Personal Finance

Don’t Like Your Bank? Now You Can Easily Switch Your Billpay

Posted by 7 August, 2008 (3) Comment

My wife and I bank primarily with Wells Fargo, and there have been quite a few instances when we have REALLY wanted to change banks. We started accounts with Wells Fargo because of convenience – there are quite a few branches in our area and we really enjoy the online bill pay service they provide. However, we dislike that we are sometimes charged for withdrawing our own money (“foreign” ATM fees).

There are a few things in this world that make me climb onto my soap box and this would be one of them. I find it borderline immoral that people should have to pay to withdraw their own hard-earned money, especially when it is a privilege for any bank to hold anyone’s money in the first place! And how, exactly, is charging useless fees tantamount to good customer service? Grrrr! *climbing down now*

So this begs the question, do you like your bank? Do you want to switch, but like us, dread the hassle? There are numerous banks are beginning to offer easy options for switching bill pay from one bank to another. One such service is Bank Switcher. I have not personally tried their service, but it is definitely worth a look. They have a 3 step process per their website. Bank Switcher analyzes the transaction history from your current checking account to identify all the automatic payments in step 1. Step 2 displays the transactions you can switch and allows you to choose which bills you would like to include in the switch. In Step 3, Bank Switcher states that in less than 10 minutes, you can print and save your Switching Checklist with the instructions and forms you’ll need to switch your bills. Again, I have not used the service. It’s free so that’s definitely a perk, but I suspect that they receive something from the bank you switch to.

My take is that it’s a service to look into, but if you are worried about inputting your current banking user name and password into a foreign website, then you have other options. I’m willing to bet that a lot of banks are more than happy to have customer service help you switch your bill pay. Recently I visited a local Capital One branch, and they offer a Switch Kit system which can be found on their website. Before making the switch I would look over the steps to switching banks and decide whether it is worth your time. These switching kits and systems appear seamless, but my guess would be that it’s not as easy as stated. I would review Bankrate’s steps to changing banks below, and then make a decision (From Bankrate.com):

Steps to switching banks:

Analyze your reasons for switching banks, then contact your current bank. It may be able to accommodate your requests so you won’t have to move on.
Open an account at your new bank before closing your old account(s). This enables you to write checks, use the ATM and make deposits and withdrawals during the transition.
Keep open your old direct deposit and auto bill-paying account(s) until those recurring transactions have been successfully redirected and appear on your new account statement.
Be sure to leave sufficient funds in your old account to cover automatic payments in case the changeover takes more than one billing cycle.
Don’t close your checking account until all outstanding checks have cleared.
Be prepared to provide account and bank routing numbers for your old and new accounts when canceling, establishing or redirecting direct deposits and auto payments.
Have your old bank verify in writing that all accounts, including debit and credit cards if applicable, have been closed at your request with no balance outstanding.
Keep all closing statements for your records.
Don’t forget to empty your safe-deposit box, turn in the key and collect your deposit, if any.

If you enjoyed this article, please check out the other articles on this week’s edition of Carnival of Personal Finance!

Categories : Frugality,Personal Finance Tags :

3 Ways to Know if Your Bank is in Trouble

Posted by 3 August, 2008 (1) Comment

This topic of conversation came up during a real estate investors’ meeting this past Saturday. We were trying to
figure out ways to determine whether or not our banks were
in trouble. Gerard Cassidy and his colleagues at RBC Capital report that AT LEAST 150 banks will fail over the next year (Marketwatch). While there most likely isn’t a whole lot to worry about IF you have under $100,000 in an account with your bank, it’s good to stay on top of your finances.
I just happened to see a link that J.D. at Get Rich Slowly
posted here to Bankrate.com. They rate all of the banks
around the country based on their CAEL rating. The CAEL rating measures capital adequacy, asset quality, profitability, and liquidity. The rating system is shown below and is based on a star system of 1-5 stars with 5 starts being the best, or safest in this case:
Safe & Sound CAEL rating system
Safe & Sound CAEL rating
Definition
Star rating
«««««
««««
«««
««
«

A second way to know if your bank is not doing so hot financially is to check on their Texas Ratio:

The Texas ratio is a measure of a bank‘s credit troubles. Developed by Gerard Cassidy and others at RBC Capital Markets, it is calculated by dividing the value of the lender’s non-performing loans by the sum of its tangible equity capital and loan loss reserves.

In analyzing Texas banks during the early 1980s recession, Cassidy noted that banks tended to fail when this ratio reached 1:1, or 100%. He noted a similar pattern among New England banks during the recession of the early 1990s.
(wikipedia.org)

Thirdly, visit Bauer Financial’s website. They are a third-party that ranks banks and credit unions:

“BauerFinancial, Inc. has been analyzing and reporting on the financial condition of the nation’s banking industry since 1983. With our help, countless depositors successfully navigated their way through the savings and loan crisis of the ’80s when others lost billions of dollars in uninsured deposits. Through the years BauerFinancial has earned the reputation of “the nation’s bank rating service”. Hundreds of newspapers depend on our ratings for their readers and federal and state regulators refer thousands of inquirers to us each year.”

Most of your larger banks are “secure” meaning that the government would not allow some of the larger institutions to “go under” because of the overwhelmingly disastrous national consequences. While this is comforting, and the FDIC insures up to $100,000 per account, it’s certainly nice to be aware of your bank’s status for the peace of mind it may bring you.

On another note, I just got this published on my first carnival, carnival of personal finance. Go Check it out here.

Categories : Personal Finance Tags :

Month 3 of The Your Money or Your Life Program

Posted by 16 July, 2008 (0) Comment

Hello! It’s me again. Yes, we are actually keeping up with stuff and I have the one person that reads my blog to thank. So, lucky person whoever you are, THANK YOU for keeping me straight. It would be very easy to go to bed right now, but that one person is keeping me up. The one glaring detail that you will notice is that we PAID a butt load in taxes. Fortunately we saved for this being that my wife was a contractor for part of 2007, but it is never fun paying that much to anyone except myself :).

Groceries $568.22
Eating Out $129.52
Gas $514.24
House $69.40
WP $222.35
CC $257.02
Houston House $394.29
Disability/Life Insurance $135.93
Home/Car Insurance $384.15
Mortgage $1,087.19
Student Loans $334.51
Utilities $566.07
Cable/Internet $79.88
Car $496.30
Entertainment $203.58
Clothes $182.09
Work $78.29
Dogs $114.52
Charity $20.00
Taxes $3,609.00
Pharmacy $65.99
Gifts $42.15
Total $9,554.69
Total without Taxes $5,945.69

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Categories : Financially Independent,Personal Finance,Your Money or Your Life Program Tags :

Goals for the Remainder of 2008

Posted by 13 July, 2008 (8) Comment

I’m trying to get better at making goals and then planning a path to reach those goals. You have to have a map to know where you are going, right? Here are my goals for the remainder of 2008:

1. Tell my wife I love her every day.

2. Fully fund our IRA’s.

+ With contributions and “other” income from my wife’s pay raise and our dividend income, we should actually meet this one early. $5,000 is the contribution limit this year so I’m excited to be fully investing in our IRA’s when we happen to have such a high contribution limit this year.

3. Read 1 book per month.

+ So far, I’ve read Your Money or Your Life, Getting a Life, The Bitch in the House, Rental Houses for the Successful Small Investor, Fix’em Up, Rent’em Out. At the moment, I’m reading Buy It, Fix It, Sell It, and The Magic of Thinking BIG. I’ve only read 5 books this year so I’m a little behind. Can you guess how many books I’ve read since I’ve graduated from college? A big fat zero. I’m pretty happy I’ve been able to be consistent with this.

4. Keep posting consistently on this blog through the end of the year.

5. Pay off the car and two smaller student loans by the end of the year.

+ This amount is around $12,000. The money will come from the sale of a house we have. We currently have a contract on the house. Once the sale of the secondary house goes through, we’ll be able to pay off these loans that will save us about $660 per year. $290 of the $660 currently goes towards a car payment. That $290 will go into a car fund once the car note is paid off. We will need another car in the near future and it is our goal to be able to pay cash for the vehicle.

6. Put $10,000 more into our Zecco account by the end of the year.

+ This goal is a bit of a stretch to be honest, but I wanted to add a goal or two that would be difficult to reach. This goal is dependent upon maxing out our contributions to our IRA’s (note we are already matching our employer’s in our 401k’s).

7. Complete a half marathon by the end of the year.

+ My wife and I just got back from a family funeral so I think I will dedicate this goal to two loved ones we have lost this year. I think it’ll be a nice gesture for the immediate family and it’ll give me the extra boost to fulfill this goal. (Note I just completed my first 5K without walking so I’m not starting from ground zero, but I do have a lot of work to do.)

8. Purchase an investment property.

+ We were hoping to pick up two investment properties by the end of the year, but I think it would be wise to concentrate on one until we get a little more comfortable.

9. Complete a real estate transaction through our direct marketing.

+ We’ve had some success in the past, but we were not able to pay “cash” so we were not able to complete the transaction. I’m concentrating on a smaller “farm area” in order to make it manageable and to not feel overwhelmed. At the moment, we are distributing door hangers and sending letters and postcards to people in probate (note: I’ll share examples of our direct marketing in the future as well as how to sift through probate records).

10. Market to 50 probate records per month.

+ I intend to send out 2 post cards and 2 letters within a month’s time to each estate. I will concentrate on a different set of 50 each month. I set the limit to 50 to make it manageable as stated in goal number 9.

11. Starting in July, distribute door hangers once per month.

+ I have yet to do this, so I really need to get on this to make sure I achieve this goal.

12. Have a party by the end of the year.

+ I’m trying to be more social and we’ve really been wanting to make use of our pool before we move.

13. This is not a SMART(specific, measurable, attainable, realistic and timely) goal, but I want to make sure I hang out with Jason, Matt, Charlie, Jesse and Howard.

+ I’m trying to surround myself with good, positive people. As my available time decreases, I want to make sure I maximize it by spending it with good people.

14. Join the Free Mason organization.

What do you think of my goals? What are your some of your goals?


Categories : Personal Development,Personal Finance Tags :

Month 2 of Your Money or Your Life Program

Posted by 22 June, 2008 (0) Comment

Post #2 of our adventure through the Your Money or Your Life Program. Technically, we are not involved in the online study group or a group around us, but we are getting started with what we are able to do right now. That being said, I’m happy that we are taking action because it would be easy for us to say we are too busy and not do anything until after we move.

Categories
Groceries $408.73
Gas $351.22
Gifts $536.60
Car Payment $290.00
Eating Out $152.12
Clothing $173.75
Pool $41.10
Student Loans $825.96
IRA $507.00
Cable/ Internet $102.91
Beauty $103.14
Auto $160.10
Dogs $375.93
Houston House $126.57
Utilities $219.30
House $130.52
Mortgage $1,087.18
Charities $25.00
Car/House Insurance $312.47
Life/ Disability Insurance $135.73
Entertainment $970.00
CPA $350.00
Starbucks $40.70
REI $79.49
Pharmacy $119.59
Cake Business $186.11
Total $7,811.22

If you look at our first month, we spent $6600. This month we spent a whopping $7800. While this may seem like a huge jump in money spent, it’s actually most likely very similar to last month. Last month I did not include IRA contributions. This past month I received extra money from business travel and my wife received a raise. Those extra dollars either went to savings (not represented here), or to pay off a student loan which would be reflected in our monthly expenditures. There was one major charge that was a yearly splurge – football season tickets for University of Texas at Austin. We hope to cut down on our expenditures, but it doesn’t seem like that’s been the case so far. Hopefully we’ll find a house and be able to move fairly soon because that would significantly and positively affect our budget. There are items that are not included on here that I am not sure how to quantify, i.e. we put quite a bit of money every month into an ING account and that money pays for things like the UT season tickets, property taxes, and vacations. I plan to only include them as an expense when they are actually paid. In the next post regarding the Your Money or Your Life Program, I hope to further refine our categories, decrease spending 🙂 , and place our months of following our finances onto a chart to chart our progress. Stay tuned!

Categories : Personal Finance,Your Money or Your Life Program Tags :