September 2009 Archives

We all make mistakes. But money mistakes come with a price.

Recently Wells Fargo made a change to its overdraft charge policy that makes those mistakes a little easier to swallow!

In the near future (the final date’s still TBD), your account will not be assessed overdraft fees if you become overdrawn by $5 or less. Also, no more than four overdraft charges will be charged per day.

Also, in the coming months, customers who want to opt out of overdraft coverage will have that option — you’ll be able to specify that you don't want your transactions authorized or paid into overdraft if you don't have funds to cover the transaction.

That's all good news, but more importantly, how can you avoid overdrawing your bank account in the first place? Just a few simple ideas:

• Bank online. Get yourself set up for online banking, so you can view your account any time. You can see pending transactions and easily transfer balances from one account to another, which can help you avoid overdrafts.
• Sign up for overdraft protection. At Wells Fargo, enrollment in overdraft protection is free, and can dramatically reduce the fees you're charged for overdrawing your account.
• Sign up for mobile banking. Right now Wells Fargo is offering this service for free. It allows you to keep track of your account, like check balances, review recent activity, and transfer funds — all from your mobile phone.
• Go low-tech. Although many online tools are helpful, you don't have to be high-tech to keep good track of your bank account. Use a good old-fashioned check register to record all your account activity: check card purchases, deposits, ATM withdrawals, etc. You can also use this as a backup, even if you're banking online.

So tell us: How do you keep track of your bank account?

UPDATE: Oops, we jumped the gun on our original post! We recently learned these changes to our overdraft policies are a work in progress, which means they’re not yet available. We’ve updated our post to reflect that! We apologize for any confusion this may have caused and will let you know when those services are up and running.

After a three-year relationship with my gym, it's time for a switch. My new gym is in a closer location, has great classes and is significantly lower in cost. It's in my basement, consists of my favorite exercise DVDs and only costs the electricity to run a television and overhead lights during an hour workout.

The gym is an expense I have previously justified several ways — because of my health, because it was a location just for working out, and because I liked pampering myself in the steam room post-workout.

But as I look to tighten my belt a little to increase savings, I can't justify the expense any longer.

Perhaps this has been one of my splurge items over the past few years. But a girl can only have so many splurge items before she's living above her means, right? Paying a premium for membership at one of the top gyms in town means paying for all the added services — even ones I wasn't using, like fitness classes. Since I wasn't getting my money's worth at the gym, it was splurge I could cut.

However, I'm having a hard time letting go. I keep trying to tell myself that, given the right motivation, I'll still maintain a fitness routine. Here's why (I hope) life sans gym is going to be just as good for my fitness and much better for my pocketbook:

• My house is mere blocks from a local park and bike trail, so when the basement gym gets boring I can mix it up.
• I love rearranging my furniture. Lift with the knees and you have both a workout and a decorating opportunity!
• The outdoors rock — I can do tons of exercises while enjoying the fresh air. Just think of the sweat I'll work up shoveling my driveway this winter.
• With YouTube at my disposal, they'll be ways to vary my workout routines without spending money on new videos and equipment.

Have any of you ended a relationship with a costly routine? Did you have a tough time cutting yourself off? Any ideas for coping are greatly appreciated!

Staci is always saying she needs 15% more or less of something. Like when she can't find the movie she wants through the Redbox, she needs 15% more of that movie in the Redbox. Or when Pie Elizabeth is being particularly barky, she needs 15% less barking.

Once I asked her why she uses 15, to which she responded "Fifteen is my favorite percent."

Right now, nine is my favorite percent. It's the percent of my goal I have saved on two savings accounts. I guess technically my favorite percent in this respect would be 100, but for now, I'm happy to see nines.

If you're saving through Wells Fargo, you can set up My Savings Plan® to monitor your progress, too. I've established a couple savings accounts with specific savings goals — one for new windows on my house and the other for my ongoing saga of saving for a new car.

I teeter-totter back and forth as to whether seeing my savings percentage — or accounts for that matter — helps or hurts me. Seeing my progress from time to time can help me stay motivated to maintain my current contributions and kick in an extra couple bucks when I am able.

However, seeing that the money is out there just waiting for me can test my patience. Sometimes I start thinking about what debts I could be paying off with the money or how easy it'd be to transfer a couple dollars out of the account for something smaller I need/want (mostly want).

Here's the compromise I made that seems to be working so far. Some of my accounts are visible through online banking and some are not. My emergency fund, which I want to keep growing and never take from unless it's truly an emergency, is one of the accounts that's invisible. The account is funded through direct deposit of my paycheck, so everything is automatic and I don't see the money.

Other accounts, like the window and car goals, are visible. For these accounts, I've found that knowing the specific amount of the specific goal is helpful to keep those savings goals trucking. In addition to automatic transfers, I tend to add more money when I can. Right now I'm thinking about depositing a few more dollars to get the window goal up to 10%. Double digits!

Does having a reminder of how far along you are help your savings goals? Tell us about what savings tricks you have.

As a high school senior, you've got a busy year ahead of you. While you might be mentally ready to set things on "coast," now is not the time for that! Besides keeping up your grades, you've got a bunch of prep work to do to get ready for college. It's all pretty deadline oriented, so if you haven't created a master calendar yet, it's a good idea to start one.

Here is a basic timeline of things you'll need to remember to stay on top of college planning:

September

• Meet with your guidance counselor to discuss your choice of colleges.
• Start a scholarship search.  Look online and tap your guidance counselor to get help with local scholarship options. Note all scholarship application deadlines on your master calendar.

October

• Decide which schools to which you'll apply. Make a note of all the application deadlines and put them on your master calendar.
• Secure recommendations from teachers, employers, or other adults. Give them at least a month to write their letter.
• Start thinking of topics and drafting outlines for college application essays. 

November

• Submit your college application information on time.
• Schedule campus visits and interviews.

December

• Keep an eye on scholarship deadlines and continue your scholarship search.

January

• File your FAFSA (Free Application for Federal Student Aid) as soon after January 1 as possible. File online at fafsa.ed.gov. 
• Attend a financial aid night to learn more about paying for college.

February

• Provide your counselor with the necessary mid-year grade forms, if your schools require them.
• Register for advanced placement tests.
• Complete scholarship applications.

March

• Watch for your Student Aid Report (it should arrive about four weeks after submitting your FAFSA).
• Check your mailbox! You should begin receiving your admissions decisions from colleges.

April

• Compare financial aid awards  from different schools and keep these in mind as you weigh your options.
• Look for additional funding if your financial aid package is not enough to cover your costs.
• Think about private student loans.
• Use Wells Fargo's online tools and calculators help plan.
• Make the final decision and notify your schools.

May

• Enjoy the last few weeks of high school, but remember to keep your grades up!
• Make sure your final transcripts are sent to the college you'll attend.

Summer

• Save money from your summer job and gradually buy things for school.
• Know your freshmen orientation dates.

Any other ideas to add to the senior year calendar?

When it comes to your non-school expenses, who is paying them — you or your parents?

As you head off to college this fall, it might be a good idea to talk it over with your parents and make sure you're on the same page about which bills you'll pay and which bills they'll pay.

If you're just starting to take on some responsibility for your finances, it will be an eye-opener to learn just what it costs to keep you afloat. You may not have any idea about all the costs included in owning a car or renting an apartment. Your parents will definitely appreciate your asking about it!

Here are some of the biggies to think about:

• Cell phone : Are you still on your parents' plan or will you be getting your own plan? If you're on a "family plan" with your parents and siblings, take some time to look over the bill and maybe talk with a representative to make sure you've got the most cost-effective features. And think about the future: Will you be using more minutes/texting once you're away at school? Don't wait for a big bill to get things organized.
• Rent/utilities: Rent might be something you can pay on your own. But if your parents are shouldering your share, maybe you can afford to take on some of your utilities. Once you split these among your roommates, they usually aren't too bad. Plus it will be good training for the future — you might start thinking of ways to save energy  if you're facing the bill each month.
• Car expenses: Even if your car is paid for, there are still plenty of expenses that go along with it outside of gas — insurance for one. If your parents are paying your car insurance, you can help them out by getting good grades. Insurance companies sometimes give a "good student" discount , so have your parents look into it. Don't forget about oil changes, registration fees and general repairs. Even if you can't afford to help pay for all these things, you should know what they cost — someday all these expenses will be yours.
• Personal items/expenses (food, clothing, haircuts): Again, if you're just starting to pick up some of your own expenses, this might be a good place to start. Most of your personal expenses are things you can control, so it will help you learn to discipline your spending — you'll be more inclined to shop for bargains  or eat within your meal plan when the cost is coming out of your own pocket.

When it comes to your college expenses, what things are you paying for?

Tomorrow will mark three years since we launched the Student LoanDown blog. It's kind of crazy for me to think about! For three years, I've been sharing my own financial saga and helping readers understand theirs.

To celebrate, I decided to give you a little behind-the-scenes peek at what happens on our end to bring you the information you find here on a day-to-day basis. Remember, none of us are full-time bloggers — we get to talk with you along with other daily responsibilities. So the time lapses are when I'm doing other tasks that are slightly less fun!

8:45a.m. After procuring a morning beverage, I log on to my computer and start to sort through emails and comments that have come in overnight. One of the highlights of my day is seeing your responses to what we've posted and the questions you have.

9:30a.m. Once I've got a handle on what I need to respond to, I identify the resources I need to answer your questions. Sometimes the questions you ask are pretty complex. So, I get to engage other team members throughout the business. Like when you wonder about deferments and forbearances (technical terms for ways to postpone your student loan payments), I get to talk with folks in our Account Maintenance department. Answering your questions has helped me understand tons of different areas of the business I wasn't familiar with at first.

12:00p.m. I have an idea for a series of posts, but first want to talk with our blog editor, Henrik, to get his feedback. After chatting about how to present the information best, I get started on the first post.

1:25p.m. As I'm drafting responses to the comments and questions I got in the morning, a new email comes in through our Ask the Expert feature. The customer has some specific questions about her student loan with Wells Fargo, so I engage our Executive Office. That's the group that handles escalated customer inquiries. And they can pull the details of the borrower's account for me.

3:15p.m. Ring, ring. Caroline is calling! She wants to have a quick brainstorm session for some post ideas. Along with drawing experiences from our daily lives, we also like to have timely conversations about what's going in the lives of students. Sometimes it helps to bounce ideas off another blogger.

4:45p.m. I realize my post ideas are going to take a bit more research, so I crank out a quick post about it being our anniversary, which you're currently reading! After I send the post to Staci, I wait to hear her chuckle over the cube wall as I am v. clever and v. funny (and v. modest).

6:00p.m. With another day of comments published and questions answered, I note what items are still outstanding for the next day and put them on my to-do list so I remember to follow up.

So there you are: A look into the glamorous life that is blogging for the Student LoanDown! Thanks for teaching me new things every day with your great conversations and questions. I've really had a lot of fun talking with you over the past few years, and we hope you're having fun, too!

Have you heard? The recession could be drawing to a close! 

I'm cautiously optimistic that our economy is rebounding. So are my brother and sister-in-law, who just purchased a new car through the "Cash for Clunkers" program.  Although I'm not planning on making any major purchases anytime soon, my financial situation has changed for the better. I sold my old house in June, so my months of double mortgage payments are over. (Huge sigh of relief.)

But during those months, even as I was pulling funds out of savings to cover two mortgages and trying to find ways to cut back on entertainment costs, there were a few "splurge items" I couldn't live without:

• Care for my Corgi
  Pets are expensive, and my eight-year-old Pembroke Welsh Corgi , Pie Elizabeth, is no exception. She has allergies and requires special food and treats, plus medication and vet visits to keep her from gnawing on her paws. I've read many news articles about families having to abandon their pets because they can't afford them, which makes me beyond sad (yes, I also cry during those Sarah McLachlan ASPCA commercials ). So even though I'm watching my pennies, I budget for both my own pet's needs and donations to the local animal shelter.


• Coffee
  I became addicted to Peet's Coffee  when I lived in California. After I left nine years ago, I set up recurring orders through their Peetniks  program. Every 34 days, two pounds of whole bean Arabian Mocha Java arrive on my doorstep via UPS. It might be slightly more expensive than buying coffee at the grocery store, but in the long run, it probably saves me money because I'm not splurging on lattes and mochas as often.


• Online music downloads
  iTunes  has raised its prices, but $1.29 + tax for a little piece of music happiness is still a bargain in any economy. I try to restrict my purchases to a song a week or an occasional new release album from one of my favorite artists.  Fortunately, my friends and family are aware of my love of music and often give me iTunes giftcards for birthdays and holidays — making them free to me!

These might be small indulgences, but they sure make my life a little better (and me a little happier) during tough economic times. Anyone else have a splurge story to share?