Here are some links of interest from my feed reader:

• Bible Money Matters comes through with a huge list of budgeting tools, finance software, and iPhone money applications.
• Tough Money Love wonders if Las Vegas deserves a recovery.
• Frugal For Life discusses the secondhand shopping be-attitudes.
• Being Frugal shares her inexpensive photo Christmas card trick.
• All Financial Matters shows how to use the rate function in Excel.
• The Digerati Life has a number of good ways to invest small amounts of money.

Also a big thank-you to these bloggers who’ve participated for the first time this past week at Cash Commons:

• Tough Money Love
• Steadfast Finances
• Damon Day

Have a great weekend!

Got money questions? Ask them at Cash Commons

Banks punish perfect customers

The article is another one on how credit card companies are hitting otherwise conscientious users with annual fees.  The users that are being targeted now are those who pay their bills on time and don’t carry a balance.

These are not perfect customers as far as the bank is concerned.  They are close to the worst, actually: just one step above those customers that declare bankruptcy and discharge their debts.  Convenience users are not very profitable for the credit card companies, and could well cost the companies money.

Who are the best customers?  Customers that pay the minimum balance each month for years and years.  Even better are ones that do so while going over their credit limit and occasionally are slightly late on a payment, triggering more fees.  They’re the profitable ones for the banks.  If it weren’t for the profitable customers, the credit card companies couldn’t afford to hold onto the unprofitable ones.  But what’s happening now is that the CARD Act is clamping down on a number of these very profitable practices, and everyone suffers.

The tone of the article is interesting, in that it suggests that credit card companies exist to make the lives of responsible people easier.  That’s just not true.  They exist to make money.  They don’t make money by letting people like me get three weeks’ use of their money, interest-free, and a rebate to boot.  They tolerate people like me because I might fall on hard times, carry a balance, and then they’ll make money off of me.  They’ve kept me around only because I’ll go elsewhere if they make life too difficult for me.  (Perhaps they already want me to go elsewhere.  I don’t really know.)

If most people are responsible with credit and pay their bills in full, then we’ll mostly be convenience users and will have no choice but to pay fees.   But the convenience users are starting to pay fees now because banks are needing to look for sources of income, as it’s been made clear that credit card users shouldn’t have to face the full consequences of their misdeeds.

Got money questions? Ask them at Cash Commons

Here are this week’s debt reduction posts, with the personal debt reduction stories up top:

• The Good Life on a Budget has paid off a car loan eight months early! Congrats!
• Man vs. Debt has a post from a reader on how they paid off their $15,000 debt by selling their stuff on eBay.
• Digerati Life has a post from a guest contributor that reduced debt with a loan modification.
• Reduce Debt Faster outlines three good ways to lower your credit card payments.  (Hint:  It never hurts to ask!)
• PT Money has an interesting question from a reader with a bit of debt problem that isn’t really her own overspending.
• Damon Day shares a sad story of a woman hit with a debt settlement nightmare.
• Christian Personal Finance gives four ways on how to pay off your mortgage early.
• Bargaineering has a post from Kyle from Suburban Dollar on telling the difference between first- and third-party debt collectors.
• Cash Money Life suggests this question as a wake-up call:  “Do you know how much interest you are paying each month?”
• Clear Choice Credit Cards posts a debt elimination guide.
• Your Money Relationship stirs up the good debt vs. bad debt question, with an anecdote on student loan debt.
• Eliminate the Muda has an interesting take on debt consolidation.

Again, thanks everyone for the on-topic posts.

One last thing:  If you’ve got debt questions, head over to Cash Commons and ask them!  They can even be as specific as this one.

Have a great week!

Got money questions? Ask them at Cash Commons

• Generation X Finance shows how to get your cheap books and movies.
• Free Money Finance tells us what not to aspire to:  being at the bottom of the financial barrel.
• Wise Bread hones the fine art of haggling for a great deal on a used car.
• The Simple Dollar discusses stress and overspending.
• Get Rich Slowly alerts us to the pitfalls of buying in bulk.

And a special thank you to”Dr. Dean” The Millionaire Nurse for participating over at Cash Commons!

Hot hot hot money questions at Cash Commons

They sent me another copy, and looking back, I really wish that I hadn’t responded to that e-mail.

Many of the tips in this book will quickly and efficiently alienate you from your family, your friends, your colleagues, and the businesses you patronize.  Try these tips once, or at most twice, and they will tell you about it, or they may just not want you around anymore.  Try these tips with the wrong person on watch, and you could get fired, or land in jail.

Mr. Villarreal issues this warning in the front of the book:

Honor.  Integrity.  Honesty.  Dignity.  If you live by any of these values, you may as well drop the book right now, because they’re against everything it professes.

Oh boy, is this ever true.  I should have put the book down right there, but I didn’t.  One word that should have been added to that list of nouns is decorum. It’s been a long time since I’ve read anything, or talked with anybody, with as vulgar and self-indulgent a speech pattern, and with such disregard for polite topics of conversation.  (There are only a few people that have permission to talk to me about my wife’s privates, and Mr. Villarreal isn’t among them.)

There are plenty of ways to save money without lying and stealing, but he wastes far too many pages describing these bad ways:

• Saying it’s your birthday (when it isn’t) in order to get free food at a restaurant
• Manufacturing fake price matches for grocery store items
• Taking the five-finger discount with office supplies from work
• Catching a double feature by sneaking into the second movie on the first ticket
• Taking money off the bar that was clearly left for the bartender
• Complaining about a meal when there’s nothing really wrong, just to get reimbursed
• Faking homelessness

And these aren’t lying or stealing but they will make you a problem child very quickly:

• Being just plain cheap with friends on road trips, gift exchanges, potlucks, and splitting the check
• Taking several of every food service supply that isn’t nailed down in a fast-food restaurant
• Actively avoiding tipping of any kind
• Being a repeat problem customer to get free services
• Abusing trial subscriptions and return policies

There were some good tips in this book, but it isn’t worth slogging through pig manure to find a couple of quarters.

Get Wise Bread’s book instead. 100% scoundrel-free, guaranteed.

Ask your burning money questions at Cash Commons

A $10,000 Social Security hit

There was a stock photo of two obviously very depressed seniors right next to that headline.  At first I thought, “Man, the other shoe dropped fast!” but the article revealed the context of the $10,000:  no cost-of-living adjustment for 2010.

Here’s the math on how “no adjustment for inflation next year” translates to “$10,000.”  The average monthly Social Security check is $1,161, according to the article.  The 3% cost-of-living adjustment they won’t get means $35 extra per month, from now on, that they won’t get.

Compound this $35 per month deficit at a 2% annual rate (a savings account-ish rate), for twenty years, and you arrive at a little over $10,000.

Yes, the headline “A $10,000 Social Security hit” is a lot more sensational than something that mentions cost of living.  I may have read through the headline had it been like that.  What the headline did do, though, is call to attention that this isn’t jut a loss for next year, but for every year after that.

One of my colleagues said that if given the choice between a raise and a bonus, you should always go for the raise.  Why?  Because the bonus is one-time, and the raise is ongoing.  The same is true in the other direction:  the $250 that President Obama would like to give to seniors in order to make things hurt less is one-time, but the lack of a raise is ongoing.  It’s compounding in reverse.

This lack of COLA increases the disparity between rising prices and benefits, and accentuates that inflation makes us poorer.  Benefits don’t need to be cut directly to reduce the real cost of the program.

The benefits just need to be held where they are to reduce the real cost.

Got tweet? I do!

If this US Debt Clock is accurate, we’re getting a new person on the unemployment roster every 17 seconds now.

What can you count on in this economy?  I think the only thing that you can absolutely count on in this economy is that you can’t count on anything in this economy. Retirements have been upended by plummeting 401(k)s and IRAs.  Nest eggs have been cracked by crashing home values.  Many people, all of a sudden, won’t be able to retire.

It’s foolish to take anything for granted.  There’s far less within our control than we probably realize, and proposed solutions that aim to make things better will almost certainly just make them worse.

When you think about “preparing for the future,” think instead of “hedging against the future.”  How?

• Cushions, cushions. Bolster that emergency fund to buy time in the face of job loss.  Bolster your food supply in case price controls cause shortages.  (Price controls are another solution that will backfire.  Think gas station lines in the 1970s.)
• Diversify your investments. If you’re heavy in anything (or only have a couple of asset classes) look around some more.  And don’t forget to invest in yourself.
• Diversify your income streams. Only have one income stream?  Start working on another!  And then another.  Your one income stream can go bye-bye at any time.
• Retire into something rather than just retire. It would be great if one of your new income streams involves something you really enjoy, and can do well into the traditional retirement age.
• Take care of your health. I’ve recommitted to this. The less you need health care, the better, because it will be more expensive, and you’ll wait longer to get it.
• Pray.

Got money questions? Ask them at Cash Commons

I work with more than 800 mainline protestant churches in Ohio. I say the credit card issue reflects larger issues in the church: The world is not the same that it was in the 50’s. Churches that do not recognize this will die.

This is seen in changes in music styles, less formal relationships with clergy, more short-term committee assignments and the way organizations of church women operate.

If we are to be relevant in our world and reach out to people, we have to be willing to do so on their terms and this includes finances. By allowing our “customers” to pay their pledges the same way they pay many other expenses, we are saying to them that we recognize we’re not in the 50’s anymore.

What is the good of churches allowing nontraditional giving methods?

1. Fewer people carry cash or check books with them at all times.
2. Regular on-line transfers help even out giving over the year. We know that if you don’t plop it in the pew you won’t put it in the plate, so giving traditionally dips in the summer time, during bad weather and on holiday weekends.
3. Electronic transfer allows greater privacy in giving. If I write a check and put it in the plate, volunteer counters and others may see what I give. But a concise electronic statement would only be seen by the Financial Secretary who would actually record my pledge.
4. Cash and checks have to be handled. They have to be counted, counted again, prepared for deposit and driven to the bank. In an era where volunteer time is harder to come by, let’s let our volunteers focus on doing the work of the kingdom and not tie them up counting money.
5. Cash is also a safety liability. Although this is quite rare, a pile of cash can be misappropriated, and with no cash register receipt to balance against, such a theft would go unnoticed.

I believe there are many positives to churches accepting credit cards, electronic funds transfers and other “modern” ways of conducting business.

Like I said, very well-thought-out comments.  Thank you!

My original post discussed the downside of tithing with a credit card, focusing mainly on the possibility of leading congregants into financial temptation and retarding spiritual growth, while not really discussing directly the advantages that such transactions can bring to churches.  Brian lists out some of these advantages, and I agree that many congregants would appreciate the fact that giving in this way was an option.

Like anything a church does to make itself more relevant, it should do so while holding true to biblical principles. And if I would be in a church that was considering this change, and if the leadership of the church made the decision to accept credit cards after faithful prayer and with the guidance of the Holy Spirit, I really wouldn’t argue.  For example, if the church made training available from Financial Peace University, Crown Ministries, or some other Christian financial ministry, then that would give the opportunity to soften congregants’ hearts in order to examine their giving in the context of this new technology.

If a church doesn’t seek guidance from the Holy Spirit with regard to this, and does it for, perhaps, worldly reasons (”We need more regular giving” or “We need to encourage more giving”) then that’s where problems are more likely to crop up.  That was the context of my original post.

I do disagree on one point within item #4.  I have helped with counting the offering for quite some time, and this is the work of the kingdom just as much as taking a missions trip to Africa.  I’ve learned a lot doing this, and I have no doubt that performing this task has helped me to grow spiritually.  Besides, even if credit cards come to the offering plate, checks and cash won’t go away, and counting up the offering will still need to be done.  From my experience, counting up 50 checks doesn’t take that much more time than counting up 15 checks, because of all the other set-up and tear-down work that’s needed.

Anyway, any more thoughts on this? I’ll be happy to write about it again next week.

Got money questions? Ask them at Cash Commons

Many kinds of expenses can be cut, but the easiest ones to eliminate are ones that you probably won’t miss anyway.  Expenses like the following:

• Seasonal expenses. Are you paying year-round for an activity that you only do in the summer (or winter)?
• Hobby-related expenses for a hobby you’ve lost interest in. Maybe you were gung-ho about scrapbooking, and the stamp of the month delivery just goes in a drawer now because other things have become more important.
• Job-related expenses that aren’t necessary anymore. Say your last job required membership in certain professional societies, or more likely, required a certain kind of dress or appearance.  Or perhaps you’ve moved from up-front sales to more of an office job, and the wardrobe that was necessary for dealing with customers all the time isn’t needed anymore.
• Any luxury that doesn’t deliver like it used to. It could be a monthly massage, a monthly trip to The Melting Pot, premium movie channels, etc.

The Frugal Lawyer saved money on some little things that she admitted weren’t that important, like eyebrow threading, open-toed shoes, and magazine subscriptions.  She observes:

These aren’t huge savings, but the little amounts will add up over time.  Particularly if I am putting the extra money into savings or toward paying off debt.  I’m still looking at my regular spending to find other things that I can trim from the budget.

Little things do add up. What irrelevant expenses can you cut out of your spending?

Update: Thanks to Amateur Asset Allocator for including this post in the Money Hacks Carnival!

Anyway, some links of interest for you:

• Wise Bread serves up a guest post on seventeen resources for improving your small business.
• Five Cent Nickel writer Matt Jabs discusses financial peace through planning.
• Generation X Finance runs down the best deals for the fall season.
• Squawkfox posts on how to save heirloom tomato seeds.  (Note:  I hadn’t heard of heirloom tomatoes until this past week, when I saw my wife cutting up a yellowish tomato.  Now I hear about it again!  Weird.)
• The Simple Dollar discusses ethical frugality and hotel stays.

Three more money bloggers stopped over to participate at Cash Commons.  Thanks for coming by!

• A Gai Shan Life
• Bucksome Boomer
• Money Crush (the blogger formerly known as Blunt Money)

Got money questions?  Got money answers?  Check out what Cash Commons is all about!

Have a great weekend!

Got money questions? Ask them at Cash Commons