To put it simply, banks exist to make money off you.
This post comes from partner blog Blueprint for Financial Prosperity.
Credit unions exist to help their members. Commercial banks exist to enrich their shareholders.
You read that right. That's why credit unions often have better interest rates on both loans and deposits. Commercial banks are businesses. Their sole purpose is to figure out how to make more money from customers (you). Interest rates on accounts are often very low (or nonexistent), and they always try to sell you new products.
- Bing: Find a credit union
Credit unions, by law, have to have membership requirements. Credit unions are often tied to a geographic area or particular group, and as long as you qualify you can join. For instance, the Pentagon Federal Credit Union is one of the better-known credit unions, because of its once mighty CD rates (still competitive if you look at terms of three-plus years), and if you aren't active/retired military or work in defense, you can become eligible by joining the National Military Families Association. There are membership rules, but there are ways around them.
Living on the financial edge is tough, but it also makes you tougher.
Many of you are wondering when the huge wave of economic woes will come crashing down on your head. For some of you, it already has.
I crossed a financial minefield of my own in recent years -- sudden unemployment followed by working for near minimum wage -- and I'm prepared to do it again if I have to. Hopefully what I learned about getting by in difficult times can help you too.
- Bing: Find a new job
My story in brief: I lost a great job I had thought I'd enjoy for life when the ownership of my company changed. After six months of searching, I found a comparable job on the other side of the country. I lost that one too, sold off most of my things, and drove home with my computer, some clothes, a few dishes, keepsakes, and my three dogs.
I've managed to thrive after bottoming out financially.
Not that long ago I had about $130 to my name. I was struggling to balance a handful of part-time jobs with re-entry into college after 30 years away from higher ed.
Going back to school terrified me. But my life was already turned upside down: I'd left a long-term marriage and run through most of my savings to support myself while I dealt with health problems and also to help support my adult daughter, who is disabled. Why not throw college into the mix? As scared as I was, I knew if I didn't do it then I'd never do it.
Fast-forward to now. I managed to get through both logic and algebra, was accepted to the University of Washington on full scholarship, was awarded short-term alimony and was hired part time to write for this blog. I paid off all my divorce debt, started a Roth IRA, and have been able to help family
Doing car repairs yourself pays off -- even for beginners.
Frankly, auto maintenance has always scared me. All I've ever "fixed" are wiper blades, headlights and taillights. The extent of my under-the-hood knowledge is how to check and top off oil, antifreeze and windshield washer fluid. I've never changed my own oil because I didn't want to deal with the waste material.
That's why I recently found myself using an Entertainment Book coupon to get a lube, oil and filter service for $15.88. When I paid, the counter guy said my battery was on its way out. A replacement would retail for about $119.99, but he could get me one for $89.99.
I know less about cars than about doing my own taxes. Still, that seemed a little high. Maybe I could do better on my own -- but that would mean installing it myself.
Man has a new view on life and money.
Here's something you don't see every day: a personal-finance post by an ex-con. "Prison taught me everything I need to know about personal finance" was written by Roger, a 34-year-old former client of "MGL" and posted at MGL's site, MoneyGrubbingLawyer. (Thanks to Financial Reflections for the link.)
- Bing: What's prison life like?
It's an unusual perspective on PF topics. For instance, while we all know that debt causes stress, most of us don't have to worry that "your creditor will settle things with a shiv."
Here are a few more of Roger's observations:
Team sues 125 season ticket holders.
You've lost your job or your business has slipped? Thank your lucky stars if you don't have a Washington Redskins season ticket contract.
The Washington Post reported that the team has sued 125 season ticket holders who wanted out of their contract in the last five years, including a struggling 72-year-old grandmother, no less, who didn't hire a lawyer and now faces a default judgment of $66,364. That includes $5,300 for two premium seats for every year through 2017.
Another fan who was sued cannot work because he's a paranoid schizophrenic. (That suit was later dropped.) Many of the 24 or so defendants interviewed by the Post said they're hurting financially.
Seems heartless, no?
Over the years, small fees add up.
This post comes from J.D. Roth at partner blog Get Rich Slowly.
On the first day of college, I opened my first bank account.
The gym was filled with registration tables, not just for classes and clubs, but also for local businesses wanting to sell themselves to the students. There were even a couple of banks. Because I was getting a small payment from the school to cover living expenses, I needed to open a checking account.
The two banks had very different methods of attracting students. One displayed a sign that said "free checking." The other was handing out Frisbees. My choice was easy. I wanted the Frisbee. (Free checking? How boring.)
Blogger says store atmosphere as a big factor.
How does positive-thinking blogger Steve Olson really feel about Wal-Mart? A positive-thinking tip in one of the most popular posts at his site is "Visit Target frequently and stay out of Wal-Mart."
He's not the only blogger to share his opinion on the big-box titans. Several lately have posted comparisons of the two stores.
Steve, of Steve-Olson.com, back in 2006 listed 10 reasons why he prefers Target, including "I've never seen anyone wearing a NASCAR shirt, purple sweat pants, and pink fluffy slippers at Target." Also, the aisles at Wal-Mart are too narrow, the employees are surly and not helpful, and the customers look depressed. (Read his anecdote about shopping for a lunch box at both stores.)
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