye, and on her unofficial recommendation I bought 60 shares of CAR, the Avis car rental people.
That was April 17th. The stock price was $1.50. With a $9.95 commission at Sharebuilder, I ended up “spending” a total of $99.95.
And then I watched as the stock price just rose and rose and rose.
On about May 20th I started wondering if I should sell my proceeds. We’ve had rather more pet problems than usual and I was a little worried that our upcoming vacation might suffer as a result. The “overall return” on that investment, according to Google Finance, was hovering around 200%, which is a heck of a lot more than the 7 to 9% we’re taught to expect from long-term investments.
So I sold it on May 27th. I was a bit alarmed to see that there was yet another commission of $9.95. To me, that’s like paying a toll over a bridge going in each direction.
Stock proceeds: $282.24 Minus original investment of $99.95: $182.29
If you’re interested in tracking your money with Intuit Quicken 2009, and you’d like to upgrade to or install the newest versions, there are three days left before prices for the software go up. On June 1, no discounts will be offered on Quicken software, and if discounts do return later, they may be not as generous.
I’ve been an avid Quicken user for several years, after switching from Microsoft Money. It appears that Mac users are unfortunately still out of luck, with no new releases of Quicken for Mac since the 2007 version was released in 2006.
Here are the discounts, valid until the end of May. Note that some discounts have already expired.
Chase is offering a $100 bonus if you open a checking account by July 7, 2009. There is no maintenance fee with this checking account as long as you activate a direct deposit or use your debit card for purchases five times each statement period. There is no minimum balance requirement, but an initial deposit ... Continue reading this article…
The latest data show again that you shouldn’t expect to make more money from buying and selling the house you live in than you would from investing in stocks. In fact, you could do better with government-issued inflation-protected bonds. This isn’t just a result of the recent decline in home prices, 19 percent over the past ... Continue reading this article…
March 9, 2009 was a bad day to retire. On that day, the Dow Jones Industrial Average hit its bottom of 6,547, a low not seen since 1997. If you followed mass-market retirement investing advice, you may have entered retirement with a portfolio 100 percent invested in a stock market index, like the S&P 500, whose ... Continue reading this article…
According to Alan Greenspan, this is of the first types of spending that consumers give up when a recession is felt personally: When men come to the point at which they need to save more money than usual and decide to cut bank their spending, underwear is at the top of the list of possible ... Continue reading this article…
I’ve often written here about the disappointing lack of financial education in schools, and it’s this same dearth of vital information that has apparently led to a new special airing on ABC this Friday: Schools teach us almost everything, but not “Money 101.” For the basics on finance, turn to UN-BROKE: What You Need to ... Continue reading this article…
It is human nature to search for Truths that describe the world we live in. This is one reason why personal finance gurus are so popular amongst a group of individuals that listens. Many of the more popular authors, seminar leaders, and cult favorites stick by their mantras, Grand Unifying Theories, such as “credit cards ... Continue reading this article…
Today’s podcast features an interview with J.D. Roth from popular blog Get Rich Slowly. J.D. talks with Tom Dziubek and me about how he was inspired to begin writing about personal finance and his decision to leave the corporate world behind and take his passion to the next level. Tom also speaks with Bryan J ... Continue reading this article…
When DVDs (and before them, Laserdiscs) were new, I really used to enjoy listening to the commentary tracks. Granted, some were better than others, but I couldn’t seem to get enough of the “behind the scenes” talk, and to hear the cast and crew telling funny stories about each other. Those don’t interest me as ... Continue reading this article…
While researching companies for possible career moves — an occasional hobby of mine before all of my extracurricular time was spent working on Consumerism Commentary — it has been difficult to find reliable information about one of the biggest benefits companies can offer, the 401(k) retirement plan. As an outsider to the company, you cannot ... Continue reading this article…
I offered to write articles for Quicken occasionally, and the first of these articles was published yesterday. It focuses on trimming budgets and expenditures. President Obama has proposed cutting the federal budget by $17 billion. That’s a large amount of money, but it’s a tiny slice, 0.5 percent, of the total federal budget. Here is an ... Continue reading this article…
Yesterday, the House of Representatives voted on and passed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, the Senate’s alternative to the Credit Cardholders’ Bill of Rights. Here are some of the provisions, taking effect in February 2010: Credit card companies must give 45 days notice before raising interest rates. Under current ... Continue reading this article…
In February, Congress passed the American Recovery and Reinvestment Bill of 2009, otherwise known as this year’s stimulus bill. One small part of this bill allows first time home buyers (anyone who hasn’t owned a home in the past three years) to qualify for a $8,000 tax credit. For individuals or families hoping for some ... Continue reading this article…
June 12, 2009 is the final day that full-power television stations will broadcast in an analog over-the-air signal. The date was originally set for February 17, but due to broadcasters who needed more time and congressmen who felt the public needed more time to understand the transition, the deadline was extended until next month. This ... Continue reading this article…
In a sweeping vote of 90 to 5, the Senate passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, including the sole unrelated amendment to restore weapon carrying rights in National Paks. The bill differs from the Credit Cardholders’ Bill of Rights Act of 2009, passed earlier by the House of Representatives. ... Continue reading this article…
We spend our life in modern society accumulating Things and possibly accumulating money. When you take a step back and look at life on the larger scale, money is not a goal in isolation. We strive to accumulate wealth not to die with our names in various banks’ computers associated with high numbers. There must ... Continue reading this article…
Luke Landes founded Consumerism Commentary in 2003 and has been building online communities since 1990. Luke has contributed to PC World Magazine, US News, Forbes, and other publications. Read more about Luke and about Consumerism Commentary.
Content on Consumerism Commentary is for entertainment purposes only. Rates and offers from advertisers shown on this website may change without notice; please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.
Advertiser Disclosure: Many of the savings offers
appearing on this site are from advertisers from which this website receives compensation for being listed here.
This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.Editorial Disclosure: This content is not provided or commissioned by the bank advertiser.
Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.UGC Disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser.
It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.