Before things were cleared, I was very nervous as I also had a few other transfers scheduled around that time. Had the withdrawal gone through, I would have paid a lot of fees due to insufficient fund in my account. I also feel quite lucky that I checked my account that morning and did what had to be done. Fortunately, nothing really happened at the end because the stop order I placed on the withdrawal at BofA eventually worked and it stopped the transfer.

When the whole incident was over, I realized that I need a better way to notify myself for situations like this when the account balance drops to dangerous level. Because I never had any such incident before, I didn’t have such alert in place. Instead, I had relied entirely on my manual check of the account for years and that’s not really very reliable. What I did back in July was to set up several automatic alerts in my account that will send me an email when certain events happen, such as

• Available balance
• Account has insufficient funds
• Low balance threshold

The first alert emails me the account balance every morning so I know how much I have in the account without even logging in. The last two occur only when the account doesn’t have enough money. The second alert goes off when the balance is below zero. However, I don’t want to be informed only when there’s no money in the account. If that indeed happens, it is probably already too late. So I created the third alert with a balance threshold at $1,500, a level that requires me to replenish the account immediately.

While that was the first time that I set up bank alerts, I have been using credit card alerts for a long time. Alerts that help me manage my credit card bills include:

• Statement available
• Transaction exceeds a threshold
• Account balance exceeds a threshold
• Payment scheduled
• Payment reminder
• Payment not received
• Payment posted

Because I no longer receive any paper statement from credit card issuers, I rely on email alert to let me know when the monthly statement is available online for me to review. The second and third alerts are for situations when either a large purchase is posted in the account or the total account balance exceeds a threshold. Once receiving these alerts, I usually check the account right away to see if there’s anything unusual. The last four alerts are all related to credit card payment. To make managing my credit accounts easier, I have arranged to have all payment deadlines at about the same time, in the first week of the money, so I can schedule payments on the same day for all cards. Some card issuers, such as Chase, alerts me when a payment is scheduled, others like AmEX remind me when no payment is received xyz days before the due date. In addition to using these alerts, I also check my bank account to make sure that payments are indeed taken from the account when they are supposed to.

With these alerts, I have never missed a single credit card payment and never paid a late fee.

photo credit: apple 94

Original Post on The Sun's Financial Diary

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Recently, I’ve noticed many stores pointing consumers toward the use of online coupons. At first I thought the stores had lost their minds, I mean — showing me how to save money on your products? I know you are reimbursed by the manufacturer and all, but still … it seemed too good to be true.

The more I started to examine this trend the more I realized that it was, in fact, too good to be true because many online coupons aren’t worth more than the paper they are printed on.

How much does it cost to print that coupon?

The coupon sites that I tried used an entire piece of paper to print each little coupon. With printer ink costing up to .10 per printed page and paper coming in around a penny per page, you’ve already spent a good chunk of some of those coupons by the time you are done printing them. If you simply must have the coupon, make sure you set your printer for the lowest quality print and don’t be afraid to print the coupons on the back of junk mail, scrap paper — anything you don’t mind ending up in the cashier’s till.

How much does it cost to go to that store?

Before you print that coupon, ask yourself if the item you printed the coupon for sold at your local grocery store. If it isn’t, you will have to make a special trip to another store in order to buy it. If you have to make an out-of-your-way trip then you need to consider the cost of gas as an expense that detracts from the saving’s offered by the coupon. It might only add an extra couple of pennies but when you add that to the cost of printing the coupon, you are well on your way to saving nothing.

Hello, would you like a virus, spy or pop-up with your coupon?

Many of the coupon websites out there require that you install their proprietary, super-special, secret coupon making programs into your computer. With every mysterious program you install from the wide open plains of the internet, you risk getting a virus. And even if it is downloaded from a company or website you trust you may still be installing their spy program that facilitates customer-targeted pop-up ads on your machine. Not only is this extremely intrusive and annoying but, if you don’t know how to get rid of that junk on your own computer, it could cost you quite a bit of money to hire your neighborhood geek to take it off for you.

Will you use the items you buy?

You know those people who have pantries filled with things that they will never use but that they bought because they were on sale? Well, you could be one of those people — spending money you don’t need to spend on stuff you don’t even want — if you buy things simply because you have a good coupon for them. Only print coupons for those items you want to buy and know you will use within the next month.

Does the coupon make it cheaper than the store brand?

A dollar off coupon on a box of name brand cereal will not make it as affordable as the store brand. If you really want to be frugal, store brand items are almost always a better choice than a name brand item with a coupon. Many of these coupons are used to lure you into making a bad decision for your budget. Remember, if the coupon doesn’t reduce your overall average spending, then it’s not saving you anything — it’s costing you.

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I first knew Revolution Money more than two years ago when it launched a credit card, the RevolutionCard, which it claims can better protect cardholder’s identity by not printing name and account number on the card. I don’t know whether that claim has been proven or not, but I wasn’t very impressed by the card so I never thought about getting one. Then in early 2008, Revolution Money introduced another product, called Revolution Money Exchange, to compete with Paypal in the payment service business. This time, I jumped in and got an account for myself. Unlike the RevolutionCard which I don’t see any direct benefit to myself for using it, the Revolution Money Exchange has a very attractive feature: It doesn’t cost anything to send money between account holders. I don’t make a lot of money transfers online, except between my own bank accounts, but I don’t like that when somebody pays me $15 via Paypal, I only get, say, $14. What Revolution Money Exchange provides is exactly what I am looking for: No fee money transfer, though it doesn’t have the massive customer basis (Revolution Money has 400,000 consumers) as Paypal does.

Now that American Express is acquiring Revolution Money, I am wondering whether AmEx will keep Money Exchange free of fees for individual consumers.

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Those were the exact words I thought when my husband came home and shared with me what he saw his coworker doing. Each week she digs deep into her purse and purges it of all the loose change both in her wallet as well as the coins floating around in the bottom. And when I say “purge” I really mean “throw away.” Yes, you read that correctly: in the trash can, the garbage, with the refuse. My husband must have been anticipating my reaction because just as my jaw hit the floor, he pulled a small sandwich baggie from his pocket chuck full of coins.

I’ll admit it. I get tired of having my purse weighted down by lots of change, but money is money. Want to make the best use of your change? Here are some ideas to help you make every penny count:

Count it out, roll it up and trade it in

Skip paying for the rolls and visit a local bank instead. Most will give you complimentary paper rolls for just this purpose. If you have young children, this can be a great family activity. Picking up the coins helps improve fine motor skills. Counting out and grouping the coins helps reinforce mathematics skills. It’s also a great way to enable children to actively help the family’s bottom line in a very real way. (Not keen on all the counting? Employ the use of a Coinstar machine to do all the counting for you. Be warned, though, you will employ it by paying it a fee to the tune of 8.9%.)

Convert to bills without the counting

Think rolling coins or paying a fee is your only option? Think again. Some banks (especially credit unions) have machines that do all the counting for their tellers-and you-for free. Call your bank to find out if they’re one of them or check out TheUnderStory.com to find one near you that does.

Always keep 4 pennies in your wallet. Doing this can help you minimize the number of pennies you get back in return, leaving you with much more silver change which is easier to spend.

Give the ultimate gift to a coin collector

An old jar of coins can literally be the equivalent of a treasure chest to a coin collector, especially the junior variety. Give the gift that literally only costs you the change in your pocket and you’ll be giving the gift of a great treasure hunt.

Consider it forced savings or an emergency fund

I actually have a small tabletop, battery operated machine that automatically rolls the coins for me. Truth is, even after I accumulate a massive amount of rolls, I still don’t necessarily trade them in for bills. Instead, I keep them tucked away as a “ready-to-go” emergency fund. During times when things are especially tight, I quickly trade in a few rolls of coins for cash immediately in order to buy a few groceries. This enables me to stretch the food I’ve already got in my pantry, leaving my usual budgeted grocery amount to go towards paying for other, unexpected expenses. Another great way to look at loose change is to treat it as a sort of forced savings, similar to how others few tax withholding throughout the year. Forbid yourself to spend any change and instead collect it all. Watch how quickly a bit of change here and there can add up to help stash away a college savings or vacation fund without even trying.

photo credit: Nicholas Bonanno

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PerkStreet Financial is offering a PerkStreet Online Checking Account that allows account owners to earn cash back with their Visa debit card. Every time you use the debit card in non-PIN transactions, you can earn 1% cash back. Right now PerkStreet Financial is promoting the new checking account by giving each new customer who opens an account with $25 deposit a $50 bonus.

Online Checking Account

In order to receive the $50 bonus, you will have to make a deposit of at least $25 when opening the account. However, the checking account itself doesn’t have a minimum balance requirement. In addition, the free checking account also offers a free book of checks and free online banking and bill pay. The account does charge a monthly account maintenance fee of $4.50 if you don’t use your debit card even once in the month. If you use debit card more often than cash or credit card, this shouldn’t be a big problem. The monthly inactivity fee can be avoided if you do any of the following: making a transaction with your debit card, writing a check that clears the account, using online bill pay, initiating a withdrawal or making a deposit to the account.

You can also use the debit card to withdraw cash within STARsf network without paying a fee. If you use out-of-network ATMs, there will be a $2 fee for each cash withdrawal.

The Perks

With the PerkStreet debit card, you can earn 1% cash back for every dollar spent in non-PIN transactions. The cash back you earned can be redeemed for gift cards, free music or coffee. How’s how the cash back program works:

1% Cash Back

• Every $100 in non-PIN purchases earns you a dollar in perks.
• Every dollar perk you redeem gets you $1 on a PerkStreet Financial Visa Gift Card or a gift card from Target, Best Buy, Amazon.com, GAP or Ticketmaster.

Music

• Every $100 in non-PIN purchases earns you a song.
• Every song you redeem gets you $1 in credit at iTunes, Rhapsody or Amazon.com Gift Cards for MP3s or millions of other items at Amazon.com.

Coffee

• Every $200 in non-PIN purchase earns you a cup of coffee.
• Every cup you redeem gets you $2 in credit on a reloadable gift card from Starbucks, Dunkin Donuts, Peet’s Coffee and Tea and Bruegger’s Bagels.

About PerkStreet Financial

The PerkStreet Financial Debit Card is issued by The Bancorp Bank. According to the FDIC, The Bankcorp Bank is established on July 28, 2000 and has been a member of FDIC since July 28, 2000 (FDIC Cert: 35444). The bank is headquartered in Wilmington, Delaware and operates only one branch.

The bonus offer expires on December 31, 2009. To receive the bonus, in addition to the $25 deposit, you will also keep the account active for three straight months. The bonus will be deposited into your account within 15 business days of the end of the third month.

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But this year’s isn’t the only tax bill you should be thinking about. The planning and choices you make now could have a significant impact on how much you can be sheltering from Uncle Sam next year. Some decisions should be part of a normal yearly financial assessment and some you will need to address in the next month or so before you miss the boat altogether.

Here are five questions that you should be focusing on right now for 2010.

1. How much should I be contributing to my flexible spending accounts?

Health care and dependent care flexible spending accounts are some of the best deals the government has going.

These plans allow you to set aside money to pay for qualifying expenses free from federal taxes. For someone who places the IRS limit of $5,000 per year into a dependent care flexible spending account, that could mean hundreds of dollars in tax savings. But be careful how much you commit. Any unused money left in the account at the end of year is forfeited.

Individuals are generally only able to sign up for the flexible spending account as part of their employer’s open enrollment period so if you don’t sign up for it now you’ll have to wait until next year.

2. Should I choose the regular or high deductible health plan at work?

This one requires you to do some forecasting of what your medical expenses will be. Unfortunately, that will always be more art than science.

People are enticed by the high deductible plan due to the lower monthly premium they’ll have to pay out of pocket. The drawback is that you’re on the hook for a higher deductible before insurance starts covering your expenses. One medical procedure or trip to the hospital and you could find yourself with some significant bills.

If you’re young, healthy, and don’t expect a need for health services in the next year, the high deductible plan may be a good way to keep a few extra dollars in your pocket.

This is another choice you’ll need to make before your employer’s open enrollment period ends.

3. How much can I contribute to my 401(k)?

In terms of retirement planning, the answer to the above question should always be “as much as possible”. The same answer also applies when it comes to tax planning.

Traditional 401(k)s have the added benefit of reducing your taxable income. The IRS sets an annual 401(k) contribution limit of $16,500 (and higher for those over 50) so someone in the 25% bracket could save over $4,000 on their taxes by maxing out their 401(k).

If the prospect of maxing out your 401(k) seems too much, try the incremental approach of raising your contribution by 1% every three months until you get there.

4. Do I have any losers among my investments?

In light of the recent recession, odds are you have some. When selling them, the losses can be used to offset any capital gains you’ve incurred during the year or some of your taxable income.

The sale needs to be made in the year you want to take the loss for tax purposes. Preparing a plan ahead of time can help put some of those losses right back in your pocket.

5. How much do I plan on donating to charities?

Making a donation to charity may be the easiest way to lower your tax burden.

If you itemize, the money you give will offset any taxable income you have. Donations could be in the form of cash, cars, stock or any of a number of other things that a charitable organization will accept.

Give a gift to charity and keep a gift for yourself in the form of a tax write-off. What better deal is there than that?

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After long delays, I finally opened the account in July. The process is a little bit longer than other bank accounts, but not tricky. There are five steps in the opening process.

At first, you will need to select the type of account you want to open. EverBank offers a quite few banking and investing accounts for you to choose from, including Money Market account, Checking account, CD account, World Currency account and investing accounts. If the Money Market Account is what you want to have, select it from the list accounts available.

Once you selected the account, you will need to provide personal information in the next step. All the information are pretty standard, such as your name, address, email, employment, etc. However, EverBank does conduct a credit inquiry as part of the procedure to verify your identity. You will be asked to answer a few questions based on your credit history, which is retrieved from your credit report during the process.

Not every bank verifies a new customer’s identity through credit inquiry. In the case of EverBank, the credit inquiry is a hard inquiry as it will show up in your credit report, even though it will be different from those when you apply for a loan or credit card. As EverBank puts in their Q&A section:

What kind of inquiry does EverBank obtain and how will it affect my credit score?

EverBank obtains a credit inquiry for the purposes of opening an account. While such an inquiry will show on your credit report, it’s coded differently than an inquiry for a loan and would have less of an impact on your credit score.

So even though it is a hard pull, it won’t affect your credit score that much, if any. However, if you are concerned about the impact on your credit, you can stop the process right there.

After your identity is verified, you will proceed with your application by selecting how much you want to put in your account as initial deposit and how you would like to fund your account. To avoid monthly account maintenance charge ($8.95 a month), you will need at least to have $5,000 in your account, but the minimum balance required to open the account is $1,500.

There are several ways to fund the account, including ACH, which is the method I chose. If you also choose to ACH, you will need to provide your bank’s name, routing number, and account number. Before you can use ACH to transfer funds between your EverBank account and external accounts, EverBank again needs to verify your ownership of the account by making two small trial deposits into accounts to be linked to EverBank. That will take a couple of business days.

After you finished the online application, your account won’t be active until you send a printed form with your signature back to EverBank to complete the process. EverBank will send you an email once they receive the paperwork to let you know that the account is now active. That will take some time, depending on how fast they process your paperwork. For me, it took about a week, so it isn’t too bad.

Oh, one more thing. During the online application, you will not be able to set up access to your account. Rather, you will have to enroll in online banking after the online application is completed. To set up your online account access, you will need to provide your account number.

Well, this is the whole process of opening a savings account with EverBank. As I mentioned earlier, the process is a little bit longer than what other banks have and it asks you to mail the application back to the bank, plus a hard credit inquiry. If you think you EverBank is the bank you want to have, the bank is actually pretty good after going through the application process.

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• Get a 1.70% Annual Percentage Yield on balances of $2,500 or more.
• Get a 10% bonus on your interest earned four times a year. Just open and use your Capital One credit card at least once a month or keep an average balance of $15,000 in your savings account each month to qualify.
• No Fees
• FDIC Insured

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News came out this morning that GMAC, the recipient of billions of dollars of taxpayer money since last December, is going back to the government to ask for more money. That would be the third round of bailout for what used to be the bankrupted General Motor finance unit (GMAC Financial was approved to be a bank holding company in December 2008 for it to receive government rescue fund). This is quite unique for GMAC because no other banks, not even Citigroup and Bank of America which have received much more money from the government than GMAC did, have asked for more than two bailouts. At GMAC, however, the trouble doesn’t seem to end, even after $12.5 billion infusion from the government. You may think that a bank receiving so much taxpayer money should have a better chance of surviving when there are signs that the condition of the economy and the financial market is improving. Unfortunately, that’s not the case for GMAC, which is still struggling to deal with massive losses from subprime mortgages. Now it’s going to ask as much as $5.6 billion more.

While GMAC is still in trouble, its subsidiary, Ally Bank seems to be doing quite well, at least from the rates it offers (Online Savings Account 1.70% APY, 1-year CD 2.00% APY). Actually, the bank has been giving exceptionally high rates since it switched its name from GMAC Bank to Ally Bank six months ago. Today’s news makes wonder how Ally Bank can afford to offer such high rates (Bankrate.com average 1-year CD rate is 1.70% APY). And Ally Bank ads are everywhere. Is it actually because of the billions bailout money it received? Of course, paying a higher rate can attract more savers (I was one of those ), but it also add additional cost to the bank that is in such a bad situation, even if it is a pure online bank.

Now that you know GMAC, or Ally Bank, is not healthy, will it change your perception of the bank?

I still remember what Washington Mutual did the week before it collapsed. After giving it so much money, I don’t think the government will allow GMAC to go under, but  the situation does concern me.

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Membership Rewards

Here’s how it works. With the AMEX Premier Rewards Gold Card, you can earn points up to three times as fast. You can earn triple points on airfare and double points on gas and groceries, while continuing to earn points on all other purchases, such as double points on gas and groceries, and one point on every dollar spent on everything else. Best of all, rewards points have no expiration date, and there is no limit to the number of points you can earn.

For the Membership Rewards Points you earned, you can use them to redeem airline tickets to fly any airline, anytime with no seat restrictions or blackout dates. You can also book hotels, cruises and vacation packages. Use points to pay for your entire trip or a portion of it, and continue to earn points with your favorite frequent flyer and guest programs when you book. Points can also be redeemed for rewards from over 50 of the finest names in shopping and entertainment.

In addition, other membership benefits include:

• Fraud Protection Guarantee
• Return Protection
• Extended Warranty
• Purchase Protection
• Baggage Insurance Plan
• Emergency Check-In
• Assured Reservations
• Car Rental Loss and Damage Insurance
• Travel Accident Insurance

All of these come with an annul membership fee of $175. However, the fee for the first year is waived.

15,000 Bonus Points Promotion

Right now AMEX is running a promotion for the Premier Rewards Card which will give you 15,000 Membership Rewards bonus points when you spend $1,000 in your first 3 months after becoming a cardholder. The rewards points can be redeemed to up for $150 gift card. If you spend $30,000 per calendar year, you can get an additional 15,000 Membership Rewards bonus points.

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The reason for keeping the contribution limit steady for another year is that, according to Labor Department’s latest inflation report released on Thursday, Consumer Price Index (CPI) fell in the third quarter from the same period last year. Because there’s no inflation (at least as the CPI number shows), the annual contribution of 401(k) plan, as well as Social Security benefit, which is tied to the inflation, won’t be adjusted.

This isn’t the first time when the government maintained the maximum contribution of retirement plan unchanged. For example, the limit remained at the same level of $15,500 for 2007 and 2008. The maximum amount was adjusted every two years between 1994 and 2001.

While it makes sense to adjust the contribution limit based on the inflation, there are man people believe that CPI isn’t a good gauge for real inflation because goods that we consume every day, such as food and energy, are excluded from the calculation (the so-called core CPI) because they are volatile. Even though we spend a much smaller portion of our income on food nowadays than when CPI was first measured 90 years ago (the Labor Department started the statistics in 1919), food does become expensive year over year and the costs to fill up our cars and heat our homes also get higher and higher. Further more, since the Fed makes their rate decision based on core CPI, a low reading means the Fed can keep the interest rate low, which will lead to greater inflation risk, especially when the index doesn’t track the increase of  cost of living quick enough.

Now that there won’t be any increase in contribution limit next year, it doesn’t seem to be a big deal for one year. However, it is a big deal in the long term for those who max out their contribution every year. Just consider this: How much will today’s $500 be worth 20 or 30 years from now?

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From now till December 31, 2009, card members can earn up to 1,500 ThankYou points by simply using the card to make purchases in the next three months. Here’s how you can get the bonus points. For every month when you use PremierPass Card to make 5 purchases or more with at least $10 in each transaction, you earn 500 ThankYou points as bonus on top of the regular rewards you will receive when using the card (basically, you earn 2 points for every $1 spent at supermarkets, gas stations, drugstores, commuter transportation and parking merchants and 1 point for every $1 spent on other purchases).

Don’t have a Citi PremierPass Card? Apply for one now to receive up to 20,000 ThankYou points. More details on the bonus offer and how to earn and redeem ThankYou points can be found in my Citi PremierPass Card review post.

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The account works fine for me so far, with the only drawback that the account doesn’t pay any interest. Even though I don’t have a lot of money in the account, it still would be nice if I can earn some interests for the money I keep in it. A supplementary, interest bearing business account I am looking at is ING Direct Business Savings Account. Like ING’s Orange Savings Account, the business account has no minimum balance requirement and no monthly fee and it pays 1.15% APY as of now. The yield isn’t that great for a savings account, but better than other business savings accounts as far as I know. The account can be the savings option for many kinds of businesses, including

• Sole Proprietorships
• Partnerships
• Limited Liability Companies (LLCs)
• Corporations

The only requirement for the business savings account is to have a business checking account at another bank, which I do have with PNC, and link it to ING. Best of all, right now there’s a promotion of $50 bonus when opening an ING Direct Business Savings Account with promotion code BSA282.

I haven’t decided whether to get an account (yeah, another one) or not, but with no minimum deposit required, the $50 profit does looks pretty good

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As I mentioned early, though FHA has no minimum credit score requirement for FHA loans, many loan providers (remember FHA itself doesn’t issue loans. The loans come from private lenders) do impose a minimum score limit, usually starting at 580, on borrowers.

One of the reasons Fannie Mae decided to increase the minimum credit score is to “support prudent risk management and better ensure sustainable homeownership.” The revised requirement is clearly the response to the financial crisis that Fannie Mae, and Freddie Mac, had gone through last year (both Fannie and Freddie had to be bailed out by the government). While the increased minimum score is still much lower than what a private mortgage provider requires for a conventional loan, it’s a reminder for anybody, especially first-time homebuyers, that a good credit score is needed even if you want to buy a home with a FHA loan.

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Well, I don’t think being FREE is the excuse of doing such a poor job. So what I did was to check another popular and free web-based money management too to see how they compare to each other in handling transactions from the same BofA account. The one I chose is Yodlee and like Mint, I haven’t used the account since it was set up months ago. Thus, the comparison is equal.

And here’s what I saw in Yodlee’s Expense Report.

It’s not perfect either, but at least I don’t see hundreds or thousands spent on alcohol, entertainment, or sports. Instead, I see mortgage payments and spending on education (Ohio 529 Plan Investment). And when I go to the details of the transactions, the difference between the way Mint and Yodlee process each transaction becomes clear.

Unlike Mint, the description of the transaction in Yodlee is more complete.  In addition to the Payee’s name, Chase, it also information like payment ID, individual name, and company ID. Basically, the description in Yodlee is exactly the same as the description provided by BofA. In Mint, the description of the transaction only shows as “Chase”.

Both tools wrongly treated a DRIP investment I made to Exxon Mobile through ComputerShares as spending on Gas. I don’t blame them on this because this transaction may not be usual and if a transaction is categorized based on its description, then it doesn’t surprise me a transaction with Exxon Mobile in it being put in the Gas & Fuel category. However, Yodlee does a better job to categorize four external bank transfers as Transfer, not Entertainment as Mint did

Of course, the comparison is far from comprehensive and in order to arrive at the conclusion which one is better, I need to take a deeper look at both. But from what I can see now, Yodlee at least does a better job categorizing the transactions. No wonder many financial institutions use Yodlee too.

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Here’s how you can get $50 bonus from CollegeAdvantage:

1. Follow the step in my previous post to open an account with reference code 2331122 before December 15, 2009;
2. Once the account is opened, set up a systematic saving program to invest in the plan automatically before January 31, 2010;
3. Receive the $25 bonus 90 days after the SSP begins.

Quite simple, right? In order to get the bonus, the following requirements have to be met as well:

• A minimum of $25 must be deducted per month.
• The EFT and payroll deduction must still be active at the 90-day mark.
• For EFT only, a minimum of three EFT pulls must have occurred within the 90 days.
• For payroll deduction only, at least one payroll check must be applied within the 90 days.

I have been using EFT to invest since I set up the plan more two year ago (I didn’t get any bonus back than). In my opinion, an automatic savings plan is all you need to put saving and investing ahead of spending.

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Last night, when I was writing the post about manageME 7, I logged into my Mint.com account first time in many months in order to make some comparison I needed for the post. I mentioned before that I mainly use a desktop version of Quicken to track my finance, not the online version, despite that the web-based too is absolutely free. So even though I have accounts with Mint.com and Quicken Online, I don’t really use them.

Anyway, after I got into my account, what I saw first really shocked me a bit.

Under the Alerts section on the account homepage, I saw messages like these:

• This month, you spent $566.27 on Alcohol & Bars. This exceeds your budget of $480 by $86.
• In the past 30 days, you spent $6,500.00 on Entertainment. Usually you spend $681.
• In the past 30 days, you spent $1,326.60 on Sports. Usually you spend $297.

Since I linked Mint.com to my Bank of America checking account, the only account I use to pay bills, and the downloading was automatic, the transactions are the latest shown in my BofA account. But no way in the world I could have ever spent $566 on alcohol, $1,326 on sports and $6,500 on entertainment in one month.

Realizing that there must be an error, I went back and forth between Mint.com and BofA to check out what those transactions really are. Well, it turned out that the $566.27 I *spent* on alcohol last month are actually payments I sent to Chase to pay my credit card bills; the $6,500 on entertainment are in fact ACH transfers from BofA to my savings account; and $1,326 on sports include more than $1,200 mortgage payment I made to BofA (used to be Countrywide).

We all know how important it is to track each and every spending correctly so the budget, developed based on past spending, can make sense. However, after seeing how Mint.com categorizes the transactions, I have some doubts on whether I can trust the tool to follow a budget and keep spending in check or not (though I don’t have a budget either). Sure, I can edit t the category myself to move the transactions to where they really belong, but that will reduce the value of the tool significantly if I have to manually correct many transactions.

Do you have the same problem as I do if you are using Mint.com too? If so, how do you deal with it? Since I don’t use Mint.com that much, maybe there are other ways to sort the transactions, however it does seem that Mint.com needs to do a better job in categorizing the transactions.

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A few months ago, shortly after Microsoft decided to quit offering MS Money, I wrote a post on where to find alternatives to MS Money, which included bother Quicken Online and Mint.com. While both systems are excellent personal finance tools, they aren’t the only alternatives out there when it comes to manage your money for free. In fact, the arena is getting more and more crowded.

manageME 7 Quick Review

One of many players in this arena is manageME 7, another money management website that offers both paid and free tool.

At the first look, I feel the interface of manageME 7 is rather simple. It offers a few basic functions such as manage accounts (bank, cash, credit, and loan accounts) and transactions, build a budget, set up an alert, and generate reports. While I haven’t tried every tool out there myself, a few that I did used, such as Mint.com and Quicken Online, allow users link their accounts at banks and credit card issuers directly from the site so that transactions can be downloaded right to the manage tool once the connection is set up. This not only is convenient, but also prevents errors from happening as all are done automatically. At manageME 7, however, things are not so automatic.

Once I set up an account to manage in manageME 7, I can choose either to enter transactions myself manually, or import them from a statement that is downloaded from a financial institution. Obviously, I am not going to try to each transaction myself, so I chose to import a bank statement (in this case from ING Direct).

Before importing the transactions, I first downloaded transactions from the past 2 months into a OFX file (manageME 7 supports a few file format such as OFX file, QIF file, CVS file, and BAI file). Then I uploaded the file into manageME 7. The process of downloading and uploading transactions was quite straightforward.  However, the result wasn’t really what I expected to see, probably due to the limitation of the file itself.

The downloaded transaction file contains the right information such as transaction date, type, and amount. However, the final balance isn’t really the account balance, but the balance of the period specified when the file is downloaded. I tested with two file formats, OFX file from ING Direct and QIF file from EverBank, and got the same result. I also tried CVS file downloaded from ING Direct, but the system generated an error, saying the file format wasn’t correct.

I have to say that after seeing what Mint.com and Quicken Online do with transactions, I am a little disappointed by manageME 7 not allowing users to interact directly with their accounts at banks (and probably the same for credit card accounts) to avoid such “error”. If I have to choose, then I prefer the way Quicken or Mint manages transactions: less hassle, more accurate. The reason why accurate transaction information is important is that other management functions, such as budgeting, rely on complete and accurate transactions to work.

manageME 7 Giveaway

I also played a little other functions like set up an alert and generate reports, though I have yet to fully explore manageME 7. Thus, it’s possible that I may have missed the functionality that separates manageME 7 from other online personal finance tools. If you are interested in trying manageME 7 out, the company is offer the first 50 users who register using this link a free Plutus Package (priced at $15 for 40 days).  Check it out to see if you like it.

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Now taking another look at the three offers we got last week, they all have a few things in common: First, the offers are all pretty low, lower than our already reduced list price. Second, the buyers are all buying their home for the first time. Finally, they all will get a FHA loan. When we bought our house five years ago, all I knew was to get a  mortgage from a private lender and make 20% down payment. I didn’t know there are federally insured FHA loans (not that we needed one). Now all the sudden, all three potential buyers need to get a FHA loan in order to buy our house. So what is FHA loan and how is it different from a conventional loan?

What Is FHA Loan?

Well, FHA stands for Federal Housing Administration and FHA loan isn’t exactly a loan. Rather, it is a loan guarantee program insured by FHA. The borrower still has to obtain the loan from a commercial lender who qualifies for issuing a FHA loan. According to Wikipedia, the program started during the Great Depression to provide private lenders insurance for the loans they issued. Now FHA loans mostly serve low-income homebuyers who can’t afford a down payment required by private mortgage insurance companies or otherwise don’t qualify for a conventional mortgage from a private lender. Since each lender sets their own rates and terms, FHA loans will different rates, though most loans carry fixed rates throughout the term (FHA also insures adjustable rate loans).

FHA Loan Requirements

Since FHA loan is primarily to help low-income homebuyers to realize their homeownership, there are certain requirements in order to get a FHA loan. These requirements include:

• Credit score: Though FHA does not require a minimum credit score, many lenders have their own requirement on the borrower’s credit that are usually less strict than what lenders impose on conventional loans. Usually, before underwriting a FHA loan, the lender examines the borrower’s credit with more attentions on the overall pattern of how the borrower uses his/her credit to assess the risk. As long as the borrower shows that he or she has managed previous payments responsibly, past minor mistakes in the credit history will not prevent the borrower from getting a FHA loan. Even people with no credit history can borrow a FHA loan.
• Down payment: Another feature that makes FHA loan attractive to first-time homebuyers with little savings is that the down payment can be as little as 3% of the purchase price of the house. On the other hand, private lenders usually require 3 – 5% down payment and for a down payment that’s less than 20% of the home’s value, the borrower is required to get a private mortgage insurance (PMI).

There are some other requirements for FHA loan, but I found the above two are most related to many of first-time homebuyers, making FHA loan a good choice to help them own their own home

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However, for whatever the reason (nothing has changed in the environment since the Fed has kept the benchmark rate at the same low level for a long time), Ally Bank has decided to move up the rate of their online savings account from the current level of 1.70% APY to 1.75% APY, starting tomorrow. A strange move that I doubt will impress savers. Thought, this is a positive move, I am not impressed. Not only because the rate increase is so small (only 0.05%) that it’s almost meaningless, but mainly because I don’t feel there’s any stability in terms of rates at the bank right now. When I look at a savings account, I first want a good rate, then I want it to be stable. Unfortunately, Ally Bank offers neither from what I can see.

Despite the tiny change, I still hope it marks the beginning of an upward trend. Is that possible? It is, but unlikely. It will be too funny if Ally Bank makes the rate up one week, then down the next.

Update: Ally Bank made another increase of its Online Savings Account in September, which is now at 1.80% APY.

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I got the card in 2006 when I started to make more and more purchases at Amazon.com. I thought getting the card makes sense for the 3% cashback it offers for shopping at Amazon.com (actually, 3 points for every dollar spent and the bonus points can be redeemed for Amazon gift card). Three years later I still have the card, but I only use it at Amazon because rewards for shopping at other places with this card isn’t really that rewarding. With the upcoming upgrade, however, it seems that the card can get a little more usages.

The upgrade will come on October 1, 2009 automatically for existing cardholders. With the new Signature card, card members can enjoy one more newly added benefit: get 2 rewards points for gas, dining and drugstore purchases for every dollar spent, in addition to the usual cashbacks for shopping at Amazon.com (3%) and elsewhere (1%).

These days, I can pretty much get 1% rebate with any credit card that offers a rewards program, but not many will go above the 1% mark and it is becoming increasingly difficult to get good rewards from card issuers because of changes in credit card rules (I think the new law actually punishes people who are using their plastics responsibly). In this environment, I think 2% cashback, though limited to only gas station, restaurant, and drugstore purchases, is a pretty good offer.

With the above being said, I don’t think I will switch to the Amazon card any time soon. Right now, I am still getting 3% cashback from Chase Freedom card at gas stations and grocery stores. When shopping at other places, I use Fidelity 529 card which gives me 2% back on every purchase. As long as I still have these benefits, I will stick with them for my everyday purchases.

BTW, the 2% rebate isn’t the benefit the new card will start to offer. The Amazon.com Signature card will also become a card with no pre-set spending limit, which I am not sure whether it’s a good change or a bad one.

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When I updated our July net worth early this month, I mentioned that I opened another savings account. That’s was barely one month after I got an account from Ally Bank. The reason is that I became extremely disappointed by Ally Bank, not only because of all the troubles I had with the bank, but also the rate. I thought I got a good deal from a bank with a long track record of offering competitive rates. It turned out to be a big mistake.

Before getting the new account in July, I already own a bunch of accounts from a bunch of banks. However, none of them really deserve my money since their rates are all in the 1.40% to 1.70% APY range, far below than the 2.00% APY that I’d like to have. Then I looked around, but didn’t find many options. Good rates are very, very rare these days. After some research, I decided to go with EverBank. The bank currently offers a bonus rate of 3.01% APY, which is much higher than any other bank I have an account with is offering. However, the rate rate is only good for the first 3 months, then it will drop to the current rate, which is at 1.75% APY  right now, still better than what I get from Ally Bank or Dollar Savings Direct.

The process of opening a EverBank Yield Pledge Money Market Account is quite simple, though it does have a couple of more steps than other banks. For example, after the online application is completed, then bank asked me to print out the signature page, which certifies that the SSN I provided during the application is correct, and mail it back to the bank. I heard before some people said that EverBank was more difficult to deal with because of their verification process. To me, however, everything appeared going quite well (read more about EverBank Money Market Account including minimum deposit and monthly fee). I opened the account on July 22nd. On July 28th, the bank informed me that they have received my signature page and the account is good to go. The processing time is a little longer than that of other banks I have dealt with, but still acceptable (I’d like to have the entire process finished online only, no paper work involved though).

Once the account is up, the next step is set up external ACH transfer so I can move money between EverBank and my checking account at Bank of America. EverBank uses trial deposit to verify account ownership which takes about 2 days to complete. However, setting up the external account is a little bit tricky with EverBank. On the account home page, it has a button to “Add External Account”. But I can’t use that function because Bank of America (New Jersey) isn’t in the list of institutions that EverBank supports. To add my BofA checking account, I had to go to Transfer Funds, then External Transfer, then Add Transfer Account, and manually enter the routing number to find my bank. I wish EverBank has the option to enter bank routing number on the “Add External Account” page instead of only listing some banks and letting you select from there.

Another thing I noticed at EverBank is that the ACH fund transfers take a little bit longer to appear in the account than at other banks. I made two transfers on the same day, one to EverBank and one to another bank. The one to EverBank, which was my initial deposit, took exactly 5 business day to appear on my account while only 3 days to the other bank.

Once the external transfer accounts are set up, EverBank seems to be working fine for me. Of course, I don’t really use a savings account that much, so I rarely have issues with the bank (Ally Bank is an exception though).

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Then last week, I received two letters containing price change from American Express for two cards I own: Costco TrueEarnings Card and Optima Platinum Card. Citing changes in the business and economic environment, AMEX says in the letters that it found it’s necessary to increase rates and fess on some of its products. Particularly beginning the bill cycle on October 1, 2009, it will raise APRs on purchases and cash advances and increase the late fee. Even though I don’t think these changes will affect how I use the cards (I never withdrew any cash using a credit card and was never late in making a payment), I decided to go through the letters carefully this time to see what will be changed, given how much talk there is on how credit card issuers are making changes on their policies when they still can.

Starting October 1, 2009, AMEX will change the standard APR for purchases to the Prime Rate plus 11.99%, which is 15.24% as of August 1. The APR for cash advances is increased to the Prime Rate plus 21.99%. Currently the APR for purchases on my cards is at 13.24%. The 2% increase actually isn’t too bad. However since I didn’t have any financial charge against me before, I thought I should be rewarded with a lowered APR for being a good customer, not a higher APR. As for the late fee, AMEX has decided to adopt fee structure that depends on the amount of balance instead of a flat fee. If the balance is below $250, the late fee will be $19; otherwise, the fee will be $39.

It’s no all bad news though. In the letter, AMEX also says it will eliminate the over-the-limit fee at the same time when the above price changes take effect.

At the end, AMEX didn’t forget to remind me that it’s important to keep my balance under my credit limit and pay my bill s on time to avoid late fee.

Well, we all know they are the obvious when handling credit cards.  That’s what I have been doing for years and it’s why I don’t really care these price changes

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In July and August, Citi card members, who hold either their credit cards or debit cards, can get different live concert for as low as $5 each. The tickets are offered through Citi Private Pass, a loyalty program that rewards Citi cardholders with discounts for special events. If you are a card member, you can buy $5 ticket to a bunch of different concerts through the end of August. The concerts are called Lawn Ticket concerts and have different types of music, from Depeche Mode to Nickleback, a great deal for music lovers in this tough economic environment.

Don’t have a Citi card? There are a few cards that Citi offers are quite attractive with good benefits, some already being discussed here, such as the Forward Card, Forward Card for College Students, and PremierPass Card. Once you get the card, just go to Citi Private Pass and purchase tickets to the concerts you like with promo code “CITI” followed by the first two digits of your Citi credit or debit card number.

You have until August 31st to enjoy those cheap concert tickets of the summer

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Looks like there are a lot of drama. I wonder how long that $2 billion will last.

Anyway, I stumbled upon this Cash for Clunkers Calculator on Edmunds, the website where you can get free quotes and research a vehicle, etc.

Edmunds claim that the calculator can help you quickly determine:

1. If you have a vehicle that may meet the criteria for the Car Allowance Rebate System (CARS) government program.
2. If this Program makes financial sense for you based on the True Market Value of your current vehicle.
3. What credit amount you can expect to receive, given the vehicle you are interested in purchasing.

I didn’t try the calculator myself because I have no need of it so I can’t tell whether it’s good or not. But if you are interested in taking advantage of the incentive to get a fuel efficient vehicle, try the Cash for Clunkers calculator to see whether your car qualifies or not and how much credit you can get before you head to the dealership.

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