Festival of Frugality #136 – Summer School Edition
Welcome to the 136th Festival of Frugality – The Summer School Edition, hosted here at Student Scrooge!
If this is your first time visiting Student Scrooge, please take a moment to look around. This blog has been my venue over the past few months for sharing my own experiences and discoveries as I work to continue to put myself on the right path financially and to learn how to best put limited resources to use. While I certainly write from a college student’s perspective, I think much of what I write is applicable to a broader audience. If you like what you see, please consider subscribing via RSS or subscribing via email!
Now to the good stuff — this week we have over sixty entries from frugal bloggers around the internet filled with tips and reflections on making the most of your resources, financial and otherwise. A lot of these entries this week take us “back to school” to relearn the basics — saving at home, on food, and more — and as such, I present this summer-school themed edition.
Enjoy!
The Honor Roll
- Almost Frugal presents a clever compilation of the ABCs of Frugality: 26 Key Frugal Concepts — including catnip, (the) Joanses, soap, and zzzzs, and more.
- Gather Little by Little talks about how to get 100+ MPG. Sound impossible? There’s a catch, of course — that is 100+ MPG on a Scooter.
- Monroe on a Budget tackles the rapidly-approaching back-to-school peer-pressure issue, offering some very helpful tips on how to moderate the financial damage without disappointing your kids.
- Saving Advice reminds us why all those daily habits are worth it – the benefit from activities like brushing teeth, exercising, sleeping may not be apparent, but they can certainly add up to significant cost savings in the long run. Use this as motivation to keep at these healthy habits!
First Period: Philosophy (of Frugality!)
- Art of the Coupon reflects on spending and purchasing items that are not absolutely necessary, and a strategy for trying to control the impact of such purchases.
- Budgets are Sexy asks what your smartest advice about money has been, and presents, ahem, an interesting anecdote as one response.
- The Digerati Life looks at the benefits, both ethical and financial, of downsizing your life.
- The Happy Rock considers the moral implications of the possibility that credit card rewards are funded by the irresponsible, and asks whether that should influence those who use them responsibly.
- Mrs. Nespy’s Frugal World reflects back on how to find the time to get more done, with some sobering suggestions to limit how much you — and your children and family — tackle in order to make time to enjoy life.
- The Shark Investor relays observations and financial wisdom from a recent trip to India, including wisdom on eating, living, and getting around.
Second Period: Home-Ec and Cooking
- Cheap Healthy Good argues against taking frugality too far, arguing for ten foods that you should splurge on. All of them are tasty, but I particularly agree with splurging on cheese.
- Distilled Rose has a great lunch suggestion that costs less than a dollar a day to make — a tasty looking English Muffin.
- The Family Wallet provides ten great tips for reducing cost at the grocery store, including going generic, reducing portions, making the most of what the grocery store offers, and more.
- Green Panda Treehouse has several suggestions for how to save money when eating out. Finding local spots is definitely good advice.
- Home Ec 101 describes how to go about planning for meals and gradually expanding your “menu offerings.” I particularly like the suggestions about listening to feedback and being willing to make mistakes!
- Little House in the Suburbs talks about how to make your own vanilla extract. Definitely frugal, and I didn’t even know this was possible! (Note: Little House in the Suburbs is changing hosts and may be unreachable for 24-48 hours; be sure to check them out when they’re live again!)
- Living Almost Large asks whether it is possible to feed a family of four on less than a $100 a week. I’ll admit that I don’t think I could make it under $100/week.
- Not Made of Money helps with the balance between inexpensive food and healthy food. I’ve always found this difficult, and there are some excellent tips here on how to find affordable healthy food. Cheap and good!
- The Sojourner describes how to make your own frugal and delicious homemade bagels. I eat a lot of bagels, and so this is probably something I should look into — and the directions and pictures here will come in handy.
- Think Your Way to Wealth has an entry on the benefits of BBQing several nights worth of food at the beginning of the week to save on time, money, and effort. I have to admit that this seems like a great idea, but the foresight will be the hardest part for me!
Third Period: Environmental Science (Living Green)
- Blueprint for Financial Success suggests air drying clothes rather than using an electric dryer as a means of saving money and energy. The best part is that, assuming you are not in a rush, it is such a simple and idiot-proof (important for me!) way of drying clothes.
- Early Retirement Extreme praises the freecycle program, and tells of how to make the most of the system while also building and engaging in satisfying and gratifying exchanges. Freecycle has always intrigued me, and ERE’s great story makes me want to try it myself.
- EnviroHumanImpact argues that people should give up the printed newspaper in favor of more technological forms. Not only can this save money, but it can reduce the environmental impact of the daily production of newspapers.
- Frugal Fu has some great tips on creating a waste-free lunch. It’s a pretty major issue, and looking back on my own childhood lunch bags, it is painful to think of how wasteful they were.
- Nature Mom has a great post on how to save money and go green, looking not only at buying “green” and healthy foods and reducing energy use, but also at embracing the concept of “being green.”
- The Q Family Adventure has a list of thirteen ways to be green and save money at the same time. Great tips on saving money around the household — I continue to be amazed that, despite there being several “green” articles this week, they all seem to provide some unique insight.
- To Be Debt Free presents a great list of twenty four ways to save energy, and therefore money, around the house. It is amazing how many ways there are to make your house more “green”, more “efficient”, and more “frugal”!
Fourth Period: Geography (and Travel!)
- All About Orlando discusses how to experience Orlando, and Disney World, on the cheap – something I most definitely did not succeed at last time I visited.
- The FindAirlineCards Travel Blog offers suggestions on how to score an upgrade to first class on vacation for free. Being nice helps!
- Free Money Finance shows how small cities are better at growing your net worth. If only it were easy for me to move now, as I would definitely take this into consideration these days.
- Uncommon Cents suggests that, while you’re on that flight, you be wary of the prices in the SkyMall magazine. Given the airline industry, that doesn’t really surprise me.
- Value For Your Life describes how to visit London on a budget. With the dollar the way it is, every penny saved helps, and these are some excellent tips on having a great, but frugal, trip adventure in London.
- We like Money recounts the steps they took to save money on the planning of their vacation, including booking the hotel and flight as well as taking care of the cats.
Fifth Period: Economics (and Personal Finance)
- Bankaholic warns of three signs that your bank may be in trouble. In these uncertain banking times, it never hurts to be on the lookout for warning signs.
- Bible Money Matters describes how to buy insurance for your family — something that has always confused me some, so I appreciated the post.
- Cash Money Life continues his project of telling us how to become millionaires, this time focusing on spending less than you earn. Tips include analyzing your financial habits, making a budget, finding places to cut back, and more.
- Debt Smackdown looks at several bankruptcy-related questions you should ask should you find yourself considering entering bankruptcy protection.
- The Hustler Money Blog recaps the best 0% APR balance transfer cards out there and has a nice overview of how balance transfers work.
- Not the Jet Set describes their cash envelope system, a pretty effective way to control and monitor where their spending goes each month. This post inspired me to try something similar on a lot of my regular cash expenditures.
- The Personal Financier tackles the age-old question of whether it is better to buy or rent. In addition to a succinct break-down of the benefits and costs on each side, there is also a nice link to a New York Times tool on the subject.
- Slow Down Fast Today! points out the connection between debt and happiness, suggesting such steps for happiness as changing spending habits, eliminating credit cards, forcing yourself to save, and more.
Sixth Period: Auto / Shop
- The Green Motorist asks “When will a hybrid car actually save money?” and comes up with some surprising results on just how far you have to drive to realize savings.
- The Personal Finance Blog by Money Ning looks at how a frugal minded person should approach car expenses, including when to purchase, what to buy, how to finance it, and how to handle maintenance.
- $aving to Invest highlights a rather interesting alternative to the car. While they do say what’s old can be new again, I think I might have to pass on this particular form of transportation.
- Trees Full of Money provides information on how to sell a vehicle with negative equity. Unfortunately, it seems like more and more people are finding themselves in this situation, so these tips could be useful.
Seventh Period: Child Care Education
- Becoming Debt Free questions whether we are doing a good enough job teaching kids financial responsibility, and suggests some ways for doing a better job. Added bonus of individual suggestions for different age groups.
- The Mortgage Blog looks at how to save money raising children when it comes to such issues as impulse buying, pocket money, and more.
After School Chores: Managing the Frugal House
- Chief Family Officer makes the most of her products, taking the frugal step of even cutting open the moisturizer bottle open — which speaks to the frugal lifestyle. Simple but effective, right?
- Fiscal Liberty gives ten ways to survive the rising cost of living by saving money on everyday activities. Some interesting tips covering gas, food, electric, and more.
- Harvesting Dollars presents some interesting gadgets for do-it-yourself laundry out there today. I actually looked at some of these a while ago, and they certainly seem like a fun idea.
- Help My Cash Grow has a guest post with some wonderful tips on decorating on a budget — frugal decorating. Crates, picture frames, mirrors — all wonderful ideas, and I need all the help I can get when it comes to decorating.
- HowToMe makes creating your own custom area rug from carpet remnants sound easy. I’m not normally adventurous when it comes to things like this, but I might have to give this a try.
- No Debt Plan just saved 66% on Shampoo and Conditioner at the drugstore. I particularly liked how this went beyond just the drugstore game to include distance considerations as well.
- PennyJobs.com emphasizes the value of cleaning your house regularly. Maybe this will be the prodding I need to get back on top of this (maybe…)
- Personal Finance Analyst has fun with the fact that (perhaps Future First Lady) Michelle Obama shops at Target, and provides some savings at Target to go along with the story. Something tells me, though, that if Obama gets elected, her days of Target shopping may be over for a while…
- Rather be Shopping tells of the retention offer that Dish Network gave to stay with the cable company — a quick way to lower your cable bill! You’d be surprised what a quick phone call can get you, and its not just limited to cable companies.
- Simply Saving provides an exhaustive list of fifty tips for frugal living. Some are straightforward, but some I hadn’t thought of before. Worth a look!
Extra Credit
- Awesome Forex Alerts has three forex trading strategies to maximize your returns under different situations.
- Beauty and Personal Grooming shows how to use leaves as a beauty aid. This is certainly not my area of expertise, and I was amazed at what could be done with leaves.
- Christian Finance Blog talks about how to make money with Cash Crate. I have heard this mentioned quite a bit lately, and so it was nice to see a succinct overview.
- Counting My Pennies writes about alternate sources of making money, including blogging, secret shopping, and online surveys. I certainly agree that these mini-alternate income streams can be nice supplements to other sources of income.
- JobMob has a series of suggestions on where NOT to spend your job search budget. Job searches can be pretty stressful, and so maximizing your resources can help effectively land a job.
- KCLau’s Money Tips reviews a book on how to manage your money.
- MyDollarPlan poses a series of questions on how much to tip in certain “sticky” situations. Tipping is always a difficult subject, and these cases don’t really seem to have clear cut answers.
- Nickel presents twelve great resources for buying smart, which contains several sites that I use regularly as well as some I had not expected. He’s absolutely right that the internet has changed shopping for the better.
- Save and Conquer talks about the nice surprise on their doorstep recently. It never hurts to be friendly to the neighbors.
- The Simple Wealth retells a recent successful coupon mission at Wal-Mart, with an impressive savings to show for it. It is amazing what can be done with coupons.
And this completes the 136th Festival of Frugality. Next week’s host will be Frugal Homemaker Plus on the 5th of August, and you can learn more about how to submit on the Festival of Furgality home page. Thanks for visiting!
Bookmarked: Carnivals and More – July 26
Carnivals
Emily over at Taking Charge hosted the 162nd Carnival of Personal Finance: Baseball edition, which included my post on the value of online savings accounts.
I also participated in the Festival of Frugality #135 – The Frugal All Over Edition at Antishay Ventenne, which included my post on the Best Buy Reward Zone program.
Thanks to both for hosting!
Bookmarked
- Somehow, Squawkfox came up with 50 Reasons to Go Green with Reusable Shopping Bags, the most obvious and important reasons having to do with the environmental impact. I have been thinking about doing this for some time, and I may just now do it.
- Over at Cheap Healthy Good, I enjoyed “The Booze of Summer: A Quick and Dirty Guide to Lighter, Cheaper Drinks.” I have found myself out at social functions with bars more often lately, and so this is a nice guide to try to stay cheap (and semi-healthy).
- Upgrade: Travel Better recently looked at the potential fall-out of American Airlines’ recent decision to pull its results from the Kayak search engine. Is comparison shopping about to die? I hope not, but this is certainly an ominous sign.
- And in honor of my friend who can’t stand it when I turn our air conditioner on, The Personal Financier takes a look at ten ways to more efficiently and economically use the air conditioner. All very timely reminders!
Have a good weekend everybody!
Chase makes the “Chase Freedom” Card Even Better
I was reviewing my credit card statement for my Chase Freedom card, and I was excited to note that it appears that Chase has made the card even better.
The Chase Freedom Card
One of my favorite credit cards for the last year has been the Chase Freedom Visa Signature Card, which offers 3% back in your top three of fifteen categories, and 1% back on all other purchase. What makes the card even better is that if you wait until you have $200 in rewards, they will throw in an extra $50, effectively raising your potential rate of cash back. With no annual fee, it has quickly become one of my favorite credit cards.
The fifteen categories from which your top three can come from on the Chase Freedom Card are:
- Department Stores
- Gas & Convenience Stores
- Beauty Salons/Spas
- Fast Food
- Video Rentals
- Utilities
- Drugstores
- Telecommunications
- Gym Memberships
- Dry Cleaners
- Grocery Stores
- Cable/Satellite TV
- Movie Theaters
- Pet Supply Stores & Veterinarian Offices
- Local Commuting
Chase makes it even better
Chase recently introduced a new program called “Chase Exclusives” designed to encourage customers to open Chase checking accounts. With the “Chase Exclusives” program, if you have a Chase checking account, you are entitled to the following perks:
- The Chase Debit Card Rewards Program
- Up to 0.25% off a Chase mortgage
- Better rates on Chase Certificates of Deposit
- Up to 1% off private student loans
- Up to 0.50% off Chase home equity loans
- Free retirement review
- Up to 0.50% off Chase auto loans
- Earn triple points in your top five categories on your Chase Freedom Card
It is that last benefit that is most exciting to me. If you have a Chase checking account, then your Chase Freedom Card automatically gives you 3% back on your top five categories. Just as Chase promised, this was automatic — my statement already shows me earning 3% back in my top five categories, which for last month included Drug Stores, Gas & Convenience Stores, Grocery Stores, Local Commuter Transit, and Quick Service Restaurants.
So do you open a Chase Checking Account?
This worked out great for me — I already had a Chase checking account. But if you don’t have one, is it worth it to open one? That’s obviously what Chase is going for with this promotion. Their checking account products are similar to those at most major banks — the most basic checking account requires direct deposit to waive any sort of monthly fee. I think its important to look at your own situation to find out what works for you, but I suspect in many cases it is worth it to open the Chase checking account to complement the Freedom card if you can find a way to waive the monthly fee on the checking account.
New Kid On The Block: VirtualDiscountCard.com
As I have mentioned, I always try to earn cash back when I make a purchase online. On a basic level, it is simple and easy to do; just a few extra clicks before making a purchase. But truly maximizing cash back is usually a challenge, as cash back amounts vary by site — Ebates, FatWallet, etc — and its difficult to tell if you’re getting the best deal.
RewardsDb.com – Find The Best Online Shopping Rewards
That is why I have always been a fan of RewardsDb.com — a site that allows you to enter any online merchant into the search box, and it returns any online rewards that it knows about. For example, enter Barnes and Noble.com, and you’ll learn that (at this time) you can earn 6% back from Live Search, 4% back from Ebates, 1.5% back from FatWallet, 5 miles per $1 from Continental Airlines, 4 ThankYou Rewards points per $1 from Citibank, and many, many more. Its a great resource for comparing and figuring out what works best for you.
A New Cash-Back Site: VirtualDiscountCard.com
I was excited recently, then, when I noticed that the same guy behind RewardsDb.com has started a new cash-back site of his own — VirtualDiscountCard.com. VirtualDiscountCard.com is incredibly simple — no need to sign up for an account; all you need is an email address with a PayPal account. Then, each time you visit VirtualDiscountCard.com, you simply enter your email address and shop, and 45-90 days later, VirtualDiscountCard.com deposits the money into your PayPal account, automatically. They describe it best – “Each cashback reward will be deposited individually to your PayPal account once it is earned – there is no minimum to withdraw, no request to make, no extra hassles.:
VirtualDiscountCard.com seems to offer very competitive cash back rates. One merchant in particular with which they offer cash back caught my attention — StudentUniverse.com, which I have not seen participate in any other cash-back sites. Make a purchase at Student Universe through VirtualDiscountCard, and you’ll get $6.30, which is pretty cool in my opinion.
Why am I so excited about VirtualDiscountCard? It removes many of the annoyances that exist with other cash-back sites. At other cash-back sites, you often have to reach a minimum threshold before you receive payment, and at many sites you have to proactively “cash-out” when you have earned enough money. VirtualDiscountCard bypasses all of that, giving you payment for each individual payment automatically, and at great rates.
I will admit that at first I was concerned about whether or not the site would work given how simple it seems; as a result, I had been holding back my review until I successfully received cash back. Low and behold, right on schedule, I received an email the other day notifying me that I had received a $6.30 PayPal payment from VirtualDiscountCard. Nice.
Quick Deals: Sam’s Club for College Students, and the Entertainment Book
Two quick deals worth mentioning today — the first is a promotion that Sam’s Club is running for college students, and the second is a great price for 2008 Entertainment Books.
Sam’s Club Collegiate Membership
Sam’s Club, the membership-only discount warehouse club, is currently offering a great promotion for college students. While there is no discount on the $40 membership fee, college students get a free $15 gift certificate when they sign up. The Advantage Membership also includes a free second membership card for another person at your address, so you can effectively split the membership with another roommate at no extra cost. Sam’s Club can be a great way to save money on food and other household items, and has proven a lifesaver for me when throwing large events.
To take advantage of this promotion, you need to bring a student id-card and a .edu email address into a Sam’s Club, and they’ll get you all set-up.
Quick Tip: Sam’s Club will only accept MasterCard and Discover Credit Cards. If you want to earn cash-back on Sam’s Club purchases using your credit card, try this: run on over to your Wal-Mart, which should sell Sam’s Club gift certificates that you can purchase with your credit card. Sound like too much trouble? In many markets, Sam’s Club and Wal-Mart are located close together, not surprising given that they are sister companies!
Entertainment Book Discounts
It’s that time of the year! The Entertainment Book — the regional publication with all those coupons — is currently being heavily discounted as most of the coupons are set to expire in November. However, most of the national coupons are good through the end of the year. My favorite national coupon in the book is the coupon good for 5% off one American Airlines itinerary. At $10 for the book, the discount off any American flight over $200 will pay for the book on its own!
The best deal I’ve seen so far comes through FatWallet.com, where if you register and go to their Entertainment Book page, you’ll find a link offering the Entertainment Book for $7.99 + $1.99 shipping, with a $5.50 cash back offer. That leaves the final price under $5 after cash back!
So pick up the 2008 Entertainment Book and score some discount movie tickets and some national travel cocupons!
Reduced-Sugar Cereals — Are They Really Worth It?
I was in the cereal aisle of the grocery store this morning, preparing to replenish my dwindling supply of cereal, when I took a moment to look at the various different versions of my favorite cereals. I have been trying to be more careful with what I eat lately, and so when I saw the Reduced Sugar version of Frosted Flakes, I had to take a second look. Is it worth it?
Difficult to Compare
When trying to figure these things out, I normally would simply search the internet (and that is, of course, what I did when I got home), but since I was already at the grocery store and hadn’t known to research ahead of time, I decided to try to make a quick judgment on the spot.
The first thing I noticed, though, was how difficult it was to compare the two – undeniably the result of a deliberate move on the part of cereal makers. For starters, the two different kinds seem to come in different box sizes, which means different prices. Thankfully, the grocery store provides the unit cost per weight of the cereal, but this is somewhat unreliable of an indicator given that, as a general rule, the price per ounce goes down the larger the box you buy. Furthermore, as an extension of the different sized boxes, the serving sizes on the nutritional facts are slightly different between the two, making it even more difficult to compare the two.
Thankfully, it is nice to know that I’m not crazy. A Washington Post article, Are Reduced-Sugar Cereals Worth It?, from Feb. 23, 2005 had a similar observation:
“The cereals we tested cost more per ounce than their original versions, although that fact is not obvious. Watchful shoppers will notice that original and reduced-sugar cereals come in the same-size boxes, but those boxes can differ in total weight by as much as six ounces. And reduced-sugar cereals don’t seem to go on sale.”
Not Quite A Good Deal
Thankfully, I was eventually able to find a box of the regular and a box of the reduced-sugar that had weights that were close enough to compare:
- Regular 17.5 ounce box of Frosted Flakes: $3.79, or $3.57/pound
- Reduced-Sugar 17 ounce box of Frosted Flakes: $4.29 or $3.92/pound
Obviously, the reduced-sugar cereal costs notably more – but while annoying, that might be acceptable if the health benefits were significant enough. Are they?
Turns out, not really. An Associated Press article, Experts say no advantage to reduced-sugar cereals, that appeared, among other places, in the USA Today on March 12, 2005 noted that reduced-sugar cereals offered:
“… no significant nutritional advantages over their full-sugar counterparts. Nutrition scientists at five universities found that while the new cereals do have less sugar, the calories, carbohydrates, fat, fiber and other nutrients are almost identical to the full-sugar cereals.”
My favorite line from that article, though, has to be:
“Officials at General Mills, Kellogg’s and Post were unable to explain why the new cereals are a better choice… Company officials said they were responding to parents’ demands for products with less sugar and that they aren’t claiming these cereals are any healthier than the originals.”
Unbelievable.
Given that there is no way the reduced-sugar version tastes the same as the original, combined with the increase in price and the marginal, if any, health benefits, I think I am going to continue sticking to the regular version!
Bookmarked – Carnivals and Links – July 18
Carnivals
I participated in two carnivals this week:
- The Budgeting Babe hosted the 161st Carnival of Personal Finance – the “Feeling Renewed” Edition, which included my recent article on saving airline miles from expiration.
- On Financial Success was the host this week for the 134th Festival of Frugality, which included my recent article on maximizing cash back for airfare purchases.
Thanks to both for hosting this week!
From The Blogs
Here is just a small sample of the articles I “starred” in my Google Reader feed list this week:
- Stephanie over at Poorer Than You wrote on whether college students can handle credit. This is a subject I have thought about quite a bit lately, especially as I have had several friends recently ask for my advice. Given the statistics, this area always makes me a bit nervous, but I’ll have more to say on this soon!
- Trent over at The Simple Dollar has Five Tactics for People Who’d Rather Do ANYTHING Than Manage Their Money, which are all excellent tips that almost anyone can take to improve their position without getting too overwhelmed.
- AskMrCreditCard has an excellent list of seven easy steps to improve your credit store. I definitely agree that it is important to get into these habits in order to maintain the best possible credit score.
- And, finally, I include this article from the Consumerist simply because the title literally made me laugh out loud: “Bear Breaks Into Circuit City, Has As Much Luck Locating An Employee As You Do“.
Have a nice weekend!
Revisiting Multi-Ride and Unlimited Passes
The New York Times recently ran an article entitled “In Decade of Unlimited Rides, Metrocard Has Transformed How The City Travels,” which reflected on the tenth anniversary of the introduction of the 30-day unlimited MetroCard in New York City. Its a pretty interesting read, describing the perceived connection between payment methods on New York’s public transit system and its ridership levels.
What makes it interesting from a personal finance perspective, however, is the graph that accompanied the article, which the Consumerist.com picked up yesterday (”Are Unlimited Ride MetroCards A Good Deal? Not For A Lot Of People Who Use Them“). The graph depicts the distribution of usage for holders of the 30-day MetroCard, with an average usage of around seventy rides a month. In order to break even you need to ride about forty-six times. While it is true that most people are saving considerable money with the unlimited cards, about a good fifteen-twenty percent of them seem to be losing money on the unlimited ride cards.
A Nice Reminder
I recently wrote about the often under-appreciated value of the 10-ride pass. The article serves as a nice reminder to make sure that you are truly saving money with multi-ride and unlimited passes.
It is often too easy to fall victim to the idea of buying in bulk– I know I’m certainly guilty of this. The idea of saving 10-15% off a train or bus ticket makes sense only if you’re going to make full use of what you purchase. Worse, buying a ten-ride or unlimited pass might make induce you to travel more than you otherwise would. The best way to figure out what is right for you seems to be to think carefully about how many trips you’re going to make before you think about which pass to buy, and then buy appropriately.
Not The Whole Picture
Of course, the Consumerist.com entry to which I linked doesn’t provide the entire picture. For one thing, its a questionable choice to refer in the title to “a lot of people” losing money — the graph shows that the vast majority are saving money and making the right choice.
But beyond that, there are certainly other legitimate factors to consider, including any discounts or employer-repayment that might reduce the price of an unlimited ride pass, as well as the convenience of not having to mess with the ticket machines. Most interestingly, I learned from the comments on the Consumerist.com article that the New York MTA automatically insures 14 and 30 day unlimited ride cards when purchased with a credit/debit card, so if you lose an unlimited pass and paid with a credit card, you can get your money back, which certainly seems like a very generous and significant benefit.
All-in-all, though, a nice reminder to carefully consider your needs when making such purchases!
Yes, an Online Savings Account is a Good Idea.
When friends ask where they should keep their money, my first response is always to ask where they keep their savings, and if its at a local bank, to suggest that they open an online high-yield savings account. These high-yield savings accounts — like ING Direct, Emigrant Direct, HSBC, and more — have been around for a while, and offer extremely high interest rates. Yet I always seem to have trouble convincing some of my friends that it almost certainly is worth it for them, and I’m not quite sure why.
1. The interest is nothing to scoff at.
One of the most common reactions I get to the idea of opening an online savings account is that it can’t possibly make that much of a difference.
Some basic numbers, current as of this posting. A regular savings account at Bank of America has an APY of something like 0.20%, meaning if you leave $1000 in a savings account, you’d earn $2.00 in interest over the course of one year — not much. Open a bank account at ING Direct, which has an APY of 3.00% right now, and with that $1,000 you would earn $30.00 in interest over the course of a year.
In my opinion, the difference in interest (an extra $28 in this example for every $1,000) seems like its worth it — but maybe that’s just me.
2. Easy: Easy to Set Up, Easy to Maintain
For some reason, another common reaction is that it is too much trouble to set up an online account.
Setting up an online savings account could not be easier. The online application at most banks like Emigrant Direct or ING Direct takes only a few minutes; you’ll supply your contact and identity information, necessary to open any bank account in the United States, and you’ll have to provide an existing checking/savings which will be linked to your new savings account to transfer money. If anything, the only lengthy part of the application process is the waiting – it can take a few days for the bank to mail you a form to sign and to verify that you entered your linked bank account information correctly.
Similarly, these online savings accounts are easy to maintain. With that Bank of America Savings Account, for example, you are charged a monthly fee if your account balance falls below $300. Most of these online savings accounts, however, have no minimum balance. You don’t have to worry about making sure you keep enough money in your savings account; you can keep whatever balance you want.
3. It’s Liquid
Whereas perhaps more lucrative investments might require you to lock-in your money for a fixed amount of time, these online savings accounts provide a nice return while keep your assets (mostly) liquid. Need to get money out of your online savings account and in to your local checking/savings account? With most of these banks, you can complete a free transfer within two or three business days. While it is true that (in most cases) you can’t have “instant access” to your money, with two or three days notice you won’t have any problem getting to it.
Best Buy Rewards Zone: An Interesting Beast
After receiving an email recently, I was reminded of the Best Buy Reward Zone program (more information), and took a minute to take a second look at it. The program is pretty simple — at the most basic level, you earn one point for every dollar you spend at Best Buy, and once you earn 250 points, you get a certificate good for $5 off. This essentially makes Best Buy Reward Zone points worth about $0.02, or, in other words, it offers potentially 2% off in the future.
What is interesting, however, is the direction that Best Buy seems to be taking with the program: heading more and more towards the frequent flyer program model that the Airlines have been perfecting for decades. Three developments seem to indicate this.
One: The Reward Zone Shopping Mall
The email I alluded to earlier was the announcement that Best Buy had launched a Reward Zone Shopping Mall, where instead of earning cash back for your purchases made through the portal, you earn Best Buy Reward Zone points. Airlines have been doing this for a while now, and even some credit card companies offer more “points” through these sorts of portals, but this is the first time I can think of that a company has done something like this for a rewards program this is so closely tied just with itself (credit card points, and even frequent flyer miles, to an extent, can be used with a ride range of services and companies; Reward Zone points are only for Best Buy).
Two: Best Buy “Elite Status”
For frequent business flyers, part of what makes the loyalty game so addictive is the “elite status” that airlines offer; fly enough on a major airline, and they will shower you with perks like double miles on flights, first-class check in, expedited security lines, special seats, waived fees, free drinks, and more. Best Buy recently introduced its own elite status, “Premier Silver,” where if you spend $2500 in a year, you’ll have access to more points, special offers, expanded customer service, and more.
On some level, I am surprised we haven’t seen more companies (explicitly) offer such an “elite” status program — it makes sense to treat your best customers right. But I think the fact they introduced this system also speaks to the type of customer Best Buy thinks it might have been missing out on or losing.
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