April is one of the months that I have designated to check my credit report. Since you’re allowed (by law) a free credit report annually from each of the 3 credit reporting agencies, that gives you an opportunity to check one report every four months. Here’s the schedule I recommend:

• April (because everyone’s thinking about money anyways because of the tax deadline)
• August (because it’s four months after April)
• December (it’s another four months later, and also the end of the year, another convenient time)

So consider this your reminder for April to pull your credit report from one of the three agencies this month! You’ll need to assign one credit reporting agency to these months, to make it work, since you’re only allowed to pull each report once a year. So do something like this:

• April – Experian
• August – TransUnion
• December – Equifax

Remember, despite what TV commercials starring singing characters might tell you, there’s only one authorized source for getting your federally-mandated free annual credit reports: AnnualCreditReport.com. You can verify this fact at the Federal Trade Commission’s website.

Getting Your Credit Report, 100% Free

Information You’ll Need to Have Handy

When pulling one of your 3 credit reports from AnnualCreditReport.com, you’ll be asked a short series of questions to prove your identity (so that, in theory, no one else can pull your reports).

You’ll need to know (or have handy to type in):

• Your full name
• Your Social Security Number
• Your current address
• Any addresses you’ve lived at in the last two years

Once you hand over this info, you’ll be given the opportunity to request your report from any of the 3 credit rating agencies:

• Experian
• TransUnion
• Equifax

If this is your first time pulling your report, it doesn’t really matter which one you pull. For simplicity’s sake, I recommend pulling Experian, as it always seems to be at the top of the list, so it will be easier to remember that it’s the one you pulled if you forget. Now’s the time to establish your April/August/December calendar for pulling each of these.

Once you select a credit reporting agency to pull from, you will be asked a series of multiple-choice questions about your own credit history (or other things that might appear on your report, such as previous addresses and phone numbers, etc. etc.) to further prove your identity. Again, this is information you should already know or keep handy.

You may also be prompted to buy some “up-sell” products, like your credit score. Ignore everything they offer here – even if you do want to buy your credit score, they’re not likely to offer you the best of their best deals at this point. Do your research on the cheapest ways to get the score you want (see below) first.

Then, you should get access to your report! You should print a copy of both the receipt page (which you’ll get even though you didn’t pay anything) and your credit report itself. If you’re using Google Chrome or have a PDF printer installed (highly recommended!), you can print to PDF and save part of a tree – as long as your hard drive is secure and you do regular secure backups, of course. This is sensitive information that an identity thief would love to get their hands on!

What am I Looking for When I Look at my Credit Report?

Two things!

#1 – Errors

It’s a pain in the behind, but read your entire report and look for anything that’s inaccurate. You can dispute inaccuracies with the credit reporting agency to get them removed. Inaccuracies can hurt your credit score, prevent you from getting a loan, job, or insurance down the line, or just plain make it hard to get your report again in the future (thanks to those multiple-choice questions!).

If you do find any errors, there should be instructions within the report itself (or back on your receipt or confirmation page) on how to dispute them. If not, do a quick Google search for “disputing errors [name of credit reporting agency that you picked].”

Even if there aren’t any errors, there could still be bad stuff…

#2 – Areas for Improvement

While you’re reading your credit report, look out for anything you could be doing to improve your report. What can you do, exactly? Well, if you familiarize yourself with the 5 components of your credit score, you can identify ways to influence those components.

Those 5 components are (in order from most influential on your score, to least):

1. On-time payment history
2. Debt-to-credit ratio
3. Length of credit history
4. Variety of credit used
5. Recent “hard” credit inquiries

Keep these things in mind while you look over the report. Just keep in mind that in most cases, there’s nothing you can do to “fix” what’s already on your report – you can only strive to do better in the future.

For most people, most of the time, pulling your credit reports one at a time, three times a year, to check them for reports and areas to improve, is all you really need. But if you’re curious about your credit score, or if you’re going to be shopping for a big loan (like a mortgage) in the near future, you may decide that you want access to that score.

How I Get My Credit Score for Free

Before we get into how I get my credit score without forking over any cash, it’s important to establish that there are many different credit scores out there. You may actually have as many as 100 different credit scores floating out there for you. Scary thought, huh?

Most people divide credit scores into two types:

• FICO – credit scores based on one your three reports using the Fair Isaac Corporation’s algorithm (aka the five criteria for a good score I outlined above)
• FAKO (pronounced “Fake-O”) – anything else

A FICO score is what a lender, employer, rental authority, or insurance agent is most likely to look at when they pull your credit score, so ideally that’s the credit score you want if you’re pulling your score to find out exactly what such a person will see.

Credit Karma

It’s a FAKO score (TransRisk Credit Score, an algorithm of TransUnion’s design based on your report from the same), but it’s free and you can request it from Credit Karma as often as daily without putting a “hard” inquiry on your credit report. You also get two more FAKO scores: your Auto Insurance Score and your VantageScore, as well as some tips for improving your score and some savings offers.

How accurate are these scores to your real TransUnion FICO score? Hard to say, unless you also pay for your FICO scores to compare. But, the real question is: does it really matter for your purposes?

If the only reason you want to see your credit score is to satisfy curiosity, and to keep an eye on the changes of it over time, then the TransRisk score will work just fine for that. Keep any eye on your score for any drastic changes, checking it at least as often as you pull your free reports (but monthly would be even better).

Get a Loan

This may seem counter-intuitive, but it can work! If you’re reasonably certain of your good credit score (by checking it on one of the other sources in this post, and checking your credit reports themselves), you can get your true FICO score for free while getting a loan.

How? You just ask!

When I bought my Camry last summer, the dealership helped me apply for a loan at several different financial institutions. When the offers came back a few days later, the finance guy at the dealership showed me the credit reports and scores that had come back when the banks evaluated me. Now, I could have just jotted down those numbers quickly, but I did one better:

I asked the dealership finance guy if I could have copies of all those papers! (It was definitely one of those it never hurts to ask moments.) He walked me back to their copier on the spot, giving me hard copies of my FICO and other credit scores from multiple agencies. Score!

This will also work when applying for a Peer-to-Peer loan from either Lending Club or Prosper; Jonathan over at My Money Blog has a guide on how to interpret your score based on the information you get while applying for a loan at either of these places.

The catch here is that your credit score will be a little dinged, since you’re doing what’s called a “hard inquiry” rather than the “soft inquiry” of checking you credit score just to check it. Oh, and you’re applying for a friggin loan, which you should never do unless you have a darn good reason, like needing to replace your dying car with an affordable, reliable, used one.

myFICO Free Trial

Get your FICO score, right from the source. When you sign up for myFICO’s Score Watch, you get a 10-day free trial that also gives you your FICO score (just the Equifax one, I believe) and your full Equifax credit report.

The catch on this one is simple: you’ll be charged $14.95/month for a minimum of 3 months if you don’t cancel within the 10 day free trial.

Credit Sesame

Another FAKO score like Credit Karma, Credit Sesame is based on your Experian report. It’s also free with no credit card required to sign up, and you’ll get free advice on saving money and improving your credit, too.

The catch? You can only get your score once a month- but if you’re just looking to see how your credit score is doing over time, do you really need it more often than that? No, ya don’t. This is a good addition to Credit Karma, since it diversifies your “score base” a bit here by giving you access to an Experian score vs. Credit Karma’s TransUnion-based score.

Bankrate’s FICO Score Estimator

A few quick questions about your credit history, and Bankrate.com’s FICO Score Estimator will spit out a fairly accurate guestimate of where your credit score is. The catch being that it is, of course, only an estimate.

Alternately, Just Bite the Bullet

If you really, truly, actually need your FICO scores because you’re taking out a big loan soon (such as a mortgage), than the best thing to do is to just pay for your FICO scores. In the grand scheme of things, the $15 or so you spend now will reap much larger benefits down the road.

You can use your FICO score to empower your search for the best loan with the lowest rate – but only if you know it! A FAKO score won’t cut it in this particular case, so it’s worth spending the cash when you are actually about to start shopping for a loan.

Remember to shop around for your FICO scores, as well! There’s no need to pay more than you have to, and considering I’ve seen ranges between $14.95 and $89.95 to get your three FICO scores, it really is worth it to do a little research. Check the websites of all three credit rating agencies, as well as myFICO, to see what they’re offering. Don’t forget to Google for coupon codes to each one!

Do you check your credit reports and credit scores as often as you should? Make a pledge to April/August/December in the comments!

Related posts:

1. Reminder: Check Your Credit Report
2. It’s Time! Check Your Credit Report
3. College Money Tip #5: Get Your (Free) Credit Score

For many college students, money is tight. They might dig through the couch cushions to find entertainment money or return their pop bottles and cans for a deposit refund to pay for books. Other desperate students find side gigs as babysitters, or on campus as work study students.

If you are a college student living on a tight income (or you know someone who is), the best way to make money and still have enough time to go to school is to do a variety of side jobs.

However, recently a few companies have offered college students financial incentive to get good grades. How sweet is that? College students can earn money doing what they are supposed to do–study and do well in school.

Interested? Here are some companies that are offering this program:

GradeFund

GradeFund doesn’t exactly give a college student money for getting good grades, but they offer an incentive. The student sets a goal for the grades she would like to achieve in a particular course or semester, and then the student must find sponsors to pay her if she achieves her goals. Sponsors can be family members (hello parents!), friends, or even corporate sponsors.

Why would a corporation want to sponsor a student and encourage her to get good grades? It is not entirely altruistic. The corporation often uses a site like GradeFund to encourage students to take a particular path in their education. They may even hire some of the students they sponsor when they graduate, according to Mashable.

Ultrinsic

Ultrinsic can also monetarily reward college students with good grades, but their approach is different than GradeFund. Rather than sponsors, Ultrinsic asks students to register, and then, based on several factors, Ultrinsic offers the student a wager of the possibility of the student getting a certain grade in a certain course.

While some may frown on this as gambling, others say it just provides an incentive for students to achieve good grades.

College

Yes, that is right, some colleges pay their students for good grades. A few community colleges in Louisiana experimented with paying their students for good grades. The students in the study had to go to school at least half-time and maintain a C or better GPA. In return, they could earn up to $1,000 over two terms.

While this was a pilot program, several other colleges have explored this option, so if a student attends a college that pays, they could get a very sweet reward in addition to good grades.

You may think the days of getting paid to earn good grades ended when mom and dad stopped paying you a few bucks for every A or B you earned. However, now you can find other businesses and colleges willing to pay you for good grades. Sure, these programs won’t give you spending money for the whole semester, but they do offer another way to make some extra bucks, which may mean less you have to take out on student loans.

Related posts:

1. Can College Students Handle Credit?
2. Money Tips for College Students
3. College Money Tip #8: Know What You Owe

April Fools 2010
April Fools 2009

Now that we’re back to normal, let’s tackle my month of March update:

Change: +$914 or +5.45%

Love it! Debts went down, as did my cash-on-hand, but that was alright because most of that went into my retirement account, which grew a little on its own, too. My car actually regained a good chunk of its value (+10%), which certainly helped!

Positive Net Worth Quest

How does this factor into my personal Positive Net Worth by September 2014 challenge? When we checked in last month, I updated the numbers and we saw that I need $932/month to get there. So I missed it, but only by a tad.

Still, I’ll have to work hard to make that happen. March was the last month where “expected windfalls” like tax returns or work bonuses factor in for me. From here on out, it will be an uphill battle. I probably won’t make it most months! But I can try to get close, and hopefully knock it out of the park once in a while to make up for the sluggish months.

Savings Snowball Update

While we’re here, let’s check in with le’ savings snowball! I manage my savings the same way many people manage their debt: with a “snowball plan!” If you are not familiar with snowball plans, they work like this:

You list out all of your debts (or goals, in my case) in a priority order, each with a minimum payment that you have to contribute each month. Then, you take any extra money you have each month, and throw it at the goal on the top of the list, until that goal is entirely eliminated.

Once the top goal is gone, you contribute everything you can into the next goal on the list, and so on and so forth, your monthly payments “snowballing” and growing as you move down the list.

Last time we checked in on my Savings Snowball in October, it looked like this:

Some updates since then to each category:

Emergency Fund

Somewhere along the way, I changed my mind about how much I wanted to keep in my E-fund. I think it had a lot to do with my Positive Net Worth by September 2014 challenge. Extra money sitting in an E-fund savings account doesn’t earn much interest, so it doesn’t really help me with that challenge.

So I dropped the goal back down to $3,000, which dropped it off the list as completed!

Travel

I’ve taken a few trips home to my family in Upstate New York, and also used some funds to see the Cirque du Soleil show “O” while on a business trip to Las Vegas. Work paid for everything else on that trip, but I did lay out the money for the show to have some fun with my coworkers while we were out there (my first trip to Las Vegas!).

I think I might take a big trip sometime in the next year or so (maybe someplace international even, if I get my passport renewed), but until I make real decisions and  plans regarding that, I’ll just leave the funds as they are and contribute the minimum amount. So that keeps it from being the top goal in the snowball.

Weddings

No new weddings attended since the last update, but there’s at least 2 coming up this summer, which I’ve already started buying outfits and gifts for. Somehow, it’s that time of year again already!

Retirement

I hit $5,000 for the year early last year, but then the counter restarted on January 1st! Around the time I did my taxes this year, I made a $1,600 contribution to my 2012 Roth IRA, since that option was still open to me. (You can contribute to a previous year’s IRA up until April 15th the next year, assuming you haven’t hit the dollar-amount contribution limit, which I haven’t yet for 2012.)

For my own purposes of contributing $5,000/year to my IRA, I’ll count that $1,600 for 2013, as well as everything that’s been deducted from my paychecks for my 401(k).

New Top Goal…?

The problem now, of course, is that none of my savings goals really stick out as a “top goal” right now – the one that sits at the top of the snowball and gets every extra dollar I can throw at it. The way I see it, there are really two ways I could go:

Weddings vs. Lending Club

The “Weddings” fund is the most promising candidate out of what’s currently in the snowball list. There’s plenty of them every year now, and maybe someday I’ll have to lay out a much bigger chunk of cash to throw one of my own (there are no solid plans for that yet, though, so don’t get excited, Mom). That will require more money than what I’m currently putting in with the minimum payment, so maybe it should spend some time at the top of the snowball.

On the other hand, I’ve been investing a good chunk of money in my Lending Club lender account to help on my Positive Net Worth by September 2014 challenge. So really, the challenge is the goal, and Lending Club is just the specific tool. But since all of my savings accounts count toward the goal, Lending Club is the only concrete account that embodies that specific goal.

I haven’t made up my mind about this yet, so rather than reveal what my Savings Snowball looks like now, I’m opening up this decision for comment – what do you think my top goal should be right now? My Weddings fund, or my Lending Club working-toward-a-positive-net-worth-by-September-2014 fund?

Please leave your thoughts in the comments section below!

Related posts:

1. Net Worth Update: December 2012 – February 2013
2. Net Worth Update: November 2012
3. Net Worth Update: January 2012

You may have noticed my own infrequent posting, as well as my net worth increases that really take away from my own ability to claim that I’m “poorer than you.” Bittersweet, that writing this blog for several years has led me to a place where I no longer can really write it, because the name doesn’t apply anymore.

But enough about me! I’ve brought in the brokest of my broke friends to take over writing duties for me, and thus keep PTY alive. Mortimer has an extensive background in being flat broke, and has all the trademarks of a “poorer than you” millennial:

• A B.S. degree that’s not in a highly-sought-after field (Sociology, in Mortimer’s case)
• More student loans than you can shake a stick at (just north of $60k when he graduated, which beats Stephanie out by $18k!)
• Underemployment (part-time job, no benefits, slightly above minimum wage)
• Unable to afford his own apartment (currently splitting a 1-bedroom with a roommate)
• Car on its last legs (Mortimer calls his “Vera”)
• Savings wiped out by one hospital visit a few years ago

But things are not all bad for Mortimer, so save your pity! First of all, Mortimer is on the road to great things – in agreeing to take over this blog and start writing about his most intimate financial details for public consumption, he’ll be working toward the same successes that I’ve enjoyed over the years.

Mortimer is working on his first blog post – an introduction and his first Net Worth update to share his starting point, so to speak. We’ll publish that as soon as it’s done, and Mortimer will generally take it from there – publishing articles, updates, and starting discussions on here the same way I did in earlier days of PTY.

My own archives will stay on the site, and I’ll even check in now and then to let you know how I’m doing and publish a few tips and frugal tricks, here and there. In fact, I’ll probably be publishing posts here along pretty much the same schedule I have been! You’ll just have lots of good stuff in between my posts from Mortimer to keep you entertained and informed.

Please follow me on Twitter, @stephonee, to keep tabs on any other projects I start in the future!

XOXO, Stephanie

*”Mortimer” is actually a pseudonym, because Mortimer is smarter than Stephanie and doesn’t necessarily want to go around on the internet writing about how broke he is, while using his real name. But he did agree to share a picture of himself – that one above!

Editor’s Note: April Fools! Sorry if you were fooled, but Mortimer is a complete work of fiction. At this time, there’s still just one blogger being Poorer Than You around here!

Related posts:

1. Net Worth Update: March 2010

December: +$832 +3.94%
January: +$1,462 +7.20%
February: +$2,072 +11.00%

That, my friends, is what I call three productive months! I’m not ashamed to say I’m proud of the numbers in this update. Those increases put my net worth up to -$16,771 (yeah, negative sixteen grand).

Positive Net Worth Quest

Back in November, I laid out a plan to raise my net worth into the positive numbers by mid-September, 2014. At that time, I calculated it would take net worth increases at an average of $978/month to reach that goal. How’s that been going?

$4,745 increase over 4 months = $1,186.25/month

Woot! I beat the plan by over $100/month! Which means from this point forward, I only need to hit an average of $932/month in net worth increase over the next 18 months to reach my goal.

These over-achieving months early on are really vital to me. First of all, they give me confidence in the idea that this plan is totally do-able. More importantly, they will help pad any slow months later on, so that I don’t have to play catch-up if I can’t quite maintain this super-charged pace.

So how did I manage that nice growth these past few months? Well, I’m glad you asked!

December

Honestly, it surprised me that there was any increase in this month at all! Between Christmas presents (I’m a gifter. Like, a hello-my-name-is-Stephanie-and-I’m-a-giftaholic level gifter.) and cleaning out everything remained in my charity savings account for my video game marathon fundraiser, I was expecting a net worth decrease for December, actually.

So what saved December?

• I have a roommate now! Sharing the cost of my apartment has freed up some of the money that I was paying in rent to go to net-worth-increasing projects, instead. Even though I still pay the majority of the rent (we split the bill based on our respective income levels), every dollar freed up by sharing the load can be put to more productive use.
• My retirement accounts saw some really healthy growth. $429 in those, and $23 (almost 10%!) gained from having decided to put more investment into my Lending Club account the month before.
• Continued effort on my car loan and student loan repayments. I’m only paying the minimums (because the interest rates are fixed low rates), but still made $335 in progress on all of my debts.

January

The gains in this month were a little easier to understand right off the bat. My retirement funds exploded by more than $1,000 in January – nearly 10%!  Part of that can be attributed to the dividends that my funds paid out, all of which were automatically reinvested into the same funds. All very nice to see – I just hope things keep up (or at least, steady) during these very uncertain times in the market.

Despite some unexpected travel (for a funeral, unfortunately), January rocked it. Not as much as February, though!

February

Tax refunds! Woooooo! Okay, not really something to get that excited about. Honestly, a tax refund is often just referred to as the government repaying its interest-free loan to you. And I actually did everything I could to avoid a big tax refund: adjusted my paycheck withholdings to try to get to that “sweet spot” of a very small tax refund. But, for whatever reason, it didn’t really work and I got a big fat direct deposit in February, anyway (and a small one from the Commonwealth of Virginia, as well).

Retirement funds grew a bit again, my car actually increased a bit in value (giving credence to my friend’s theory that Kelly Blue Book values have seasonality), and everything else continued on its usual path (debts down, assets up).

March Forth*

What’s next? Not much specific, I’m afraid! Aside from some small things (there are two weddings this year that will draw some cash out of my “Weddings” savings fund, for example), I will mostly be focused on packing away that $932/month to hit my net worth goal.

Questions? Comments? There’s a comment section below for that!

*Get it? This blog post was put online on March fourth, which is the only day on the calendar that is a complete sentence (albeit, a misspelled one), and this section is about looking into the future, the month of March specifically. I hope you’re half as amused by this as I am, cause I’m dying over here!

Related posts:

1. Net Worth Update: February 2009
2. Net Worth Update: January 2012
3. Net Worth Update: December 2008

I’ve always been a big proponent of using smart personal finance to be able to do great things in your life (that’s the point, isn’t it?), including donating to charities that fit your view of how to make the world a better place.

Plus, if you have income in the United States, you are eligible to deduct charity donations (to registered 501(c)(3) charities) on your taxes. If you’re planning to donate this year in order to deduct on your upcoming 2012 taxes, you only have a few more days to do it!

So quick, donate now to my charity: water campaign! Or, just sit back and watch the live broadcast and participate in the chat room below – we start broadcasting tonight (December 28th) at 7pm EST and going as long as the donations go. There will be giveaways and prizes, so tune in!

Watch live video from upickvg on www.twitch.tv

Donate here: U-Pick Video Game Marathon for Charity
Like the fundraiser on Facebook!

Related posts:

1. Charity and Personal Finances
2. Charity: Helping Those Poorer Than Me!
3. 20+ Places to Legally Watch and Download Free TV, Movies, and Documentaries

Change: +$379 or +1.76%

Upwards! But not upwards “enough” for my taste. To hit $0 in net worth by September 2012, I need to average $1,000/month in gains. And I came up more than $600 short of that this month – meaning I’ll have to make up that $600 along the way, in addition to hitting $1,000 or so in gains every month going forward.

But of course, I’m just starting out on this new goal, so it doesn’t help to be too hard on myself. I’m still laying the ground work for two years of steady gains.

End of the Year = Charity Time!

I dipped into my Charity savings account in order to donate to Desert Bus, the largest of the charity events that I participate in each year. Desert Bus is actually the reason I started keeping a Charity savings account (with $30/month automatic deposits).

Speaking of charity fundraisers, I’ll be running one in the month of December! You can check out my new charity blog, the fundraiser’s Facebook page, or the direct donation page of the U-Pick Video Game Marathon for Charity for details.

Getting Better Returns

One of the things I’m working on is getting more bang for my buck (aka better returns on my investments). Previously, the best return I could hope to get over a 2 year period was in debt payoff – specifically, my student loans, which all carry 5% interest rates. That rate is actually a tab bit lower if you take into account the tax deduction I get on student loan interest, but that’s negligible enough to ignore.

Those student loans are certainly a good place to start – certainly better than dumping extra cash into my sub-1% savings accounts, anyway. And while I will still be contributing my planned $5,000/year into my retirement accounts, the market is too volatile over just a two year period to consider it a higher yield than my student loans.

Pumping Up my Peer-to-Peer Lending

The option I decided to pursue in November was Lending Club. You may remember my peer-to-peer lending experiment with Lending Club in the past, where I lent out $50 in bonus money, but never put in any money of my own. After getting some encouragement from reading Lazy Man and Money’s update on his own Lending Club experiment, I decided to take the plunge in putting my own cash in. Seeing his net annualized return of 7.63%, and Lending Club’s own statistics on average net annualized return made the decision pretty easy for me.

Is there a chance that some of money I lend out will disappear through default? Of course – I’ve already seen a default on one of the three loans I’ve invested my initial $50 bonus with. It happens. It’s not pretty, but it happens. And by diversifying the loans I invest in (I’m not putting more than $25 into any one loan), I’m mitigating that risk as much as it can be mitigated.

We’ll see how that pans out – at this time, my Lending Club portfolio is now worth $249. I’ll give updates on the return I get periodically on this blog.

Looking Forward at December

I can already see that December will be much like November. More charity donations, and a lot more Christmas presents – it’s not going to be a cheap month. But hopefully I can also find some money to put into more Lending Club loans, after meeting all the savings minimums that I’m working on, as well.

25 months remain until my $0 Net Worth deadline.

Related posts:

1. Net Worth Update: November 2009
2. Net Worth Update: November & December 2007
3. Net Worth Update: November 2008

If anything does change, there will be an update to this post to let you know.

A friend of mine recently recommended ING Direct (soon to be renamed Capital One 360) in a post on her Facebook page. When the question was asked…

“Tell me more about ING. Do you use them? What are the advantages? I was thinking about switching from our BofA…”

Fingers were pointed at me for an answer. This happens to me a lot.

After I gave my detailed response, another friend popped in to say “Uh oh… You’ve unleashed the financial beast!” Rawr! Financial Beast Stephonee is here to smash fees and helpfully describe her favorite bank accounts! RAWR!

For your benefit, Financial Beast Stephonee presents a cleaned-up and better-formatted repost of my answer on Facebook:

Me: “Are we talking about their checking or their savings accounts here, specifically?”

Reply: “Either or”

Well then!

ING is different from most banks…

ING Direct in General

The lack of a physical brick-and-mortar presence might be bothersome to some people, but I’ve never felt like I needed it. Also, that’s the downside to any high-yield online-only account, so it’s not really a surprise – it’s just the way these types of accounts work.

They do make up for their lack of physical presence by having the best customer service anywhere. Not just of any bank, but anywhere. Keep in mind that I say that having worked in customer service, and while having accounts at many, many different banks over the course of this blog.

ING Direct’s Electric Orange Checking

Interest and Fees

They offer interest on the checking account, no minimum. Very, very rare for a checking account. Also the way they handle overdrafts is different – they give you an overdraft line of credit, at a super low interest rate. Which means if you overdraft and then put money into the account soon after, you pay only pennies in overdraft fees.

Moving Money In and Out of the Account

The Electric Orange Checking account has every standard feature I’ve seen in checking accounts nowadays: online bill pay, check deposit via phone app, free debit card, etc. etc..

They also offer Person2Person payments with a checking account, which means you can transfer money to anyone else, via ACH electronic transfer. If it’s to another ING account, the transfer is instant – if it’s to another bank, it takes a couple days. I use the Person2Person payment whenever I can, instead of a check.

One of the really great features they have is online checks: you put all the check details in online, and they create, print, electronically sign and mail the check to your intended recipient (all for free; they don’t even charge you for the postage).

Free ATMs at any AllPoint ATM (which includes most 7Eleven ATMs and a ton of other places). You can buy a checkbook from them if you need one, and a book of checks only costs $5. Buying a checkbook is the only fee I have ever had to pay ING, ever.

Downside?

Check deposit used to be the only downside I could think of, since they don’t have physical banks or their own ATMs for you use. You used to have to rely on direct deposit or transfer from another bank account to get money into the account (or, they do offer the option to physically mail your checks into them, but I never used it).

But I don’t even think that applies as a downside anymore, now that they offer check deposit via the mobile app, and I can just snap 2 pictures of any physical check to get it into my ING checking account.

ING Direct’s Orange Savings Account

You get a higher interest rate than brick-and-mortar banks, but lower than most other online-only high-yield savings account. Many people have skipped over these accounts because of higher rates elsewhere. But you see, there are some things I really like about Orange Savings…

Multiple Accounts for Multiple Goals

They let you open as many savings accounts with them as you wish, and once you have one savings account with them, opening another one take about 10 seconds. I use this feature to partition savings goals into separate accounts, like an “Emergency Fund” account, a “Travel” account, etc. etc.

Transferring money between the accounts (and into and out of an ING checking account) is instant. The only restriction (and this is a federal law designed to prevent money laundering) is that you can only make 6 transfers out of any one savings account per month. Transfers into the savings account are unlimited.

There are no minimums or fees associated with the savings accounts.

Downside?

Pretty much the same as the checking: getting money into the account from outside of ING. The “Check Mate” deposit-by-smartphone app also works with their savings accounts, so it’s actually easier than it used to be.

Bonuses!

This was all brought up in the context of the bonuses ING Direct is currently offering when you open a new account – bonuses that you, too, can take advantage of.

What do you think? Have you used ING Direct at all – and are you as stupid in-love with it as I am, or do you have a different opinion? Is there another bank out there that has won your heart? Tell us in the comments!

Related posts:

1. College Money Tip #3: Bank Better
2. Back to Basics #3: Checking Accounts
3. Back to Basics #2: Savings Accounts

But first, the numbers:

Change: +$818 or +3.66%

Preparing for September 16th, 2014

As I finished up my tally of October’s net worth number, something just clicked. I had a thought: that my net worth is currently hovering around “the highest it has ever been.”

Except that’s not even true. Which is why I had to put “air quotes” around “the highest it has ever been.” Because it’s not the highest my net worth has ever been. The actual highest would have been in high school, when I had money in my pocket (and savings account), and no debts whatsoever.

September 16th, 2004. That’s the date, according to my Experian credit report anyways, when my net worth took its first of many nosedives. When my very first student loan went into effect and suddenly I owed a lot of money to the US Department of Education. For the next four years, my net worth took a tumble every few months as I added on quarterly loan disbursements to fund my Bachelors of Science degree.

(Don’t you just love the fact that Bachelors of Science is abbreviated to BS? I know I giggle every time I think of that!)

It finally, finally ended in November of 2008 when I took out my last student loan, and my loan balances hit their all-time high of $43,667. It was basically all I could talk about in that November 2008 net worth update – I was so excited to finally be at the bottom of the student loan ravine, even though I knew it meant I would have to start the many-years journey up out of that. At least I had hit the bottom, finally.

Amazingly, it’s been four more years now. Since hitting an all-time low net worth of negative $38,901 in September of 2009, things are looking way, way up. I’ve steadily improved my situation to the tune of a $17,385 gain over three years. That’s pretty good progress, but I like more of a challenge.

September 16th, 2014 will be ten years since that first loan, which started my long windy path of debt (and my credit history!). By that date, I’d like to be in the black, as they say – in other words, to have a positive net worth. That’s doesn’t necessarily mean paying off the student loans themselves – after all, at 4.75%-5% interest rates, they’re not the biggest bang I can get for my spare buck. But however I get there, a positive number is the goal.

22 months to squirrel away $21,516. That’s $978 per month. The only way to get there? I have to spend $978 less than whatever I earn each month. That’s it. Simple! Just have to earn more, or spend less (or, most likely, a combination of the two).

Simple, but difficult. As any good challenge should be.

And hey, that magical day, September 16th 2014? It’s 10 days before my 28th birthday. So, I figure nothing will help me deal with the fact that I have been an adult for an entire decade like a positive net worth.

Hopefully.

Related posts:

1. Net Worth Update: September 2012
2. Net Worth Update: October 2008
3. Net Worth Update: October 2009

You list out all of your debts (or goals, in my case) in a priority order, each with a minimum payment that you have to contribute each month. Then, you take any extra money you have each month, and throw it at the goal on the top of the list, until that goal is entirely eliminated.

Once the top goal is gone, you contribute everything you can into the next goal on the list, and so on and so forth, your monthly payments “snowballing” and growing as you move down the list.

Here’s my Savings Snowball, with my progress back in January and now at the middle of October compared side by side:

*Car fund: That’s $175 and a new car, mind you!

Alright, not bad. Definitely some real growth happening – especially that retirement contribution!

The Future of the Future Car Fund

This was a point of debate (with myself) just after I bought my Camry in July. Should I keep contributing to this account? Or should I be putting that money toward the auto loan that I just took out in order to get the Camry?

The math lends itself in favor of paying off the loan: I have a higher interest rate on the loan than the interest rate I earn on the savings account. But the straight interest-rate-for-interest-rate math doesn’t tell the whole story.

The rate on the car loan is only 1.99% – less than what inflation is usually calculated at. And my student loans have comparably much higher interest rates – above 5%. If I have extra cash, it should be going toward paying those down. And of course, if we’re taking all interest rates into account, then we have to take the expected interest rate on my retirement contributions, which is even higher still than 5% student loan interest.

So really, I shouldn’t be saving for a new car, paying off my auto loan, or paying off my student loans at all – extra cash should all go into a retirement account and that’s that. Right?

But if I did that, there’d be no snowball. And there’d be no new cars, no traveling, no charity contributions, no weddings… because a goal that’s more than 40 years off still would be taking precedence based on its interest rate alone, which is just silly.

So I continue to contribute to the new car fund – not because the math supports it (it obviously doesn’t) but because of the simple fact that in 10 years or less, I will be car shopping once again.

Changes to the Snowball

I can’t do an update without doing some tweaking. It’s just my nature. So here goes!

Emergency Fund Goal +$1,817

Even though I’m within $10 of my previous Emergency Fund goal, I’m not stopping now! My rent was just raised, so the previous goal wouldn’t really cover 3 months of living expenses any more. It’s time to bump the goal up to a solid $5,000.

Travel Fund, Minus Space Camp

I’m not as excited about going to Adult Space Camp as I once was. I purposefully missed registering early because I wasn’t so sure anymore. They also seem to have removed the week-long adult program, and are only offering the long-weekend version. So this fund will now be for more non-specific travel, until another opportunity comes up.

Weddings Monthly Payment +$50

The number of weddings I’ve been attending (and traveling for!) has only been increasing. Everybody gettin’ married up in here! That’s why this fund’s “progress” has gone down – I’ve taken more out to attend weddings and buy gifts than I’ve managed to put in!

But I love attending the weddings of my family and friends, so the answer is simply to contribute more each month – that way, I can keep on going.

Retirement Monthly Payment: GONE!

I had to think this one through for a while, but I will hit my goal of $5,000 in contributions this year, without any further contributions. Wait, WHAT? How does that work?

First, I had to define what “contribution” means. I decided a few years ago to measure my progress on this goal by my own contributions to my retirement accounts, not the total account balance. I didn’t want to punish or reward myself for the swings of the stock market.

Secondly, do the contributions I make straight out of my paycheck (and the match from my employer) count as “monthly payment” for the purposes of this snowball? I decided that since they come straight out of my paycheck with no effort on my part, this answer is “no.”

With those definitions in mind, I will hit my $5,000 goal for 2012 in November with just my paycheck deductions. So I’m done for the year! The monthly payment on that goal is suspended until January!

Occasionals – Removed

My “Occasionals” account is where I keep money for regularly occurring (but not monthly) bills, like my annual renters insurance or my semi-annual car insurance. Though I still plan to fully contribute what I need for these bills to this account every month, it’s not really a “snowball” goal. I have no reason to increase it beyond the exact amount required to pay those bills.

Result

With those changes, and a little rearranging on the priority of some goals, the Savings Snowball now looks like this:

A leaner, cleaner snowball plan with refreshed goals! We’ll revisit again in January, when I restart my monthly retirement contributions and reevaluate everything else.

Related posts:

1. Savings Snowball Update: Back in Action
2. Savings Snowball: New Year 2010
3. Net Worth Update: January 2012