Monday, January 28, 2008

An Interesting Way to Save

For those of you who do not know, I am a mortgage loan officer. I get to see a number of ways people are able or unable to handle their finances in a way that most people are never able to see. I see tax returns, bank accounts, credit, you name it. I see it.

A few days ago I ran across a man that had a very interesting way of saving money. Everytime he deposited his paycheck he would buy a savings bond. One the first paycheck of the money he would purchase a $100 savings bond. One the second paycheck he purchased a $200 savings bond. And it just so happened that I reviewed his account where he received 3 paychecks during the month and he purchased a $500 savings bond at that time.

So every month he was guaranteed to save at least $300. When I questioned him on why he decided to utilize a savings plan that was fairly uncommon, his answer was amazing.

This individual had been incarcerated for 13 years. He had been back out on his own for just the last two years. He had been a thief. He had been arrested multiple times. He never knew how to use the money he had. He said that he was concerned that he would be unable to handle his money now that he was a free man. When he purchased the bonds he was taking the money out of his account just like it was any other expense. It was never in the account for him to use. He was "paying himself first" as many good frugals know.

Well, that was a good story of someone who was setting their life straight but then he gave me the kicker. He said that the bonds also gave him a boundary. It helped him to determine what was important and what was not. Whenever he was tempted to cash in one of the bonds, he knew that he would have to make a trip into the branch, talk to a manager or assistant, who would then have to enter all the information on the bond to determine it's value, and only then could he receive his money.

He actually made a physical barrier to his money! He couldn't spend the bond at a ATM or pay for dinner with it. It wasn't "money" until he made the trip to the branch to cash it in. He would have to make a special trip just to cash in the bonds.

Now, I don't advise anyone to save using bonds. There are many vehicles that will accrue interest in better ways, faster. But the idea here is clear. Open an account that if you are tempted to use it, there is some barrier in your way. Open a savings account with no ATM card. Open an online account where you have to make transfers and may experience a slight delay to get your money. This will allow you time to make sure that you are accessing the money for the right reasons and not spending on impulse.

Sunday, January 27, 2008

What To Do With Tax Rebate Checks

All of us are aware by now that the government is going to put some tax rebate plan in this year. We have heard the details and now are just waiting for the formal announcement to be made.

In my case the proposed tax rebate would equal $2,100. I am married ($1,200 for married couples) and have 3 children ($300 per dependant). Your tax rebate check may differ in amount based on your personal circumstance.

Checks will be received starting in May (from what I hear) and may take up to 10 weeks from when the IRS actually starts mailing the checks out. So expect May to July for delivery.

All of this assumes that the tax rebate plan goes through as expected.

Well of course the wife and I had some time to talk about what we are planning on doing with our tax rebate check. Now, you may be saying, "Deals....you have been writing about saving money, why don't you stash the cash in that E-Trade account that you set up?" The answer here is fairly simple. Our government is giving us these rebates WANTING us to spend it. That is the reason they are being sent out in the first place. Our economy is struggling and these rebates are meant to give some kind of boost in consumer spending.

Here is my problem. A good portion of what we are getting back, I have already spent. Before Thanksgiving Circuit City ran a special on HDTVs with no interest for 18 months. I sprang for a $1200 42' flat screen Vizio that I absolutely love. This was not a no interest, no payment for 18 months...just no interest, so we have been making payments on the television. By the time we get the rebate checks I foresee us owing $900-1000 on the TV still. Since I know that these rebate checks are coming...I'm not going to pay more than the minimum required at this time. So figure that we will have about $1100 remaining after we pay off the television.

This is what the wife and I plan to do.

1) $600 goes directly to the school shopping season. Clothes, shoes, supplies, sign up, registration, books, etc, ad nuseaum. Who said public school is free? Now $600 may be too much for what we need when that time comes...but at the same time, it just might not be enough but it is a very solid start.

2) We are going to split the remaining funds between us. So my wife and I will each have roughly $250 to spend. I really would like my wife to just absolutely blow this money on herself only. She is worth it. It is what the government wants her to do afterall.

3) As for me. I haven't the foggiest on what I would spend on myself. I have a very sneaking suspecision that I am going to buy a new bike for my oldest. Maybe a new chair for the desk (combining it with some gift cards that I have) and maybe a video game or something like that for me.

4) If there is anything remaining, it will go to one of the funds...the vacation fund, the emergency fund, or my brand new E-Trade savings that I opened. By the way, the money has come out of my account and I have received an email from E-Trade confirming that my account is open and ready to be looked at. I haven't had a chance to log in yet. I will give you more feedback once I do.

Saturday, January 26, 2008

Deal of the Weekend

Not only are we trying to build a normal savings pattern here at Deals That Matter, we also want to try to help you find the best ways to save more money when you have to spend.

Like many of you out there, I have kids. And the fact of the matter is, kids need clothes. And kids need clothes all the time. They outgrow what you just bought before you know it.

One of my favorite places to shop is Kohls. Why? Well, if it is not on sale this week just wait until next week! They seem to rotate what half of the store is on sale.

Here is the deal of the week from Kohls.

Huge clearance sale on kids clothing. Sorry, I just found this deal today and it ends today too, so you have to move fast.

This sale features up to 70% clearance. You can also get jeans boy and girls 2 for $20. Kohls normally shipping is $.99 but they are offering free shipping for orders over $75.

Happy shopping!

Thursday, January 24, 2008

Wants, Needs, Emergencies, & Your Money

I ran across this post from I've Paid For This Twice Already (love the name).

It is about this frugal blogger's draining of her emergency fund and needing more to be able to have her wisdom teeth removed. And she is going to tell the dentist that she isn't going to do it until she has the funds to pay for the procedure!

You go!

But she is embarrassed about having to do this. Aren't we all? When we have to fess up and actually tell the reason we aren't going to do something is...."I don't have the money." It is uncomfortable at best and can lead you do the road to more debt at worst.

But we all have things come up that have to take priority in our financial lives, car repairs, children's field trips, dental work, whatever, that changes the whole plan. But just because your current plan has been blown to pieces, doesn't mean that you pack it in and give up.

Sometimes, even the needs have to wait. Twice Already Needs to have her wisdom teeth removed. But even this need can wait, at least for the moment. So if you can put off your needs in some cases. Just think what you can do for the wants!

Wednesday, January 23, 2008

Opened My E-Trade Savings Account & Review

I opened my online E-Trade account this evening and made sure that my initial $25 deposit was heading in the new accounts direction. I had been planning on waiting until I got paid on Friday but I thought it was ok to open the account and make the deposit just a few days early.

The first thing I noticed is that the rate the savings account pays has dropped from 5.05% APY to 4.40% APY. Darn Ben Bernanke and the Fed!

My experience was ok. It was not quite as user friendly as I would have liked. When I clicked on, "Open an Account" it took me to an area to enter my personal information and set to get my user name and password completed.

Then, onto a page that led basically to nowhere. It took me a couple of false starts to actually get to where I was to determine what kind of account I wanted to open with E-Trade. I had to enter all the same personal information (pretty frustrating) and additional information such as social security and other tax relevant information.

Then I could finally enter my external account and get the account officially opened. Once on the confirmation page E-Trade gave me a timeline including that I should be getting some kind of "kit" in the mail in the next 5-7 business days.

I'll keep you updated and see how the experience is once everything is up and running.

My initial reponse, on a 5 star scale, would be about 2.25 stars. Not overly impressive and I lost some of my excitement because I became frustrated with the site.

Hopefully, the future looks brighter than today!

Tuesday, January 22, 2008

The Start of My Savings Plan

Why was the first real post regarding online savings banks? I touched on this before but it is important. If we are going to save money, we have to make the most of it.

So I have identified who I want to use for my online savings account we need to be able to fund that account right?

Well, next is to figure out how I am going to fund this account and how much is going to it. I have decided for the time being, since the stock market is not fairing very well and I do not anticipate to improve in the next 6 to 12 months, I think investing in a high yield savings account is the way to go.

Here are 3 ways that I plan on funding this account in the short term.

1) I have roughly $50 per pay check placed in my savings account directly. I want to keep enough in this account to be able to have access to a small amount of emergency funds if I need it. So I have started a nice little base of about $250 in that account now. My wife and I have a separate account that we call, "The wedding account" even though we have been married for 5 years for our larger true emergency account. Nothing comes out of "The wedding account" unless we both agree. Therefore, having a smaller emergency fund for my own purposes is needed.

Now that I have a small base built up, I can start to use a portion of that automatic savings and redirect it to E-Trade. I plan on moving $25 per pay check. I am going to set this up automatically so I don't even have to think about it.

2) I have ghostwritten for a website for a couple of mortgage originators (loan officers) in Arizona. I have been on break from that since the end of November but have been in contact with my contact and he promises me that starting in Feburary that he will again start accepting posts from me. He pays me $15 per post. I normally give him somewhere around 2 per week and receive my payment every two weeks.

He has discussed a much bigger project that could lead to more income, though he has been very vague with details so we will have to wait and see.

I use the first installment and put it towards car insurance. The second installment will now be up for grabs. I have yet to decide if all of this will be put toward the E-Trade account or if I am going to put it into the 2010 cruise fund that the wife and I have. I can split it between both, and that seems more likely.

I do not want to count on this income as it could stop nearly at any time, though being in the mortgage industry, I'm sure I could replace most if not all the income from this gig with a little research. But being that it could end, I do not want to set up an autodraft for these funds.

3) I hope that this and my other blog www.financialbullet.com will continue to generate a little money. I'm not aiming for the stars but just a nice little amount each month. If it cracks $30 per month each, I think it would be a good start. These funds would either be A) used to produce more traffic for each site using stumbleupon or adwords. Or, B) Be placed into the E-Trade account.

Again, that this income is not reliable, I would not set up an autodraft on my accounts.

So between these three streams, hopefully, I can deposit $100 per month in this account. While modest, if my ghostwritting and blogs increase, my deposits could increase significantly.

So, were off! Let's start saving together!

Monday, January 21, 2008

Virtual Banking and Savings Rates

Ok, so if we are going to make it a goal here at Deals That Matter to save money, we have to make the most of the money we save. That means we must find good rates for the money we save. The best way of doing that at this time, that I know of is using a virtual, or online bank.

I have compared three of the larger online banks that tout higher interest rates.




HSBC, which offers a rate currently of 4.25% with no minimum balances, total online access, unlimited bank accounts that can be linked and only a $1 deposit to start with is a good place to start.

Please read this review of opening a HSBC Direct account here. This process seems a little to involved and time consuming for me. But I guess that it is in the name of security. I just think that it is odd for an account opening to take almost two weeks for the author to be able to view/access his accounts.

Too much hassle for a good rate, just not the best right now.







ING is probably the original online bank. I had an account way back in 2001 with them and had nothing but good things to say. I guess that I also currently have an account with them that the company recently acquired Sharebuilder.

Right now the rate is 4.10%. Also no minimum is required to start an account.

Customer service is all about security. I don't know about the rumors that were spread about the company closing accounts for customers that caused too much work for them.

But right now, the winner of the online banking savings rate is........






E-Trade is offering a whopping 5.05% savings rate with no minimums. Their rate has stayed constant while the others rates have dropped as the Fed has cut interest rates. The company is trying to win back some business.

You're seeing a lot of television commercials touting 1,000 new accounts opened per day. Why such a big push? Well, the companies stock tanked after they too announced they were neck deep in all that sub-prime mortgage write off stuff that has been sweeping many of the big banks.

So E-Trade needs the business to help restore their investor confidence. The savings rate they currently offer is just on off shoot of that need.

There are many other banks out there that would love to compete for your savings. You may even know of a few that can offer even better deals that what I have posted here. Let us know. Again, we want to make this a community.


Full Disclosure: Deals That Matter is not affiliated with any of the companies listed in this article.

Sunday, January 20, 2008

Welcome to Deals That Matter

Welcome to my new blog that will have many simple desires.

1) I want to be able to help you save money.

2) I want to be able to make the money you save make more money.

And finally

3) I want to help you find the best websites out there that will help you spend less money when you finally want to use some of that money you have saved.

How am I going to help you do that? Well, you're just going to have to make a return trip back here aren't you?

So I guess the best way to describe this blog is a personal finance site. But I want it to be more than that. I want this to be a community. Feel free to share your ideas.

I will give my post my first suggestion tomorrow. I look forward to a bright future and awesome opportunities to offer!