Online Saving Interest Rates Dropping; Still useful to save?

It seems like with the bad economy, saving interest rates are dropping like a rock. My GMAC Bank account has gone from 3.25% to 2.5%, and I have a hunch it will go lower. Others have gone down to 1.8%, such as EmigrantDirect, which used to offer the highest in the nation. Such a shame that it's gone down so much...

Despite the fall, it's still good to save in these accounts. First of all, you at least get 2.5%, which is better than 0% that many checking accounts offer. Having a separate online savings account also allows you to save your money instead of spending it all because it was in one pot. Online savings accounts also let you link multiple banks to transfer in/out of (imo, GMAC Bank is the easiest to use and add accounts to, and is fast in transferring!), which could let you move money between accounts that do not offer ACH transfers. Just have some money in there, execute a transfer from account #1 to online savings, and then do another transfer to account #2.

long time... and yodlee!

I have to admit, it's been a lot harder to keep up with this than I thought! Manually updating my budget/finances has been harder than I thought, as I didn't want to do the additions manually. However, I was able to find an awesome website that might help me keep up here on a more regular basis. It's called Yodlee.

Pretty much it's a online aggregator for all your bank and investment accounts, as well as a few other types. It can keep track of your budget, cash flow, credit utilization, net worth, and more, all automatically for you. It really helps especially if you carry cards across multiple issuers, and saves you the hassle of having to go log into each site individually.

As for security issues, there may be some concern about having so much info contained in one place. But I trust that their site is secure, due to the fact that Bank of America apparently utilizes this site.

So if you're looking for a way to simplify your financial life, try out the site. You'll love it.

Tip: Keep up with Credit Card Terms & Condition Changes!

A couple of weeks ago I got an e-mail from Wells Fargo noting that the terms of my credit card was going to change by November. Deciding to check it, I at first didn't notice any major change other than the fact that they were going to raise (!) my APR around 1 percent. They also happened to update the fee schedule, which took a little closer look to realize the changes they made. In it, I found out they removed the cap for their Balance Transfer fees.

While this change doesn't affect me all that much, for others, it could make a huge difference. Transferring a balance could cost a couple more hundred dollars than before, especially if you're looking at a huge amount.

So when you get these notices, don't ignore them. At least take a quick look, because if you don't, it could end up costing you a lot of money.

Update - My Current Financial Situation

So I haven't touched this in awhile. Perhaps I'll start trying to blog in this more and try to provide more substantial content. In the meantime, here's where I am:

Assets: $14,101,90
Liabilities: $3,863.42
Net Worth: $10,238.48

However if you look at my liquid accounts only, it's a different picture:
Assets: $2,012.48
Liabilities: $3,863.42
Net Worth: $-1850.94

I spent a lot more on a trip than expected, and when combined with giving a lot in May, I find myself in the red overall. In the next two months though I expected to rectify the situation, and be in positive territory.

Stock: Buy for the long term!

So I bought Google at 704 earlier this month. It went up to 745, and then subsequently crashed to 655. Unsure about the future of the market, I ended up selling at that price.

After that it went down to 625 or so before recovering almost to 700. I have feelings of regrets of not holding it on longer.

But the lesson learned is that money invested into the stock market should be money that you do not expect to see back immediately. My Achilles heel was that the money I used to invest was the balance transfer from my CC used to carry me over while I invested in my employee stock purchase plan. Since that money is something I can't afford to lose much of, I panicked, whereas if it was truly my own money, it would have been easier to work through the ups and downs.

So for now, I will not invest in the stock market. I'll hold off for a year as I build a cash reserve, and then jump in. Until then, I'll have my ESPP, which I'll probably flip for at least the first year.

Balance Transfers: Pay off debt (not just CC debt!)

So I just applied for a new card, the Citi Driver's Edge. I've already had the college version, but I'm getting the normal one just to see how much of a higher credit line I can get. Basically with this card you earn 3% back for gas, groceries, and drugstores. More so, you earn $1.00 for each 100 miles driven, which could essentially translate to free oil changes (5000 miles = $50.00). Of course, you do have to send in forms to take advantage of this, and the money earned isn't straight cash back (you have to use it for car stuff), though you can convert into points to use on the Thank You network.

But I digress. I'm planning to use the 0% APR balance transfer to pay off the student loan that I currently have, and carry me over with the money I'm putting into the Employee Stock Plan, while saving on the interest (which is around 6.80%). Citi allows you to balance transfer to a bank account, and it's easy to boot, which makes for a great way to pay off loans easily, or just to put some extra cash in your pocket. Of course, there are some caveats to keep in mind.

• Pay on time! If you miss even one payment, your interest rate will shoot through the roof.
• Don't think of this as free money. You do have to pay it back sometime.
• Check the fine print. My Driver's Edge card does have a fee on the offer (though with a max). Other cards may or may not.

So use your credit wisely, and you can really benefit. But be careful, because especially in this day and age, it may be really hard to get back on your feet if you mess up.

Employee Stock Purchase Plans

I just discovered a pretty good way to make a good and fast return. Most companies offer stock to employees at a discount (usually 15%). You buy the stock by an automatic deduction from your payroll check (1-10%). At the end of a set period, usually 6 months, the company automatically buys the stock with the discount.

The cool part is that companies may let you sell the stock immediately after you receive it. Therefore, you could be easily making a 10-13% return even if the stock doesn't go up or down in value. The reduction in return is caused by tax, but even so the remaining return makes it worth it. If you can afford it, and your company lets you, you should max out contributions to these employee stock plans. Of course, there will always be some risk (the stock could suddenly drop the day after you buy it), so consider your risk tolerance before you try this.