As featured in The Wall Street Journal, Money Magazine, and more!

May 2011

Savings accounts and money market accounts are different from each other practically in name only. From a saver’s perspective, there is no difference between these types of accounts. There are many misconceptions about the supposed differences between savings accounts and money market accounts, and if you’ve ever tried to learn about these differences online, even from reading major banking industry websites, you may have received a great deal of misinformation.

I am not infallible; if you believe any of the information included below to be incorrect, let me know.

Withdrawal limits

Whether you open a savings account or a money market account at a bank in the United States, the bank applies your cash to their books as an asset and records a liability in the form of your deposit. The government considers both savings accounts and money market accounts as deposit accounts, not transaction accounts. Savings and money market accounts are not meant for frequent transactions. They are both limited by Regulation D, a Federal Reserve Board regulation that indicates that customers may make only six pre-authorized withdrawals from deposit accounts. ATM and teller withdrawals do not count against this limit, but debit card transactions, checks, and online transfers do. You may have read in various places online that only money market accounts are limited to six withdrawals, or you may have read that only savings accounts have this limitation. The limitation applies to all deposit accounts.

Interest rates

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This is it. Somehow, I’ve survived Giveaway May, having operated contests every weekday this past month. Many winners have not yet been contacted, so if you haven’t heard from me, hang tight. The rest of the winners will be contacted within the next few days, and all winners will be announced on Consumerism Commentary. Each winner is chosen randomly (using the random number generator at random.org) from among those who have successfully completed any and all tasks required for that day.

I’m excited to have Wise Bread as a partner for the final giveaway this month at Consumerism Commentary. Wise Bread is one of the foremost blogs covering the topics of money and frugality. I’ve written a few articles for Wise Bread, as well, and I plan to write more as time allows. Thanks to Wise Bread and Will Chen, we can offer readers $200 in Amazon.com Gift Cards today. Consumerism Commentary will match a $100 gift card for Amazon.com from Wise Bread with the same. Today’s winner will walk away with $200 to spend at the online store.

Here is what you’ll need to do by 11:59 PM Pacific Time on May 31, 2011 to be entered into today’s giveaway.

  1. Follow @luke_landes on Twitter. If you’re already following @luke_landes, you can ignore this step.
  2. Follow @WiseBread on Twitter. If you’re already following @WiseBread, you can ignore this step.
  3. Find your favorite personal finance blog on Wise Bread’s top 100 pf blogs chart. See this screenshot for detailed instructions. (Choosing Consumerism Commentary will not increase your chances of winning the giveaway, but it will make me smile!)
  4. Tweet: “My favorite blog [blog's Twitter handle or name] is #[ranking] on @WiseBread’s #top100 chart http://bit.ly/toppfblogs” by 11:59 PM Pacific Time on Tuesday, May 31, 2011. (For example, a suggested Twitter message might read, “My favorite blog @luke_landes is #12 on @WiseBread’s #top100 chart http://bit.ly/toppfblogs.”)

Thanks, and good luck!


I always encourage parents to find interesting ways to teach their children about responsible money management. When I do, I always lean toward behavior modeling. Children who, even at an early age, see their parents engaging in a positive relationship with money will subconsciously take what they observe to heart more than any explicit lessons they attempt to impart. Teaching financial literacy in schools is mostly a lost cause, as teachers aren’t trained for it, there isn’t enough room in the curriculum, and as Ramit pointed out, most students just won’t care enough about the subject for the lessons to have an effect. The responsibilities for teaching these lessons remains with the parents, and with many parents failing with their own money management, a good solution is almost impossible to design.

Using money as a motivational tool for children is dangerous, yet it’s common for parents to reward their children for bringing home good grades on the report card. Policies range anywhere from incentives only for As to a staggered system of rewards for any passing grade, with As receiving the highest monetary prize. These types of reward system broadcasts a few messages:

  • Results are what matter, regardless of effort or method of achieving those results.
  • Good results are rewarded with money.
  • In the case of the tiered system, mediocre results are rewarded, as well.
  • Money is the best type of reward, and success and effort are only worthwhile if a monetary reward is available.

I don’t see how any of these messages reinforce a positive relationship with money.

Results are what matter, regardless of effort or method of achieving those results. Children will link good grades with money. While most students achieve good grades by studying, working hard, paying attention in class, perfecting homework, and performing well on tests, a select frustrated few might take some shortcuts. Cheating is one way to get good grades, at least until the cheater gets caught. On the other hand, for a child who excels “naturally” in a class, they might achieve an A without any effort. In this case, the student could believe they will be ale to sail through life without developing the skills that will be necessary for their success in other tasks. Results matter, but so do attitudes and values.

Good results are rewarded with money. I often hear parents say that they wish to pay students for the work they do because this is how the real world works. I have two issues with this as it pertains to grades. First of all, students will come to expect to receive money when they perform well. Anyone who has worked in an office where people receive a pay increase just for being there or where people receive promotions based on their coziness with the boss rather than performance can attest to financial rewards are not necessarily linked to good results in the “real world.” THe distribution of money is often unfair.

Mediocre results are rewarded. Any monetary reward is enough to associate money with grades, and if there isn’t much perceived difference between the rewards for receiving grades of C, B, and A, then the children subject to this system will aim for the lowest rewarded score.

Money is the best type of reward, and success and effort are only worthwhile if a monetary reward is available. The world needs people who are solely motivated by money. I don’t think this is a complete loss unless every child decides to seek a path that they believe will lead them to the most money throughout their lifetime. This is the result of an increased focus on giving only money to children as rewards. Education and performance should be its own reward. If children see parents who value the lessons taught by schools and if parents reinforce the teachers’ goals and side with the teachers when it comes to completing work on time and accurately, they might have a better chance of getting the impression that what they are learning is important and knowledge is valued in society.

Bribing children with money if they bring home good grades is often a last resort to motivate a student when nothing else seems to work. I can’t fault any parents who have tried everything possible to help their students perform well in school, including finding tutors and seeing behavioral psychologists who specialize with children. Motivating with money doesn’t always have to be bad. If it is balanced with other messages, there is a better chance of children growing up to have a healthy relationship with money.

Disclaimer: I do not have any children, so I haven’t had any practical experience with this. I’m interested in hearing readers’ thoughts, especially from those of you who have children and have considered paying or do pay rewards for report card performance.

Update: A few days after writing this article, I came across this review and summary of Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink. The research outlined in this book confirms some of my thoughts about motivation that can be applied to this situation, and goes much further.


To readers in the United States, happy Memorial Day! For Americans serving overseas — please arrive home safely.

Many of us had long weekends for the holiday; I spent the weekend traveling. A friend of mine got married recently, and rather than having the traditional wedding, their marriage was private and followed by a honeymoon; when they returned, they celebrated with friends and family with a traditional reception. I traveled with my girlfriend to upstate New York to participate in the festivities. I also had a chance to revisit the town that I lived in from age two to ten. It was my first time back in many years, and the town has changed, with more big-box stores, more chain restaurants, more highways, but still a lot of undeveloped land.

Today, I’m back in New York City, celebrating Memorial Day with my girlfriend’s family. Today, MoneyCrush is joining as a partner for the latest giveaway in Giveaway May at Consumerism Commentary. Every weekday this month, including today’s holiday, Consumerism Commentary is providing a luck reader with a prize. In addition to my $50 Amazon.com Gift Card, Money Crush will be providing the same, making today’s prize worth $100 in total.

Here is what you’ll need to do by 11:59 PM Pacific Time on May 30, 2011 to be entered into today’s giveaway.

  1. Subscribe to the Consumerism Commentary RSS feed using your favorite RSS reader. You can use these buttons to add Consumerism Commentary directly into your favorite software, and if you’re already a subscriber, you can skip this step.
  2. Subscribe to the Money Crush feed using your favorite RSS reader. You can use these buttons, and if you’re already a subscriber, you can skip this step.
  3. Leave a comment here by 11:59 PM Pacific Time on Monday, May 30, 2011.

If you win, you’ll need to meet all the conditions outlined in the Giveaway May introduction. Good luck!


Podcast 110: George Hobica, Airfarewatchdog

by Luke Landes

Today’s guest on the Consumerism Commentary Podcast is George Hobica, president and founder of the travel comparison website Airfarewatchdog. George discusses Airfarewatchdog, how the site works in finding low air fares, several great deals many people don’t know about and offers many airline travel tips. Consumerism Commentary Podcast #110 George Hobica, Airfarewatchdog: S05E06 / 134 ... Continue reading this article…

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How to Design and Stick to a Flexible Budget

by Luke Landes

While it may not be the most exciting activity in the world, building a budget is one of the most important pieces of getting your financial life on track, especially if you’re starting from a particularly precarious point. When I first realized I needed to improve my money situation, I was in debt and had ... Continue reading this article…

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Federal Reserve’s Secret Bailout Helped Banks Profit During Crisis

by Luke Landes

While the Federal Reserve was publicly providing money to member banks at interest rates of up to 0.5 percent during the financial meltdown of 2008, a different, less public program bailed out Credit Suisse, Goldman Sachs, and Royal Bank of Scotland with short-term loans with an interest rate of only 0.01 percent. Those banks received the bulk ... Continue reading this article…

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Life After Salary: Structure and Motivation, Five Months Later

by Luke Landes

This is part of an on-going series about my life after salary — my thoughts and concerns pertaining to my resignation from my day job to focus full-time (and more) mainly to the website I created in 2003 and has grown into a business with a life of its own. I’ve previously looked at structure ... Continue reading this article…

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Today’s Giveaway: $100 in Amazon.com Gift Cards

by Luke Landes

Before heading into Memorial Day weekend, why not win $100 to spend on Amazon.com? All this month, I’ve been hosting giveaways as part of a project I’m calling Giveaway May on Consumerism Commentary. Every weekday during this month, I will be giving away at least a $50 gift card, and almost every day the prizes ... Continue reading this article…

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Free Triple Credit Score with GoFreeCredit.com

by Luke Landes

This review of the Free Triple Credit Score with GoFreeCredit.com was published in 2011. According to a representative from the company, the platform has been updated in the intervening years and some details from this review no longer apply. Today, GoFreeCredit.com works directly with TransUnion to provide a score and three-bureau credit monitoring for $17.95 ... Continue reading this article…

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Don’t Run on Empty, and New EPA Stickers for New Cars

by Luke Landes

Before my girlfriend purchased a new car, she was always careful to refuel her old car before the gas gauge dipped below a quarter of a tank. I’ve been living on the edge, letting my gauge drop to one-eighth of a tank or less before refueling. Her concern was that the gauge didn’t seem very ... Continue reading this article…

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Today’s Givaway: $100, $200, or More!

by Luke Landes

It’s another weekday in May, so it’s time for another giveaway. This month is Giveaway May at Consumerism Commentary, and it’s been quite a ride. The purpose of this is to thank Consumerism Commentary readers, new and old, and expose readers to some of the great partners that have lined up. Today I’m happy to ... Continue reading this article…

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Discover Motiva Card Review

by Luke Landes

Most credit cards offered to consumers today are built the same way. Provide a mediocre interest rate with a 1 percent cash back rewards program and a couple of perks and you have 99 percent of the market covered. The challenge lately has been finding a credit card offer that goes beyond “state of the art” and ... Continue reading this article…

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Today’s Giveaway: Win a Free iPad 2

by Luke Landes

All this month, I’m celebrating Giveaway May at Consumerism Commentary. Each weekday brings a new prize to be given to Consumerism Commentary readers. Each day I’ve been offering at least $50 per day, and I have invited a number of partners to participate in this series of giveaways to help sweeten the pot. For the ... Continue reading this article…

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HBO’s Too Big to Fail

by Luke Landes

Last night, HBO premiered Too Big to Fail, a movie based on Andrew Ross Sorkin’s book, Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System — and Themselves, based on the events of the financial meltdown of 2008 starring Bear Stearns, Lehman Brothers, Goldman Sachs, ... Continue reading this article…

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Reevaluating My MBA From the University of Phoenix Online

by Luke Landes

From 2003 to 2006, I took classes at the University of Phoenix Online with the eventual grant of a Masters in Business Administration (MBA) degree. After receiving the degree, I wrote about my experiences with the school in a five part series. For some background, read the series in these parts: The Decision, Admissions, Course ... Continue reading this article…

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How the Sausage Gets Made

by Luke Landes

No one wants to know how the sausage gets made. I admit that most people would find the last few years of my life somewhat strange. I started on a path to improve my finances about ten years ago. I saw my lack of savings and my increasing debt, and I started trying to determine ... Continue reading this article…

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Avoid These Big Money Wasters

by Luke Landes

CNN is offering a compilation of the ten biggest money wasters. These items would be obvious to most loyal Consumerism Commentary readers, yet it would not be out of the question to disagree with some of these money-wasters in some circumstances. ATM fees. You shouldn’t be surprised that banks will charge multiple fees for the ... Continue reading this article…

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Win $50 For Gas Fill-Ups Plus $50 For Amazon.com

by Luke Landes

It’s another week in May, so it’s the start of another week of giveaways. This month, Consumerism Commentary has embarked on a project I am calling Giveaway May. Every weekday, I will be giving away at least a $50 gift card, and most days I will have a partner or sponsor to help enhance the ... Continue reading this article…

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Podcast 109: Crazy About Money

by Luke Landes

Today’s guest on the Consumerism Commentary Podcast is Dr. Maggie Baker, PhD, author of Crazy About Money: How Emotions Confuse Our Money Choices and What To Do About It. Dr. Baker has been a practicing psychologist for 30 years, focusing on financial therapy and ADD/ADHD. Consumerism Commentary Podcast #109 Crazy About Money: S05E05 / 133 ... Continue reading this article…

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