MONEY CLIPPED

I’m glad the President is not advocating a direct bailout of mortgages in foreclosure. I would really not like to see any help at all for house flippers and real estate speculators. Many flippers and speculators took out very risky loans to finance their purchases. I don’t have anything against the idea of flipping houses but it’s a gamble and no one else should have to pay for it when the flipper loses. Speculators piss me off. They’re partly responsible for driving the housing market prices to ridiculous levels in some cities and their bad loans plus those sky-high prices are part of the reason we’re in this mess.

I think as whole, America has been living dangerously and assuming Alan Greenspan would come to our rescue if one of our risky bets didn’t pay off. I hope our current Fed Chairman has the backbone to let Americans take their lumps. It’s not a bad thing that we’re a nation of gamblers but we can’t be out there doing it thinking there’ll be no consequences when we fail.

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Consumer Reports released its list of best and worst credit cards based on a survey of 36,000 readers. Thet ratings are based on things like customer service and interest rates. Cards from credit unions made a strong showing in the top five. Also given high ratings were Amex and Nordstrom’s card.

The article on Consumer Reports website explains the ratings and criteria plus provides tips on choosing a card and how to save money.

I once had debt spread out across several cards, all issued from big banks whose names you would definitely know, and they all sucked- high interest and crappy customer service. Once I decided to clean up my credit card situation, I did some research and found the perfect card for me. It’s a decision that has paid off financially and psychologically.

Maybe you should review what cards you have and decide whether they deserve your business.

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When I worked at a bank, there was this little old lady who had been a customer for decades. She recorded checks and debits in her checkbook register twice. First she recorded the actual amount of the transactioon. Then she rounded that number up to the next multiple of $5. So if it was a check for $17.37, she recorded it the second time as $20.00. The column of second amounts was the only one she totaled. This was how she saved extra money, the difference between the actual amount and what she rounded it up to. She said she never balanced her checkbook or looked at her bank statements because she didn’t want to know how much she had. She was afraid if she knew how much she had, she’d be tempted to spend some of it. When she retired and closed her account, her checkbook showed she had about $500. In reality her account was in the five digits!

Now I would never advocate not balancing one’s checkbook or not reviewing one’s bank statements (especially in this era of I.D. fraud) but if someone had a difficult time saving their money, a variation on the little old lady’s method might be useful. Maybe you only round up to the next dollar or maybe you round up to the next multiple of $10. Combining this method with a fixed-amount automatic transfer from checking to savings might be a real help to someone who lacks saving discipline. Saving might not seem as difficult when it’s done in micro amounts and requires little effort.

I believe it’s Bank America that now offers an account where debit card purchases are rounded up to the next dollar and the difference is put into an interest bearing savings account. I don’t know if any other bank is offering something like that or not, but I wouldn’t be surprised if it caught on. It doesn’t offer the same rounding amount flexibility of the DIY method nor does it include checks but it might be the way to go if you lack the confidence to manage the DIY method.

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If you’d like a shot at winning a free personal finance or business book, check out The Great American Book Giveaway. Each week they giveaway new books that the publishers are trying to build word-of-mouth on. All you do is choose one of the four books they’re giving away that week and enter your e-mail address. Usually at least one of the books each week will be a book on investing or business or personal finance. They’re not junk books either, I’ve seen a number of them sitting on the new release shelf at my local library.
I’ve actually one several times, so I know it’s legit. They don’t spam you either. They send an e-mail confirming your entry and each week they send ae-mail reminder about that week’s contest. I have not connection to the site, I’m just letting you know about it since it’s been a source of free business and investing books for me.

If you’re an author, you might want to check it out as a way of promoting your book.

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Money Clipped promises TO:

• Link to other quality finance blogs
• Link you to useful and interesting resources online
• Occassionally review a book related to personal finance
• Post regularlyand not abandon this amonth from now
• Be brutally honest about our opinions
• Ask hard questions about how we handle our money
• Take criticisms in the spirit they are offered
• Give credit where credit is due
• Stay on the topic of money and personal finance

Money Clipped promises NOT TO:

• Link to splogs or moneymaking scams
• Be a link farm
• Not to lie about our level of expertise
• Plagiarize other finance blogs
• Tell you how to get rich
• Deluge you with numbered lists of things (Top 10’s, etc.)
• Go on off-subject rants about religion or pinball or tofu

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No one ever taught me about money. Not my money. Not really. In high-school the showed me how to write a check and balance a check register and then kicked my ass out into the world.

I went to college for management where they taught me all about managing a business’s money. I’ve had jobs where I was trusted with managing resources in excess of half a million dollars and I did it pretty well. But my own finances were a train wreck. I had a job where I advised some millionaires on what to spend their money on. My advice was right and they profited from it. But I didn’t know how much advice I needed on how to use my own money. Hell, I even worked in a bank where I routinely entered the vault. There I was, surrounded by boxes full of cash and had no idea how they got there or what the bank did with them.
I signed student loans with know idea of where I was going.

I signed credit card agreements with no idea of what a credit rating was.

I traded in cars that were worth less than what I owed.

How could someone with a college education be so clueless about money? Simple, no one ever told me. And I know I’m not alone. I know others just as educated, with lot’s of business experience, that are drowning in debt because no one ever taught them about money. In school they teach us accounting and economics and how to manage people and resources but not how to cope with the debt we rack up while in school or how to manage the money we’ll make after we graduate. I’m not blaming others for financial mistakes I have made in the past. But I also don’t blame myself because I didn’t know what I didn’t know.

The day came when I realized I needed to understand money and finances. Really understand. I’ve even gone back to school for a degree in finance. This site, Money Clipped, is an extension of my quest to gain a firmer, literal and metaphorical, grasp on money. I’ll use it to share things I’ve learned or resources I’ve found. I’ll use it to ask questions of myself and how our society deals with money. I’ll get technical, philosophical and rhetorical. Hopefully, in the process of finding some nuggets of monetary knowledge for myself, you’ll find something you can use as well. Welcome to Money Clipped.

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