Article: Stop paying for things you don't need

Posted By Paul

This article reminded me of an earlier post on Frugalize called:

Stuff to look at when it's time to cut back

It was an article that suggested ways to avoid spending money when you don't have to. I especially liked their suggestions for avoiding bottled water (which I mention in an earlier post: Save On Drinking Water) and also their suggestion to avoid buying a bunch of ring tones and apps for your cell phone.

The second suggestion reminds me of a friend that bought a new cell phone but wasn't aware that there was a charge involved when it came to downloading ring tones. My friend happily updated their ring tone at least every day and ended up with a giant cell phone bill at the end of the month.

Here is the article in full:
Stop paying for things you don't need

An easy way to recycle electronics

Posted By Paul

If you're like me you have accumulated a fair amount of electronics that are broken beyond repair, but that you just don't feel right tossing in the trash.

Well there is a great service that Office Depot offers where they do tech recycling. The basic idea is that you go to a store and purchase an etech recycling box. They come in small ($5), medium ($10), and large ($15) sizes and you take them home and fill them with allowed electronics and then you bring them back in and Office Depot takes it from there, sending your electronics to various recycling sites.

It's not free, but it's pretty affordable (especially if you share a box with 2 or 3 friends) plus you don't have to drive all over town finding places to take your various recycled items.

Here is the brochure for the program:
Office Depot Tech Recycling

I bought the large box and I am filling it up now.

Article: 5 scams spreading like a virus in recession

Posted By Paul

I read an article today about scams that proliferate during a recession.

Here is a quick summary of the scams they describe:

1. Government grants scam - all this talk of the stimulus makes it easy to think there is free money for the asking. Be wary.

2. Instant credit repair - you pay for services you never get plus leave yourself open to identity theft.

3. Cash for gold - I've seen TV commercials for this. Apparently a common scam is that they send you a check that is much less than the worth of the gold but delay sending it to you so that by the time you get it the 'refund window' has already closed.

4. Mystery shopping scam - you get a check for a lot of money you are asked to cash it, secret shop and then send the cash to an account...later you discover the check is a fake.

5. Social networking scams - someone posing as a loved one on a social networking site needs money for an emergency. You send it and never see them again.

Here is the full article:

5 scams spreading like a virus in recession

It seems like a common thread in scams is the sense of needing to get your money quickly for some reason or another. Always beware when you are asked to do something that involves money with an urgency that keeps you from really seeing what's going on.

Transaction rearranging for overdraft fees.

Posted By Paul

I read an article that stated how many banks will rearrange the order of transactions as a way to charge you overdraft fees.

Here is a hypothetical example. Say you have $50 in your account and then you use your debit card that day:

8:00 AM $10 Breakfast.
noon $25 at the grocery store.
6PM $50 dinner

So you figure that the 6PM transaction should be considered an overdraft, you feel stupid but oh well it's just one time.

Instead the bank decides to process the transactions for the day in this order:

6PM $50 dinner
noon $25 at the grocery store.
8:00 AM $10 Breakfast.

So now you've overdrawn your account twice, causing you to incur the penalty twice.

If this sort of thing happens over the weekend you can end up with multiple overdraft penalties that easily add up to $100 or more.

You may call this unfair, maybe even think it's the banks setting you up so they can steal more fees from your account, but at the time of this posting this practice is perfectly legal.

My take away from all this? This is all just one more reason to avoid living paycheck to paycheck. The scenario I drew out above becomes a non-issue if you just put a buffer in your checking account to avoid this sort of thing.

Back before online banking was common I knew people that would subtract $100 from their balance in their checking account ledger. That way they always had a $100 buffer in their checking account just in case.

That system or the equivalent is still a great thing to do today. If you find yourself in a place where you are constantly worried about overdrawing your account then you are probably living a paycheck-to-paycheck lifestyle. Overdraft fees are just one more symptom of a problem that comes down to how you handle your money. I would suggest in the short term to make a real effort to build up a checking account buffer (this can be as easy as cutting out Starbucks or Netflix for a while and putting the money towards your checking account).

In the long term, you should look over your financial life and see how you can improve it. Maybe one of my really early posts:

My Financial Philosophy

Is a good place to start.