Banking 
11
comments

How I’m Reacting to the Rate Cut

Fed Cuts Rate to 0-0.25%The Fed announced in their December FOMC that they were lowering their target federal funds rate “range” to 0.00% to 0.25%, a drop from the former target of 1.00%. While it was seen as mostly a symbolic move, since the actual federal funds rate was much lower than 1.00%, the language surrounding the numbers made it sound like the Fed was willing to do anything to pump up liquidity, including doing something its never done before called quantitative easing. I don’t want to get into the technicalities of everything because for most people, the biggest part of that announcement was that interest rates are going lower.

When the Fed cuts interest rates, the first thing that happens is interest rates on all banking products will go down. As you may remember, savings rates aren’t guaranteed and are variable, they can change at anytime. The same is true for the interest rates on checking accounts, money market accounts, etc. The only rate that is ever guaranteed is on a certificate of deposit (CD) and that’s only locked for the term of the CD.

Emergency Fund

I currently have our emergency fund laddered in CDs at ING Direct so there will be no changes there. I’ve been slowly rolling over CDs each month into an FNBO Direct CD because their one year rates are half a percent higher (FNBO Direct 12-month CDs are 4.00% APY vs. ING Direct 12-month CDs at 3.50% APY), but it’s been slow going since only one CD matures per month. If you don’t have your emergency fund locked into a CD ladder, you should consider it.

Mortgage Rates

Mortgage rates are falling hard. My friend emailed to let me know that his broker has rates for 30-year loans at 4.50% and Wells Fargo has 4.75% listed on their list of today’s rates. Under 5% for a thirty-year loan is absolutely ridiculous. While we’re not in the position to buy another home, if you were waiting on the fence, now is a fantastic time to start looking because the rates are so low. If and when we do have the ability, I hope that these low rates are still around.

Regular Savings

The only rates that will stick are those promotional rates guaranteed by banks. The best example I can think of is Everbank, they’re guaranteeing their 4.01% bonus rate for three months but then they’re going to drop you back down to whatever it is the rates will fall to. Does that mean you should rush out and open an Everbank account? Not necessarily, because we won’t know what the rate is afterwards but that’s the type of high yield savings account that will guarantee a rate for a specified time and still give you the flexibility of moving your funds around. If you don’t lock it into a CD, your rate can change at anytime.

Who knows what will happen in the next few months to the next year with regard to our economy, but the one thing you can be sure of is that banks will be lowering interest rates in the short term.


 Personal Finance 
9
comments

Fun Facts About The Great Seal of the United States

Reverse of the One Dollar BillIf you’ve seen any conspiracy theory movies involving Freemasons or other secret societies, you probably remember numerous references to the Great Seal of the United States on the reverse of the one dollar bill. Stories about secret societies make for great movies but real life is probably less glamorous (it always is!). I thought it would be interesting to look at the seal, as many have done beforehand, and explain a little of the imagery.

The image on the left, with the pyramid, is considered the reverse (back) side of the seal. The image on the right, with the eagle, is considered the obverse (front) side. In 1776, Congress established a three-person committee to design the Seal, but they never completed the task. Over the next six years, two more committees were formed until a final design was assembled by Charles Thomson, secretary to Congress, in 1782.

Obverse Side

The most prominent part of the Seal is the bald eagle, representative of liberty and freedom. In his talons are an olive branch (the strong right talon) and a bundle of thirteen arrows (the weaker left talon), with the eagle always looking towards the olive branch. The olive branch represents peace while the arrows represent war, thus representing the fact that the power to declare peace and war were the right of Congress alone. The thirteen arrows represent the thirteen colonies and strength in unity. On the eagle’s chest is a shield with thirteen red (6) and white (7) stripes supporting the blue, signifying that it is the states (stripes) who support the federal government (blue). “E pluribus unum” (Out of many, one) is written on the ribbon clutched in the eagle’s beak, reinforcing the idea that the federal government comes out of the authority of the states. Finally, the constellation of thirteen stars breaking through the clouds signifies that this new federal government, with thirteen states, should take its place among the other sovereign nations.

Reverse Side

The reverse side is less exciting but has several bits of imagery worth checking out. First, of course, is the pyramid that dominates the Seal. The pyramid represents strength and duration, much like the great Pyramids at Giza still remain. The pyramid has thirteen levels, though that was explicitly called out in the original design. Atop the pyramid is the Eye of Providence, or God, to watch over. Over the eye, there is the Latin phrase “Annuit Cœptis,” which loosely translates to “favors undertakings.” It referred to Providence, or God, favoring the undertakings of the United States. The other Latin phrase, Novus ordo seclorum, translates to “New Order of the Ages.” Finally, the Roman numeral MDCCLXXVI, at the base of the pyramid, translates to 1776.

Fun Facts

  1. The obverse side of the Great Seal is used to emboss the design onto Treaties and other official documents and stored in the Exhibit Hall of the Department of State.
  2. Benjamin Franklin wanted a wild turkey instead of the eagle, but that never made it into the final design.
  3. The Secretary of State is the official custodian of the Great Seal.
  4. In the original design submitted by one of the Great Seal committees, the eagle was a phoenix. The phoenix represented how the United States rose from the ashes of the Revolutionary War against England. The phoenix, however, never appeared on the official Seal.
  5. The Seal didn’t appear on the dollar bill until 1935.
  6. The shield on the Seal has 6 red and 7 white stripes while the United States flag has 7 red and 6 white stripes.
  7. On many flags and seals with shields, the shield is often supported by other figures. It was important that the shield be supported by the eagle, indicating the United States ought to rely on itself for support.
  8. God is refered to as Providence in the closing sentence of the Declaration of Independence: “And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.”
  9. Novus ordo seclorum, New Order of the Ages, comes from the fourth Eclogue of Virgil. Virgil was a very famous Latin poet and the Eclogues were one of three of his major works.
  10. The obverse side of the seal is very similar to the Seal of the President of the United States. There are some minor differences but the general imagery is the same with one exception. Until 1945, when President Truman signed Executive Order No. 9646 and specified the design of the Seal, the eagle faced right and towards the arrows.

Hope you enjoyed the trivia!


 The Home 
25
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In Defense of Artificial Christmas Trees

Christmas Tree & StockingsI’ve never had a real Christmas tree before. I’ve always had artificial trees, the ones made of plastic and wire, and figured that most people did. While I don’t know the statistics but if the number of Christmas tree stores springing up on the side of major roads is any indication, I might actually be in the minority! Either way, I prefer artificial trees and here are five reasons why:

  1. Nothing to chop down, pick up, or dispose of: You don’t need to hop into the car, go to a Christmas tree farm, select one, strap it to your roof, and then drive it home. While that is part of the fun of getting a Christmas tree, that’s also a pain to do. It’s also not as ecofriendly as getting an artificial tree since you’re chopping down a tree and then disposing of it somehow.
  2. It’s cheaper: I picked up our current artificial tree on Craigslist for $20, which sure beats buying a real one each and every year (not including transportation costs.
  3. It’s safer: If our Christmas tree gets too dry, the heat from the lights could cause it to catch fire. It’s a real problem, check out this US. Fire Administration page all about Christmas tree fires.
  4. It’s reusable: I mentioned it earlier as part of the cost but it’s worth repeating because its reusability is one of the reasons why I think it’s so ecofriendly. Certainly plastic and wire are less friendly than actual wood, but you have to chop down a tree (then toss it) to get your real tree when the artificial one only needs to be made once.
  5. It’s non-allergic: Lots of people are allergic to Christmas trees, hardly any are allergic to artificial ones! (unless you count dust)

If you celebrate Christmas, I’m curious, do you prefer real or “fake” Christmas trees? If you prefer the real ones, I’d really like to hear the pluses from someone who has had them and swears by them. I can see the benefits, but not having experienced them I would feel disingenuous trying to list them.

(Photo: scottfeldstein)


 Frugal Living 
26
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4 Things We Are Duped Into Thinking We Need

There are plenty of things we absolutely need. We need food. We need water. We need shelter. Heck, Maslow built a career on a hierarchy of needs that we absolutely must satisfy (with an order too!). Somewhere along the line, the massive marketing and advertising machine that is capitalism, our needs became converted and adjusted to fit the bottom line of some firm. Much like how the term “hero” is often overused (athletes aren’t heroes, first responders are), we often call something a “need” when in reality it’s a want.

Here are just four “needs” that really and truly are simply “wants:”

A 5-Bladed Vibrating Razor

Gillette Fusion vs. Simple RazorCompanies often feel as though they need to constantly innovate or be left behind. Cannibalize yourself or your competitors will. That’s probably the logic that led to one of the most ludicrous innovations in straight razor technology, vibration. The Gillette Fusion razor is a five-bladed razor that vibrates, effectively simulating an automatic shaver. The vibration does absolutely nothing, yet they have convinced many that this innovation is worth $9.99 (current price on Drugstore.com). It might be unfair to pick on Gillette but many razor companies rely on fancy innovations to try to win your business. While one could argue whether we actually “need” to shave, the fact is we don’t need a $10 razor ($15 for a refill 4-pack) to do it.

Adding more blades doesn’t really add much to the equation anymore either. When razors went from one blade to two, the incidence of cuts went down dramatically because the pressure per blade was halved. From two to three, the pressure was cut down by a third. From three to four, that’s only 25%. How many innovations do we have left and how much more are we willing to pay for a razor?

Stainless Steel Appliances

Stainless Steel AppliancesWhen the housing boom was in full force, THE thing every home must have was stainless steel appliances. The dishwasher, the range, the fridge, and even the microwave had to have that reflective sheen that screamed “modern.” It was partly style, partly preference, but hardly any substance because stainless steel meant absolutely nothing. None of the benefits of stainless steel really apply to the kitchen appliances. How often is your dishwasher subjected to ultra-high temperatures? Hopefully never. How often do you clean the exterior of your fridge? You probably wipe it down every once and a while (ours is covered in magnets and clippings, I haven’t wiped it down in three years). Stainless steel, outside of aesthetics, offers no appreciable benefit… unless you’re selling it.

The Swiss-Army-Knife of Cell Phones

Apple iPhoneLet’s take the basics of a cordless phone and pimp it out so hard that people would be willing to pay hundreds of dollars for them and sign up for service plans that will slowly extract thousands. When you get past the “cool factor” and technological beauty that make up today’s smartphones like the Apple iPhone and Blackberry (whatever), they all do the same thing as a phone that a telephone company would give to you for free.

Somewhere along the line, we became enamored with the fact that we could get a phone that take photos, capture video, send and receive text messages, surf the web, play games, and do all sorts of really cool things. Don’t get me wrong, I think the devices are absolutely wonderful… but how connected do you really need to be? On a recent trip to London, my wife and I had no cell phone and felt absolutely wonderful about it. No phone meant no work emails or work “emergencies” (that are never emergencies). While it also meant no maps or search, we fared perfectly well by asking complete strangers where the nearest tube station was. The phones certainly are nice… but we don’t need them.

900 Channels on Cable Television

Busted TelevisionIn our “more is better” society, cable companies have learned that the quickest way into our wallets is by touting how many million channels they offer. The reality is that we watch very few of them. For the last week, we wrote down how many channels we watched and the answer was eight. We watched full shows on NBC (Heroes, Law & Order(s)), ABC (Desperate Housewives, Grey’s Anatomy), and FOX (House), and NFL Network (Thursday Night Football). And we popped in on TNT, Discovery Channel, CNBC, and History Channel. Of the hundreds of channels that we get through Verizon FiOS, we watched eight. Eight is probably about average too, sometimes we touch on a few more random channels (Food Network is always popular, we just didn’t catch any last week), but considering we have so many, isn’t it odd that we only watched 8?

It’s probably not that extraordinary and I suspect many people share our experience. We simply don’t watch a lot of television (some would say we watch too much!). I think that if we were to cut out cable television, we wouldn’t miss much. We could still catch most of our shows on the regular network’s websites or Hulu.com (every 30 Rock episode I’ve ever seen was on Hulu.com). Another great online site for free television shows is Sling.com.

Can you think of any needs that are really just wants?

(Photo: Gillette Fusion by dbarefoot, Stainless steel appliances by john-schilling, iPhone by johanl, Television by janramroth)


 General 
3
comments

Tweet Tweeeeet: I’m On Twitter

TwitterI don’t think I ever mentioned to you all that I started using Twitter from time to time. On most weekdays I would tweet a few news stories that caught my attention or funny things I saw, and most weekends I’ll be either complaining about or celebrating whatever is happening in the NFL. I’m going to be changing my approach to Twitter and hopefully you’ll join me.

In addition to interesting news and stories that I find, I’ll start running contests to give away books, maybe some gift cards, who knows. If you want to win any Twitter only giveaways, be sure to follow bargainr (me).

Since 140 characters forces me to be brief, I’ll also be using it to publish anything particular useful and simply too short for a blog post. Good deals and awesome freebies certainly fit the list, but also any particularly hot financial offers that might be extremely timely. Blog posts tend to be longer, I’ll be using Twitter for the shorter stuff.

I won’t be posting updates every time a post is published here unless I feel it’s an especially good or timely article. I get irritated when I follow someone and just get updates about their blog posts, since I’m usually subscribed. If you aren’t subscribed to this blog, I really think you should because this blog is freaking awesome… just ask the 7000 people already subscribed, they wouldn’t have if this blog weren’t so unbelievably useful and good. :) Full subscription options and instructions here.

As always, if you want to reach me, the easiest and fastest way is to email me but I think we can have some fun with Twitter too. If you’ve been waiting to join, consider this an invitation. :)


 Personal Finance 
22
comments

The Mythical Thin Wallet

A Costanza Wallet (with Rubber Band!)As a New Yorker and a product of television in the 90′s, I got a heavy dose of Seinfeld. If you watched any television in the 90′s, chances are you saw a fair amount of it too. Whether you were a fan or not, one of the show’s many topics leeched out of TV land and into normal society – the Costanza wallet. For those who don’t know what it was, it was the receipt-packed wallet that was so full, George Costanza had to even it out by sticking napkins in his other back pocket. If I didn’t clean out my wallet every once and a while, it would certainly grow to a size that rivaled Costanza’s. (by the way, if you need a rubber band to hold your wallet together, you have way too much stuff)

That being said, the holy grail of wallets now is that of a thin wallet. A wallet that doesn’t burst at the seams and carries only that which you absolutely need on a daily basis. Let’s be honest, you don’t really need to carry all those cards, receipts, and a fat stack of cash every day. Why not invest in a thin wallet?

Why You Need A Thinner Waller

By carrying less, you force yourself to plan. Thinking about going to lunch this Friday at your favorite restaurant? Better plan for it by putting that frequent diner card in your wallet. Need to buy a shower curtain at Bed Bath & Beyond? Snatch up one of those 20% off coupons. By thinking about what you’re carrying, you’re forcing yourself to plan your spending. By forcing yourself to plan, you reduce the number of impulse decisions. By not carrying everything, you give yourself an excuse to avoid making those impulse decisions. In the end, you save a little bit of money in the process.

Thin wallets might help your back. I’ve never had a wallet that was as wide as Costanza’s so I can’t claim that carrying a thin wallet will help it, but it’s certainly more comfortable. There are times when I feel like I’m sitting on a small book, so I take it out and stick it in my jacket. A thinner wallet really is more comfortable to sit on.

Thin wallets can fit in your front pocket, making them more secure. When we went to England, I pulled a lot of non-essentials out of my wallet. There’s no reason to bring extra credit cards (I brought the Capital One card I deemed the best international credit card and an American Express) or any of those frequent dining cards either. With a thinner wallet, I could easily put it in the front pocket of my jeans, a harder pocket to pick.

How To Slim Down Your Wallet

Have I convinced you? If so, here are some tips on how to slim down your overweight wallet:

  • Get a smaller wallet: This seems obvious but it’s often not the first thing people think of. The less space you have, the less stuff you can carry. You can always jam pack the billfold area with receipts but with fewer pockets, you carry fewer cards. Your former fat wallet may not take kindly to being thinner, much like rapid weight loss leaves a little extra, your wallet may have become irreparably stretched to the point that fewer cards means the ones that are left slip out.
  • Clean it out regularly, like every day: Whenever you get home, open your wallet and clean it out. By keeping it clean, you ensure it will have a nice long thin life. Once you get into a habit you won’t consider it a chore (it can’t take more than a few seconds).
  • Carry less cash: Carrying a lot of cash might make you feel powerful (it’s a proven psychological fact) but it’s riskier. If you lose cash, there’s no recourse. Credit cards offer protection (and cash back). They also take up less space.
  • Carry only those credit cards you need: You don’t need more than a couple credit cards, the rest is just a waste of space. This is where you need to decide if you prefer the maximum cash back, or a thinner wallet. This is also where you can do a little extra planning too.
  • Skip photos: I’m sentimental and keep a photo of my wife and I when we were “my girlfriend and I.” I still have it but you might consider removing the photos you have, how often do you look at them? This may be risky to admit, but I don’t look at it all that often.
  • Recycle receipts: If you reconcile your receipts, you should put them in a pile next to your computer and not leave them in your wallet.
  • Get keychain reward cards: A few years ago, stores began to put your reward or loyalty card’s barcode onto little tabs you can attach to your keychain. Use those instead of the card itself and save some extra room in your wallet.

The mythical thin wallet has many strong suits and very few weak ones, give it a try for a week and see how much better your back feels! :)

(Photo: shareski)


 Credit 
3
comments

Best Charity Credit Cards

Charity credit cards, credit cards that donate a portion of your spending to a charitable organization, have increased in popularity the past few years as companies vie for your business. In the past, credit card companies often replaced reward programs with these charitable programs, keeping their costs the same while offering something new cardholders may prefer. Now, many of the charity credit cards offer both – the standard 1% rewards program plus a small donation based on your spending. With where transaction fees are nowadays, it doesn’t cut too deeply into their bottom line.

(Click to continue reading…)


 Government 
7
comments

Fannie Lets Foreclosed Renters Stay

Foreclosure Averted!Fannie Mae announced today that it would allow thousands of tenants remain in foreclosed homes as long as they stayed current on their rent. About 4,000 renters signed new leases and were permitted to stay in their rentals even though the property’s owners had been foreclosed on. While it turns Fannie Mae into a landlord, something it’s probably ill-equipped to handle efficiently, it’s probably the first action they’ve done in a long time that has made people smile.

The reason they’re doing it is because it makes financial sense (and they were forced to do this by the $700 billion Emergency Economic Stabilization Act). In a hot housing market, a foreclosed home can be sold fairly quickly. In the current housing market, foreclosures can sit for months, slowly (or quickly) eroding in value. By letting renters stay in those homes, instead of evicting them, Fannie Mae can leave those properties on auto-pilot and worry about the rest. Also, as someone who has considered buying rental properties, an occupied property is more valuable than a vacant one. It’s unorthodox but we live in challenging times.

I’m also glad renters aren’t getting screwed because their landlords were financially irresponsible. The renter shouldn’t be punished because the landlord made a mistake. I once knew a guy at one of my former employers who owned four homes during the housing boom. He would buy them with a low rate ARM, wait a few months, then use whatever equity he had built up to buy another. I used to hear me argue all the time on the phone with tenants about broken water heaters and I had no doubt he was a miserable landlord. Well, I heard now that all those properties are behind and now those tenants would probably be evicted.

One of the benefits of owning your home is control. When you own a home, you are in control. It may not seem like it sometimes but you truly do control your destiny, more so than if you are a renter. Unless you agreed to an ARM, your mortgage payment remains the same each year (it may go up because of taxes, but the principal and interest are the same). You won’t one day discover you have to move because your landlord was foreclosed.

That being said, I’m glad 4,000 families won’t have to be searching for a home in the winter. What do you all think of this?

(Photo: respres)


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