Everybody Loves Your Money

I was absolutely thrilled to discover that my credit union now offers online deposits. For the last few years, I’ve really dreaded getting physical checks from people because it meant that I’d have to plan a trip to an ATM or one of my credit union lobbies. Don’t get me wrong, the people at my credit union are top notch, but it’s just such a hassle to go there. I will admit it wasn’t horrible to stop by an ATM but inevitably a line of 10 people would show up behind me as I was licking envelopes and going through the lengthy deposit process.

Well, now I don’t need to worry about it any more. I can now deposit checks from the comfort of my own home. What does it take?

Basically, you just need a scanner and Internet access. That’s about it. You keep the check and your money is available (with some restrictions) immediately. All you do is scan the front and back of the check that you want to deposit, enter in the deposit amount and that’s it!

A company called “Fiserv” is behind many of the credit unions that are now rolling out this service. I’m not sure when the big commercial banks will be on board with this new feature, although I do know that USAA offers online deposits. Does your bank or credit union offer online deposits? If so, let us know who it is!

I think alanis morissette wrote a song called ironic. This probably should have been included. Deborah McDonald was hit and killed by a car in northern Ohio on the same day that she received a lottery check for $5520. While that isn’t a huge amount of money, apparently it was more than she’s used to. After going out for drinks and buying wedding rings for her and her husband, she was walking home from a bar when she was struck and killed. Apparently Deborah won the money in Ohio’s Cash Explosion Double Play.

Talk about good luck followed immediately by bad luck.

If you’ve been reading my blog for any length of time, you know that I’m not a huge fan of banks. I used to use banks exclusively and then I discovered credit unions. Without question I still believe if you have a choice between a good solid credit union and a large national bank, you should choose the credit union. Not everyone feels that way. Some people don’t have any choice but to use a bank, and others, as Beks at Blogging Away Debt notes, like the relationship that they’ve established with their bank.

Anyway, go check out Bek’s point of view on banks and see what she has to say. It’s a great blog and definitely worth your time to check out! She may even invite you to a summer BBQ.

A couple of months ago I was sitting in my living room when a thought occurred to me. What would I lose if someone broke in to my house? Besides the loss of a sense of security, I was mostly concerned with what additional impact the break in would have on us. For the most part, nothing in this house is really very valuable to me. TV’s are replaceable, as are most other things. (I don’t have any valuable family heirlooms or anything like that).

What kept coming up in my head was identity theft which led me to the question: “What is in this house that could lead to identity theft?” I quickly realized that the two big risks were my computer and my file cabinet.

On a recent Saturday afternoon, I decided to tackle the two drawer file cabinet in my home office. I went through each and every piece of paper in both drawers and asked the questions:

-Why do I need this?
-What would happen if I didn’t have it?
-Are our social security numbers on any of the documents and if so, do I need to keep it or can I shred it?

As I went through the files I found a number of items that DID have my social security number on them. Up until a few years ago, every single document that my health insurance company sent me included our social security numbers on them. If the document was over three years old I put it in the “shred” pile, which meant I saved none of the health insurance paperwork because it was upwards of 5 years old.

The only items that I found in there that I needed to keep were tax related and then a few other things like passports, birth certificates etc.. I removed all of these from the standard file cabinet and have put them in a file safe in another location. It’s not completely fool proof but it’s a lot more secure than doing nothing.

My other big concern was our main computer. Since we use this computer to file our taxes it has a number of years worth of tax returns on it. I had a couple choices on how to address this. I could opt to try to move all of the files over to a DVD and then physically protect the DVD or I could opt to use disk encryption technology. With disk encryption, you can encrypt the entire contents of your hard drive so that even if someone steals the computer, they won’t be able to access the data on it.

I decided to go the whole disk encryption route because it seemed like better protection. With the latest version of Windows 7 Ultimate, whole disk encryption is included. They use a program called Bitlocker and it works very well. With Bitlocker you can even encrypt usb drives that you connect. This gives you the ability to backup your files without the concern of someone getting their hands on the portable drive.

Protecting our identity at home turned out to be a lot less hassle than I initially thought it would be. An afternoon of surfing through the files in our file cabinet and an operating system upgrade has us protected much better than we have ever been. Of course, I’m probably more likely to have my identity stolen through the mistakes of others (like my company or someone I do business with) than I am to have it stolen at home but I think it’s good to do everything we can.

Everyone has different financial goals in life. For a long time it was the ambition of many people to have a million dollars by the time they retire. Unfortunately a million dollars isn’t quite what it used to be but it’s still a substantial sum of money.

As I’ve continued to save and invest over the years, I’ve often thought, “hmmm, how much money should I have saved by now?” My target is north of $1 million dollars but it’s still a good frame of reference for me.

I previously asked the question, “What should my net worth be at 30 years old?” It turned out that assuming I was making 9% interest and was not making any further contributions, my net worth needed to be about $62,500 at age 30. Well, using the rule of 72, I can see that at 38 years old, I’d need to have $125,000 set aside by now.

Here are the data points from the previous post:
30: $62,500
38: $125,000
46: $250,000
54: $500,000
62: $1,000,000

It just so happens that I’m 38 years old now and have that figure beat quite significantly. The good news is that I’m also maxing out the 401k contributions, as well as other investment avenues so I can feel somewhat confident that I’ll really beat the $1M mark at age 62 assuming I can earn a solid rate of return (not easy to do these days), and that I don’t experience any major setbacks.

I also may opt to settle for something less than my goal if I stay on track with my current saving and investing. I don’t want to work until I’m 62 years old so we’ll be working hard to pay off our mortgage and avoid all other types of debt so that we have more options to retire earlier than that.

I have always marveled at all the things you can do on the Internet. The creativity that people express is absolutely mind boggling and the fact that the majority of it is free never ceases to amaze me.

The latest thing that I’ve gotten a lot of entertainment from is Facebook. You know it’s probably a site that is near death when 37 year old men are flocking to it, never mind the 60+ year old women. But the fact of the matter is, it’s GREAT!

For absolutely no charge, I have reconnected with a few people from high school and old neighborhoods. I now have a voyeuristic view of well over 200 people that I’ve often wondered about. I can be entertained playing “Mafia Wars” or spend hours looking through old friends profiles or searching for other lost friends and neighbors. The total cost of this is zero.

I also love to save money. I honestly don’t know what I’d do without the Internet when it comes to saving money. By making a large number of stores and people accessible to me, it has driven the prices down on many things I buy, including even my cereal (think: Amazon.com). by using the Internet to check prices, I have saved thousands of dollars.

I even use the Internet to help me lower the price of my Internet service. By checking out competitors to my cable company, I can use that knowledge as leverage to ask for a lower rate.

Could I live without the Internet? Sure. Would I keep it at the expense of many other things? You bet. I’d cancel my cel phones, Netflix, cable TV, Home delivery of milk, or just about any other non-essential service we use.

The Internet is pushing farther and farther in to my life and I’m gaining more and more value from it. I now have the Internet in the palm of my hand with my Iphone. With this I have saved even more money to help offset the cost of the phone and service. Whenever I’m looking at any sort of significant expense in a store I pull out my Iphone and use an application called “Red Laser“. It acts as a barcode scanner and then looks up all the online prices for the item it just scanned. I instantly have upwards of 10+ places to compare prices at. A friend of mine just used the same app to save $40 on a tv mount. He pointed out to the store that he could buy it online and they matched the price right there on the spot! It could have never happened without the Internet.

I’m also saving upwards of $10 a month on postage and checks. I no longer have to mail checks to the companies that I do business with. I save on checks and I save on postage, all because I use the online Billpay service (for free) at my credit union.

Not only am I saving money on the things I buy, but I’m also making money on the Internet. This blog brings in a bit of money, but even more importantly, I make my living over the Internet. I work for a large company and work from home about 95% of the time. I’m saving hundreds of dollars a month on fuel and wear and tear on my vehicle by not having to drive in to an office every day. On top of that, I’m improving my quality of life by not having to spend hours in traffic.

It’s almost a crime that I’m so diligent about calling to get my cable and Internet prices lowered every 6 months. The more I think about it, the more I realize that I’m getting so much value out of having an Internet connection, maybe I should just pay full price! Any chance that’s going to happen? Not likely……

Boston Gal has been profiling various people in her “Money Series” posts for quite awhile now and I’ve been meaning to link over to her category. I love reading about other people’s finances, although lately it seems that it’s more about people’s hardships, which I don’t like nearly as much as reading about people that are thriving. Anyway, she’s got a collection of stories about people and their finances. She keeps an eye out for mainstream media articles and makes sure to highlight them on her blog.

If you haven’t checked out Boston Gal’s site, you really should. It’s also worth pointing out that she’s doing plenty right with her own personal finances and posts her net worth right there on her blog. She has us beat, but not by much. I used to post our net worth on the site as a regular feature but have pulled back a bit on the full disclosure as more and more people in my circle of friends and family have discovered the blog.

Anyway, go check out Boston Gal’s site!

My old blogging friend, MadameX has put up a great post about her income and expenses over the last 7 years. She has done an OUTSTANDING job at managing her finances and has reaped the benefits of that with a very impressive amount of saving each year. All this while living in New York, dealing with all life’s curve balls, buying a home etc etc..

I think my favorite point that she made was that she seemed to do quite well keeping her expenses down in 2005. That’s the same year that she started her blog and she believes that directly contributed to keeping her expenses low. I think she’s right! There’s nothing like keeping yourself accountable by closely watching your spending to set a good example. I’ll confess that this blog has helped me make better financial decisions over the last 5 years, although I haven’t done quite as well keeping spending down this past year. I’ll chalk that up to emotional (stress) spending, which I’m doing my best to address.

Anyway, it’s a great read and really very interesting. Go check it out!

I’ve been using Mint.com for over a year now and it seems like a good time to walk through the features and offer up my “likes” and “dislikes”.

Let me start out by saying that there is no question I like this application. It’s clean, it works and it’s causing us to watch our finances closer than we ever have before. Why? Well, let’s look at some of the features:

The Overview Tab
My favorite feature on Mint.com is the page that loads when you log in. They call it the Overview screen. I call it my financial dashboard. On one page I have a quick view of all my account summaries, my budget and what has been spent against it for the month, alerts that highlight any potential problems and major financial changes, my portfolio “movers and shakers”, a quick view of my assets and my “trends”. I watch my trends data very closely because it shows me my total income and my total expenses. In just one quick view I can see if we are spending too much for the month, or are on track. They have a nice bar chart that clearly shows whether you are spending more than you are bringing in and exactly how much.

The Transaction Tab
I spend a lot of time on the transaction tab as well. On this page you can see the details of every electronic expenditure and every electronic deposit to your accounts. You can also categorize each expense so that it drops in to each of the budget items you are tracking. I liken it to your checking account register on steroids. This transaction tab is a consolidation of all of your accounts. As an example, I have Paypal, and my credit union accounts all feeding in to this screen.

The Planning Tab
This is where you set up your budget that shows up on the Overview tab. Here you can also see how your particular expense stacks up against other people across the country.

The Trends Tab
Mint has built some very nice graphical charts. The Trends tab is no exception. They split all of your expenditures, income, net income, assets, debts and net worth in to a series of charts so that you can visually see how you are doing. Some things are displayed as bar charts, such as your spending over time, while others are pie charts such as spending by category. In each case you can click on the graphics to drill back down to the details that make up the numbers. You can view charts for a particular month, a set of months and even an entire year.

The Investment Tab
The Investment tab lets you add your investments and track them in a series of charts etc. You can see how your investments are fairing relative to various indexes and you can also see the price of your shares, number of shares, price paid and market value. I tend not to use this page too much because my main focus of Mint is to track my monthly budget. I’m sure others get a lot more use out of this page.

The Ways to Save Tab
The last tab is one that I’ve spent almost no time on. Mint’s business model is to analyze your income and expenses, look at the types of accounts you have and then estimate the savings you can realize by switching to one of their partners. I am obsessively loyal to the companies that I do business with, such as my local credit union. I also don’t like applying for and maintaining many credit cards so I’m very hesitant to sign up for any of the promotions on Mint. I’m sure others have yielded some of the estimated savings by switching, but I’m not in that camp.

Security
I think the thing that most people would find the hardest to accept about this application is that you have to come to terms with entering your username and passwords for all of your financial institutions. Mint recognizes this concern and has gone to great lengths to alleviate your fears. You can check out their privacy page for detailed information about what types of security they use: http://www.mint.com/privacy/

Other Platforms
One other feature that I also really like is the Iphone integration. Mint has an Iphone/Ipod Touch application that gives you the same kind of visibility right on your Iphone. For security, they give you the ability to set a pin on the Iphone app so it won’t display any data without a valid pin. Hopefully that will protect my privacy in the event of my Iphone being stolen.

Summary
I find Mint.com to be invaluable to our household budget these days. It doesn’t do everything, but what it does do, it does very well. Having one place to instantly have a snapshot of your finances is motivating and provides just the kind of visibility everyone should have on their finances.

Parade has a great article about a family that moved in to their dream home but ultimately sold it, bought a house that was much smaller and half the price, and then donated the difference to charity. One thing that I found interesting about their story is that doing this didn’t hurt their family, rather it actually helped them become closer.

It doesn’t sound like they’ve regretted one bit of their decision. We also live in a house that’s too big for us and I’ve often thought about downsizing. While we’ve thought about it, we haven’t made any moves and certainly haven’t considered the incredible sacrifices that this family made!

Here is the article:
http://www.parade.com/news/2010/01/17-why-we-gave-away-our-home.html