Author: derek

For quite some time I have held online savings accounts at both ING Direct and HSBC and have generally been an extremely satisfied customer. There were – and still are – a few minor issues with HSBC Advance that always frustrate me a little.

Similar to when I continued to drag my feet on moving from ING Direct to HSBC in order to take advantage of the higher savings rate, I have recently been contemplating a move from HSBC over to the American Express Personal Savings account. When the direct mailer arrived the other day from American Express, I finally decided to make the move and leave the 1.0% APY of HSBC behind in favor of the 1.30% APY being offered by American Express.

First impressions of American Express

The sign-up process was a piece of cake and only takes a few minutes to complete. As you complete the application there is the customary note that there will be two test deposits made to your linked account and that you need to confirm the amounts before your linked account will be active. All pretty standard.

One thing that I don’t recall from when I signed up with ING Direct or HSBC though was the fact that I could not even log into my account and explore the interface until the test deposits were confirmed. This was a little disappointing as I had been looking forward to exploring the user interface and getting a feel for all of the features and options available. Unfortunately, the wait to access the user interface did not live up to my anticipation.

As you can see above, American Express Personal Savings has a rather bland user interface. However, while it may be bland I do give it two thumbs up as it avoids a few of the things that I dislike about the HSBC Advance interface such as pop-up windows for bank-to-bank transfers and obscure locations for key information. So while it might not be as flashy as the ING Direct interface that I particularly like, there is a good degree of function over form.

At this point I am still waiting for my initial deposit to process but I have gone ahead and created my recurring deposit. It will be interesting to see how the timing of deposits compares to the HSBC transfer time that has always been a disappointment.

Where ING Direct still shines…

There is no question that I will enjoy the slightly higher savings rate of American Express Personal Savings compared to ING Direct, but there are a few features at ING Direct that I have come to truly appreciate yet have not found duplicated anywhere else.

In the screen shot above, I have highlighted three key pieces of information that ING Direct offers on their accounts that I regularly check when I am accessing my account. While the information doesn’t really impact my account in any way, there is something reassuring about easily being able to see the current APY, how much interest I have earned this month, and how much interest has been paid during the current year.

Over at HSBC Advance, I am still not quite sure if you can find the current APY listed anywhere within your account as I have poked around and not been able to find it. The fact that they don’t make it readily available almost makes it feel like they don’t want you to recognize that they are lowering the rate on a regular basis. At first glance, it doesn’t look like the American Express Personal Savings account will have this information visible either.

From the time I began using ING Direct, I have been addicted to the display of the interest earned in the current month. Maybe it was because I wasn’t used to having money saved instead of going towards debt, but logging in and seeing an extra few pennies in those early days had a way of motivating me to save even more. Anyone that runs their own blog knows what that can be like as they check their stats every twelve seconds.

Good, but not the best

Making a move to the new American Express Personal Savings account has been a good if only because of the slightly higher savings rate than both ING Direct and HSBC Advance. The user interface might leave a little to be desired, but it does appear to be a significant improvement over the HSBC interface that lacks consistency and clarity.

There are other savings accounts on the market that are currently paying even better rates than American Express, however after being a satisfied customer ever since my first American Express balance transfer (although I hope this goes more smoothly) I don’t necessarily mind the few dollars if everything else is top notch.

Time will tell whether or not I am tempted to explore an account with EverBank (who seem to have the highest rate at 2.01% APY) but I would welcome feedback from you on your experiences with any of the above mentioned savings accounts.

It is not what you know, but who you know.

Surely you have heard that phrase once or twice before and maybe you have anecdotes that would support the meaning of the phrase. Speaking from personal experience, I am certain that my first job out of college was obtained not only because I was qualified but because one of the executives used to work for my father.

Could this same theory apply to the college that you attend and the salary that you can earn? There is no question that certain colleges and universities provide a distinct name-recognition value that can open doors for graduates.

Schools that provide the highest salary potential

In a recap of a recent Payscale.com salary report, Yahoo! Finance listed the top eight schools as ranked by mid-career median salaries. It should come as no surprise that these schools also come with a hefty price tag for their annual tuition. Here is a breakdown of the schools along with the mid-career median salary and the annual tuition:

• Harvey Mudd College :: $126,000 salary :: $40,390 tuition
• Princeton University :: $123,000 salary :: $36,640 tuition
• Dartmouth College :: $123,000 salary :: $40,437 tuition
• Harvard University :: $121,000 salary :: $38,416 tuition
• California Institute of Technology (CalTech) :: $120,000 salary :: $36,282 tuition
• Massachusetts Institute of Technology (MIT) :: $119,000 salary :: $39,212 tuition
• Stanford University :: $119,000 salary :: $39,201 tuition
• Colgate University :: $119,000 salary :: $41,870 tuition

Is there real value?

The above mentioned schools are indicated to provide the most valuable educations, but what is the cost of that value? With each school carrying an annual tuition in the neighborhood of $40,000 per year, one is paying quite a bit for that perceived value.

As I have mentioned before, one financial decision that I would make differently is to attend the local state university as opposed to a private university. The cost savings in tuition would have meant less in student loans as well as less burden on my parents. In my heart of hearts, I truly believe that my earning potential would not have been limited had I attended the local state school.

Awhile back there was an article on CNNMoney.com that provided three ways to save $400,000 and guess what was included among those three ways – yep, college costs. That article appears to support my belief that I would be where I am today regardless of the university that I attended.

Research shows that students with similar academic abilities earn the same whether they attend top schools or less selective ones.

A better judge of value

Rather than simply look at the mid-career median salaries to determine what schools offer the most valuable education, one might want to consider the overall cost of tuition compared to the earning potential. Would you rather spend $160,000 for an education with a starting salary of $60,000 or $40,000 for an education with a starting salary of $35,000?

These numbers are completely arbitrary but demonstrate that attending one of the prestigious universities may put you in a considerable hole financially that the slightly higher earning potential will have diminished returns.

As a firm believer in the fact that the individual determines their own earning potential based on their work ethic and ability, I would think twice before attending one of the schools mentioned above simply to benefit from the potential boost in pay.

What are your thoughts on how your school influences your salary?

With the Christmas holiday quickly approaching, I’ve noticed that a number of previous posts here at My New Choice are still quite popular with visitors to the site. As you’re finishing your holiday shopping and wrapping presents for your loved ones, take a moment to read these popular posts:

• Do you tip contractors?

  The subject of tipping is always popular during the holidays as the question of protocol comes into play with a number of people: mailman, newspaper delivery man or woman, and hair stylists. When my wife and I were having work done on our house, we wondered what the protocol was for tipping contractors. Check out the discussion in the comments too.

• Another contractor going home with no tip

  After making our decision on whether or not to tip the contractor, we looked at why so many people feel the inclination to tip people and came up with a general set of rules. But could it really be that simple? How does this approach differ from how you handle who to tip and who not to tip?

• How shopping online has changed the way we shop

  How much of your holiday shopping was done online versus visiting brick-and-mortar stores? In our household, my wife did the majority of her shopping in the stores while I did most of my shopping online. While some people prefer the physical act of visiting the stores and fighting the crowds, there are a number of benefits that can be realized by shopping online. Which of these benefits have you found in your shopping?

• How to handle a financial windfall

  Most people would welcome the opportunity to have a pile of cash dropped in their lap, but are they truly prepared to handle the financial windfall? Too many people are completely unprepared and ultimately end up exhausting the money on little purchases here and there. Here are a few sound principles to remember should you find yourself with an influx of money this holiday season.

Here is to hoping that you find the above posts to be helpful, or at least mildly interesting, during the holidays and that you have a happy holiday season with your family and friends!

As the new year approaches, remember to make the new choice to manage your finances to become debt free, financially independent and retired early!

We all know the traditional wedding vows that discuss sickness and health, love and cherish, and all that other good stuff until death do us part.

But there isn’t any mention of hiding purchases from your spouse.

Given the number of marriages that dissolve due in large part to financial reasons, it should come as no surprise that so many spouses are hiding purchases from their spouse.

According to an article on Yahoo! Finance, approximately 80% of married people hide some spending from their spouse. For women and men alike, the purchases most often hidden are clothing and accessories at 43% and 24% respectively. When looking at the second most hidden purchase, there is a clear separation between the men and women as 21% of women have hidden gift purchases while 19% of men have hidden alcohol purchases.

Why are spouses feeling the need to hide these purchases?

In some cases there may be unscrupulous reasons, as evidenced by the Yahoo! article that indicates 4% of husbands and 1% of women have hidden purchases on dating websites.

However, generally speaking, many of the purchases that are hidden are much more innocent in nature. The new skirt. The new tie or shirt. A haircut and color – spending anything more than $10-15 on your hair is just a foreign concept to most men.

Communication is lacking.

As mentioned earlier, money plays an important role in many marriages and unfortunately, that role is often one of stress and fighting. By hiding a purchase, one spouse may feel that they can simply avoid the potential argument about how they spend money.

This may work for awhile, but eventually the other spouse will learn of the purchase and the fact that it was hidden. Not only can this cause further tension regarding finances, but it may also introduce doubt into what else is being hidden.

Whether it be hiding purchases or general financial issues in a marriage, more often than not it has to do with a lack of communication between partners.

In drastic cases, one spouse may be hiding an entire account (whether that be a checking / savings account for discretionary spending or a secret credit card) that is used to keep their activities under wraps. In less severe cases, husbands might be hiding a round of golf here and there while wives might be hiding a manicure or the latest Coach purse.

Regardless of the secret, keeping them from your spouse is building your marriage on an unstable foundation.

Now, that doesn’t necessarily mean that every purchase has to be discussed and approved by both spouses. It is entirely possible to be open and honest about the amount of money that is being spent without disclosing where each and every penny went.

Give open, honest communication a try.

Couples that argue about money are more likely to hide purchases from one another, which ultimately causes more arguments about money when the purchases are revealed. Rather than continue that cycle in your own relationship, try to be as open and honest about how money is being spent in your relationship. It might sound silly to do as an adult, but one great way to resolve the desire to hide purchases from one another is to utilize an allowance.

While keeping purchases a secret may not always represent an unhealthy relationship, you will likely find that openly discussing money and how it is spent will bring you and your partner closer together and minimize an area of potential conflict.

Have you ever hidden a purchase from your spouse?

What were you hiding? And why?

Why is it that some of us are like bees, good at saving money, and others are still living paycheck to paycheck even though they are well into their forties? “The child within” theory is finding more and more proponents.

This theory holds that our spending habits are formed in childhood. People who are bad at saving grew up in poverty and learned that money must be used as intended when it comes by. Or they were born in fabulously wealthy families, and their parents took them shopping as a pick-me-up.

As you can see, there is plenty wrong with this theory.

It does not take into account the fact that someone who was poor would learn to save as a means of ensuring security, or that you do not stay rich by squandering your financial resources. This is not to say that consumption models are not acquired in the family. Our parents influence us in every way.

But there is more to it.

Marketing experts are always looking for new and more efficient ways to cheat us out of our hard-earned cash. One such way is by stimulating impulse buys. Souvenirs are a typical example. If you were on a vacation somewhere and really enjoyed it, you would be likely to buy a souvenir reminding you of that time as a way to let the memory linger. You end up buying some ridiculously overpriced item that you do not know where to put later. It ends up going in the bottom drawer of your desk.

Impulsiveness itself is a generalized trait. Some people never work on this, and they are every salesperson’s dream. They march into the store, fall in love with something, and march back out with it.

In some cases, this involves shopping therapy but usually, it is just the trait. They never work on this because it is a source of great pleasure. Plus, they usually have enough money to afford living like this, either because they make a lot or because someone supports them.

One of the biggest myths is that human beings are rational.

Nothing could be further from the truth. Homo economicus is a dying breed, if it ever existed. How many commercials appealing to reason can you think of? One, two at best. Producers target our emotions and instincts. They use emotions like joy, satisfaction, prestige, happiness, freedom, and nostalgia to turn our attention to their products.

Sex and marketing is a whole separate topic.

Advertisers use non-verbal techniques like pictures and music. Verbal messages involve risks – they are processed cognitively, while techniques appealing to emotions yield fast reactions. And with the endless supply of goods and services for all tastes, fulfilling needs you did not even imagine you had, it is a wonder that some people manage to save any money whatsoever.

Some people are not tempted by the wide array of items on sale. When they drop by the supermarket for bread and some cheese they buy just that. Certain individuals are blessed with inborn prudence. It can verge on stinginess. There is a fine line.

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Melissa Dean writes for http://www.creditcardreview.ca/blog/, a website offering an unbiased perspective on Canadian lending industry.

The banking industry has undergone numerous changes over the years making it important for consumers to stay abreast of changes to manage their accounts well.

The consequences of making mistakes while managing your checking account can not only be embarrassing in the case of returned checks but also very costly.

Banks have been criticized for charging excessive penalty fees as well as failing to conspicuously disclose important information for various accounts. Wasting money on fees and penalties is not necessary and can be avoided by practicing the following tips.

• Find the right bank. Not all banks are created equal. Each institution has unique accounts, terms and policies making some better than others. Take the time to compare banks – both local branches and virtual banks which operate online. Understand your own banking needs and spending habits to find a bank and account that is best suited for your personal habits.

• Play by the rules. Before you open an account, carefully read the terms and conditions as well as individual policies to ensure you know how to manage your account. By becoming familiar with these rules you are in a better position to actually manage your account accordingly. Just because the banks don’t always draw attention to their policies, it is your responsibility to seek out this information and follow the rules to avoid mistakes which can lead to fees and loss of money that could be used elsewhere in your budget. Specifically you should understand policies regarding how long your bank will hold deposits, how your bank handles an overdrawn account and what protection is offered in the event of fraudulent use of your account.

• Track all transactions. The key to managing your checking account is simply paying attention and tracking all transactions. This may become increasingly difficult in an era where consumers frequently use debit cards for day-to-day transactions as well as electronic deposits and payments. It is imperative that each and every check, debit card purchase, electronic payment, automatic payment and deposit is logged in your check register.

• Take advantage of online features. Most banks today offer customers the option of managing their account online. This can include online bill pay, transferring money between various accounts or simply logging on to balance your check book. The advantage of routinely checking your account online is the opportunity to spot and in some cases correct errors before they result in an overdrawn account.

• Money management tools. Another benefit offered by technology is the ability to sign up for free money management tools via the Internet. There are dozens of websites that help consumers create a budget, track spending and many even link to your bank account and other accounts to automatically update financial information. This can be very useful for people who juggle several credit card, savings, investment and other accounts by providing a “one stop shop” to manage their accounts.

More consumers are paying attention to their personal finances and the need to carefully manage various accounts to save money. Debt reduction, building savings and establishing long term financial security begins with making the best use of each and every dollar available. Checking accounts are not a new concept however the way in which you manage your checking account has certainly changed from just a few years ago.

Advances in technology not only make it easier to manage your account but also easier for mistakes to be made by both consumers and banking institutions. Avoid paying costly fees and penalties and protect your hard earned cash by implementing these tips to manage your account with ease.

Trisha Wagner is a freelance writer for DepositAccounts.com, where you can compare rates of checking accountsfrom dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.

The falling dollar and rising prices has left many people tightening their financial belts to the limit, in some cases even facing the need to borrow money to pay existing debts (certainly not a recommended practice).

More and more people are finding it difficult to pay their bills and are faced with credit scores that are declining due to delinquent payments.

The downward slope of a declining credit score is a slippery one and many people feel helpless when they find themselves in this situation.

Credit Repair Service

When faced with a stack of mounting bills and a diminishing pile of money, some people throw up their hands and hope the situation will magically get better. Unfortunately, that is not the case. Instead they find their credit score has gone down the drain.

By monitoring your credit report on a consistent basis, you will be able to detect any problems early on and take steps to correct the problems. There will be occasions where the blemishes on your credit report are due to your financial mistakes, although there are also instances where the credit report contains inaccurate information.

This is where a credit repair service, such as Ovation Credit Report Repair, step in to help people clean up their credit reports.

As you might imagine, there are plenty of “fly by night” operations that don’t have your best interests in mind. Be careful when selecting a credit repair service and look for a company that offers things such as a free consultation, no upfront costs, and no long term contracts.

Educate Yourself

The credit repair services are great for people that don’t want to take the time to educate themselves about their options. Given that you are here reading this, I’m going to assume that you are not in that category as you are obviously making an effort to educate yourself.

That is where Ovation Credit Report Repair sets themselves apart from many of the companies in this industry, as they provide a wealth of free knowledge in their Learning Center. You’ll find things such as: e-books, videos, and podcasts. They also have something called Credipedia, which is their Credit 101 encyclopedia of all things credit.

By taking time to educate yourself regarding the options available to you, the process to dispute inaccurate items on your credit report, and your finances in general, you can most likely avoid having to pay for the services of a credit report repair company. If you’re still unsure, or intimidated, of the process then it might be worthwhile to have a free consultation with a service such as Ovation.

In most cases, you will be able to handle your credit repair on your own if you are willing to commit to the work that will be required. Whether you ultimately decide on using a credit report repair service or not, just be sure that you are making an educated decision and not jumping in blindly.

Disclaimer
This post has been a paid review and contains my thoughts on the positive and negative aspects of the site or service in question. With the intent of providing information that is valuable to my readers, if you object to this post please let me know.

While it is no doubt more convenient for consumers to rely on credit cards than use cash for all of their purchases, it may not be the same for those people who are in professions that rely heavily on cash tips.

In the days of old, it was possible for many waiters, cab drivers, attendants, porters, bell boys, doorman, performers, and other such “tipped” workers to live off of the cash tips they earned on the job. Many were able to keep the cash tips unreported as income as there was no paper trails to prove otherwise. Additionally, it was a nice benefit to having instant access to cash before payday rolled around.

However, there are more and more people carrying credit cards than cash for safety or convenience reasons and it is affecting the incomes of those who accept tips. There is now a very obvious paper trail when credit card tips are involved, which employees must report to the IRS as part of their income. As many patrons are now prone to paying their bills and adding the gratuity onto their total bill, waiters and other workers no longer get to keep tips outright on a daily basis.

There seems to be one advantage of customers using credit cards to pay for meals and such. It seems that consumers who add a tip to their total bill typically will give a higher tip than those laying cash directly on the table. Perhaps it is psychological: Simply writing down a number to many is different from having to count out and leave actual dollars.

Not only are waiters and other customer oriented staff effected by a so-called “cashless” society, but others who count on cash donations are also seeing a slowdown. For instance, musicians or charity groups, such as the street corner Santa’s, have in the past been able to make a decent day’s take from appearing or performing on a public street. However, since less people are carrying around actual cash in their pockets, less money is being tossed into the hats and collection baskets of those soliciting donations.

While a future life without cash is unlikely, at least in the approaching few years, it may actually become a necessity for business people such as cab drivers and yard sale entrepreneurs to be able to accept credit cards or face lost income. Many charities and groups who thrive on donations have reported to see an increase in online transactions despite the fact they are seeing less actual cash donations. Consider places you visit regularly and note that if money is changing hands there is probably a credit card sign on the door.

Overall, technology is making it easier to become a cashless society and having at least one credit card on hand can help protect you from fraud when making purchases, unlike regular bank debit cards. If you plan to use a credit card the next time you visit a hotel or dine out at a restaurant, throw a few extra bucks into your wallet for the wait staff. They’ll appreciate your effort.

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Tisha Kulak is a writer for Creditorweb.com, where she writes about credit card offers, finances, credit cards, and responsible credit card use.

Online shopping has revolutionized the way we shop.

We sit in the comfort of our own homes and survey different brands of the same item, check and compare prices, read user reviews and decide what it is that suits our own needs best.

There are a lot of benefits when you shop online, including:

Better Access

Searching for products is easier online, you can more easily access items and while something may have run out of stock at a particular store, you can still see it online! You don’t have to wait for the store to open; you can shop on holidays too!

Another huge plus of shopping online, is not having to battle the hordes: crowds can be a real nuisance when you are out shopping, they slow you down and prevent you accessing the good deals. This is especially true when you are doing last minute holiday shopping and everyone else has the same idea!

Save Time, Save On Gas

You also save a lot of time when you shop from home, because you don’t have to waste time traveling to the store. As an added bonus, with the price of gasoline continuing to rise, you also save money on gas since you don’t have to drive to the store.

Save Money

The reason that shopping online can be cheaper is because it cuts out the overhead of running a store: rent, electricity and utility bills, paychecks for employees, maintenance costs etc. The seller can therefore afford to sell you an item at a cheaper rate. Also online coupons can save you a lot of money.

Sending Gifts Is A Snap

One great advantage of shopping online is being able to send gifts to people with minimum fuss, even if they live in a different city or even a different continent!

Say you want to send a gift to your dad for Father’s day (it’s coming up on June 15th so there isn’t much time left), but he lives in a different city. Hop online and search for something he might like, once you find the right gift you can have it delivered directly to his doorstep on the correct day, without ever leaving the comfort of your computer chair!

Pre-Owned Items

Another huge benefit of shopping online is the access it provides to pre-owned items, both as a buyer and a seller.

As a buyer, you can often save a considerable amount of money by finding pre-owned items for sale online. Just like buying a used car, you can often find items that are still in great condition that the current owner no longer wants because something better came along.

You also have an opportunity to turn around and sell your own items online. Just like you might be online looking to buy someone’s pre-owned items, there are people looking to buy your old items. This can be a great source of additional income, some people have even turned it into a profession.

Buyer Feedback

Consumer message boards and forums have made manufacturers more quality conscious and accountable. Being able to read user comments on any particular product comes in extremely handy when you are trying to make up your mind about what to buy. You have the benefit of other people’s experience, either good or bad with a product.

These are just some of the reasons why online shopping has become as popular as it has.

How has shopping online changed the way you shop?