Finance Gets Personal

Balancing the checkbook and paying bills used to be so easy.

Well, maybe not easy, but definitely simple and low-tech.

Every time money came out of your account, there was a check associated with it. You simply recorded the check number, payee and amount in your checkbook register. Then, when it was time to pay bills, you grabbed a calculator, book of stamps, your checkbook and your pile of bills. An hour later, you’re done.

Things are so much more advanced now, but I’m not sure it’s gotten easier. Until I switched computers, I used the desktop version of Quicken. It took me hours to set up all my accounts, and I never did get them synced with my online accounts. I stopped saving debit card receipts because the transaction usually cleared before I had a chance to record it, and my free checks no longer have that little carbon copy. I get some bills online through my bank account, and some still come in the mail. I pay most bills online through my bank account, but some are set up as automatic debits, and others I still have to mail in. In short, there are a million little things that could go wrong and make me think I have more or less money than I actually do.

Now, a used PC has replaced my aging Mac. But I don’t intend to purchase another desktop version of Quicken for PC when there are so many online programs that supposedly do the same thing - for free.

Except, they don’t all do the same thing.

First, I tried Mint.com, which is actually a pretty cool site. The problem I had was that you can’t record upcoming transactions. You can get a good idea of the history of your accounts and where your money is going, but have no idea how much money you’ll have left at the end of your next paycheck. Fail.

So, I then set up all my accounts on Quicken Online. It was working pretty well until I discovered that my repeating transactions only show up once in my register. The next scheduled transaction doesn’t show up until the previous one has cleared the bank. This is definitely a problem, because while I write a check to daycare every week, they often cash them once a month. Luckily, I’ve found a tedious way to work around this - list all my transactions as “one time only.”

From what I’ve seen so far, there is no perfect program (especially a free one!) to balance your checkbook and track all your expenses. One of my Twitter friends has recommended I try his site, BudgetPulse. While I haven’t had a chance yet, you might want to check it out. The only downside I know of is that the site doesn’t sync with your accounts online, but this does give you peace of mind if you have security concerns.

How do you balance your “checkbook” these days?

Photo Credit: MmHnCnChBkMt by Hello Turkey Toe, used under Creative Commons licensing.

If you haven’t heard of Angie’s List, you’re not alone.

Angie’s List is a website where members can access and submit reviews of local companies, contractors and even doctors. I guess you could say it’s kind of like a member-generated Consumer Reports for local services.

While some cities offer free trial memberships as initial reviews are gathered, access to my city’s list is $59 per year or $7.50 per month with a $15 activation fee. I signed up today.

But why pay a fee for advice you can get for free from friends and neighbors?

Well, in my case, we’re looking for a structural engineer to examine some potential foundation problems and don’t know anyone who has had this type of service done. Although a few people are supposed to be getting back to me with leads, I haven’t heard from them yet and am starting to get impatient.

But my $22.50 should pay for itself if the structural engineer I found is as good as the 16 “A” reports he’s received from Angie’s List members. I must say I’m a little disappointed in the sparse reviews in some of the other categories on Angie’s List however. I plan on cancelling before the next month hits my debit card.

Has anyone else used Angie’s List? What are your experiences?

I’ll let you know how the inspection goes.

(This post was included in the Money Hacks Carnival, hosted by Save and Conquer.)

If you’ve listened to the Dave Ramsey Show for any amount of time, you know he is constantly recommending Identity Theft Protection from Zander Insurance. Every time the subject of identity theft comes up, he gives a little spiel about how he’s purchased it for everyone on his team. But why would he recommend this product?

Obviously, Zander Insurance is a paid advertiser of the Dave Ramsey Show. That’s clear from his website (though not always clear on the show). But Dave says he only endorses products he truly believes in, so we’ll assume that he actually feels this product is beneficial to his listeners.

Zander Insurance’s website says the company provides the following services to its Identity Theft Protection Customers:

Protection

• A personalized protection test to see how vulnerable you are to identity theft (Sample question: “Do you use a crosscut paper shredder on credit card bills/offers, bank checks/statements, and other documents with personal information (e.g., Social Security, credit card, and driver’s license numbers) before throwing them away?”)
• Monthly newsletters and scam alerts
• Links to the Opt-Out/Pre-Screen and Do Not Call Registries, and information about how to place a fraud alert (visit AnnualCreditReport.com and click on “Fraud Alert”) or credit freeze (send a written request with a copy of your ID to each of the three credit reporting agencies: Equifax Security Freeze, P.O. Box 105788, Atlanta, Georgia 30348; Experian, P.O. Box 9554, Allen, Texas 75013; TransUnion, Fraud Victim Assistance Department, P.O. Box 6790 Fullerton, CA 92834)

Recovery

• If your identity is stolen, a Personal Recovery Advocate to develop a damage assessment and recovery plan, handle any creditor dispute resolutions, continue to monitor credit bureau activity, work to remove any criminal or civil judgments, and provide information to the FTC and other government agencies

Reimbursement

• Reimbursement for lost income and expenses associated with an identity theft (i.e., legal expenses, long distance fees, overnight charges, etc.), up to $20,000

Here is the statistic Dave uses to justify purchasing a policy: According to the Identity Theft Resource Center’s (ITRC) “Identity Theft: The Aftermath 2006″ study, victims spend an average of 600 hours recovering from this crime.

Wow, how horrible. But I looked up the ITRC’s study, and here’s what the press release about it says:

In The Aftermath 2006, victims spent an average of 97 hours repairing the damage done by identity theft to an existing account used or taken over by the thief.

In cases where a new account was created, respondents in the 2006 study reported an average of 231 hours to clean up the mess. In some cases, respondents used such expressions “eight years and still working on it,” “too many to count” or “endless.”

Hmm, not exactly 600 hours, is it?

Why would Dave tell people trying to get out of debt to make their own meals, fix their own roof, mow their own lawn, etc., but then turn around and tell them to pay a company $72 per year to clean up a mess that hasn’t occurred yet?

Frankly, it’s beyond me.

If you’d like more information about why buying identity theft insurance is a dumb idea, please read Single Ma’s post, Is Identity Theft Insurance Worth the Cost?, at Fabulous Financials.

Now if you’d excuse me, I’ve got to go shred some papers (don’t you just love the way it smells when you grind up eight sheets at a time?).

*I mean, “Protection”
This is not an insurance product.
This is an administrative services contract, with restoration and ancillary reimbursement benefits, issued by Identity Safeguards, Inc. and in connection with Zander Insurance Group providing enrollment and preventative database management services.

I just watched Oprah’s new reality TV show, The Big Give.

I really wanted to like this show. After all, it’s a reality show where the contestants compete to give money away, not to win it. I loved last year’s Oprah show where each audience member was given a $1,000 debit card and told to spend the money on others, documenting the whole thing using hand-held video cameras. So why does The Big Give feel so…icky?

This show treats giving like a competition. The contestants are in it to win it. There’s all the classic Apprentice reality-TV cliches: challenges, randomly chosen teams, judges and eliminations. “Give Big or Go Home.” Is this supposed to be inspiring? Do I need to have a “creative presentation” in order to make a difference in someone’s life? What if I don’t have connections to Jamie Fox, a rich uncle and one of those oh-so-convenient Sprint cell phones? What then, Oprah? Am I a failure in the game of charitable giving?

Sure, there were some tear-jerker moments. But I kind of forgot about all that once the Naked Chef told that guy with the crazy fashion-show-happy partner to “grow some balls.” Get out!

I started listening to the Dave Ramsey Show podcast in July, and have continued to listen to it every day on my way to work. That’s a real compliment to the show, considering I’m a non-church-going liberal and he’s, well…not.

I’ve been working on paying off my debt ever since I began acquiring it in college, but once I’d get one thing paid off, there was another reason I “needed” to borrow money. But listening to Dave Ramsey every day is like AA for overspenders.

Here are Dave Ramsey’s steps to financial freedom, which he refers to as the “Baby Steps:”

1. Build an emergency fund of $1,000.
2. Pay off all your debt except your mortgage, from smallest to largest (regardless of the interest rate). This is called the “debt snowball.” You pay minimums on all your debts except the smallest one, and you attack it. Then, when that one is paid off, take all that money plus the minimum you were already paying and apply to to the second smallest debt. Etc. If you have a second mortgage, you are supposed to include it in this step if it is 50% or less than your total annual income.
3. Build your emergency savings up to 3-6 months of living expenses
4. Invest 15% into retirement, not including any employer matching. You should not be contributing ANYTHING to retirement (even if your employer offers a match) until you reach this step.
5. Save for your children’s college.
6. Pay off your home early. (Steps 5 and 6 can be done at the same time)
7. Invest in mutual funds and real estate, and donate lots of money to charity.

So, I am following this basic plan, but here’s where I’m doing things differently:

• We are contributing 5% of my husband’s income into his employer’s 401k because they give a 5% match. I get about 10% from my employer with no contributions on my part, but I’m putting $50 a month into a ROTH IRA. Dave’s basis for saying you shouldn’t contribute to retirement until you reach baby step 4 is that steps 1-3 shouldn’t take that long if you’re really being hardcore, and the 15% should more than make up for it. However, steps 1-3 will probably take us about 2 1/2 years, and I am not going to give up any free money.

• We started our debt snowball with our car loans, which did not have the smallest balances, but did have the highest interest rate. We’ve paid off about $16,000 in car debt since July. As soon as the remaining $3,000 is paid off, we’ll move to the $3,400 credit card, which has an interest rate of 2.99% fixed. I know it doesn’t make much sense mathematically to pay this off, but I’ve been carrying around this balance for 7 years and am sick of it! Plus it will give us the momentum we need to keep with this once we start paying extra on our $35,000 second mortgage.

• Dave says to tithe 10% of your income to your local church throughout this whole process. Well, we don’t go to church, so we don’t do that. I’d like to give 10% to our favorite charities, but I think it makes more sense to make this commitment after we’re out of debt. So for now, we just give $50 here and $25 there.