I was browsing the Visa website and was somewhat shocked to find an entire section dedicated to personal finance. They talk about everything from borrowing strategies, where to borrow, the costs of borrowing, and reducing your debt load. Under the latter category, they actually give some great (and simple) advise:

• Don’t add to your debt with additional purchases
• Avoid impulse purchases
• Learn to cook or take your lunch to work   

Curiosity led me to the Mastercard website and sure enough they have a learning center dedicated to personal finance as well. They talk about everything from credit reports, credit scores, managing a budget, assessing debt, and how to pay off debt. They too give some great (and simple) advise:

• Curb spending, and create a plan to pay off debt
• Pay more than the minimum
• Pay off debt with the highest interest rate first

Bankrate has once again come up with another useful calculator. I’ve wondered from time to time if driving the extra 3 miles to the cheaper gas station was really worth it. There’s a gas station less than a mile from my house that’s always more expensive. The car I checked was a 2000 Dodge Intrepid. And here’s what the calculator had to say:

What is the capacity of your cars gas tank?  13
How many miles does your car get per gallon?  24

Gas station 1

How far is it to your primary gas station?  1 mile
What is the price of gas at your primary gas station?  $4.45

Gas station 2

How far is it to your secondary gas station?  3 miles
What is the price of gas at your secondary gas station?  $4.39

Net savings from traveling for gas:  $0.41

So it looks like I AM saving money by driving the extra distance. I fill up once a week which turns into a $21.32 savings per year. It’s not much, but I don’t want to pay any more for gas than I have to. Check out my post on finding cheap gas in your area if you are not sure where to find it. It’s there, you just have to know where to look. 

What about you? Give the calculator a try. Is driving that extra distance saving you any money?

I hate fees. Who doesn’t? When buying stocks, however, it’s nearly impossible to avoid them. But you can keep them to a minimum, and discount brokers are the way to do it. Discount brokers charge very low fees compared to those normally associated with stock brokers. Here’s a rundown of some of the most popular discount brokers:

Sharebuilder
Account Minimum
none
Commissions
$4.00 per trade (automatic investments)
$9.95 per trade (Real-time trades) 

TradeKing
Account Minimum
none (no inactivity fees either)
Commissions
$4.95 per trade

Zecco
Account Minimum
$0 – $2500
Commissions
10 free per month with $2500 account balance, $4.50 per trade otherwise

E*Trade
Account Minimum
$1000
Commissions
$9.99 per trade (30-149 trades per quarter)
$7.99 per trade (150 – 1,499 trades per quarter)
$6.99 per trade (1,500+ trades per quarter)

Scottrade
Account Minimum
$500
Commissions
$7.00 per trade

SogoTrade
Account Minimum
$500
Commissions
$1.50 per trade ($10 monthly subscription fee)
$3.00 per trade (no monthyy subscription fee)

TD Ameritrade
Account Minimum
$1000
Commissions
$9.99 per trade

I have written about my favorite high interest online savings accounts in previous posts, and today my favorite is: EverBank. Although I am a huge fan of online savings accounts with $1 minimums to open, I had to make an exception. EverBank’s Yield Pledge Money Market Account requires a $1500 initial deposit, but is currently paying (as the header states) 4.76% interest for new accounts. This promotional rate is good for 3 months and then the rate switches back to their standard APY (currently 3.51% APY) which is still a great rate! 

EverBank calls it their Yield Pledge account because they “pledge that the yield on your money market account will be within the top 5% of competitive accounts available from leading banks.” If they stay true to this, they will be right up there with FNBO, ING Direct, HSBC Direct, etc. If you think this account is right for you, make sure you keep at least $1500 in your account. If you dip below the $1500 minimum at any time during any month, they hit you with a $4.95 monthly fee.

I don’t know about you but I can’t get my $1500 into EverBank quick enough…

An emergency fund should be a crucial part of everyone’s budget. Why? Because the unexpected tends to happen when we, obviously, least expect it. When an emergency arises, you want the funds to cover it without having to worry about where you are going to get the money. The goal is to avoid creating debt by using a credit card. Your emergency fund at a minimum should be equal to 3 months of your regular living expenses, and you should aim to eventually save up 6 months worth or more.

First step is to set up a high interest savings accountlike ING Direct or FNBO Direct. Then, pick a set amount each month to transfer to your new emergency fund. The more you can afford to set aside, the quicker your emergency fund will be fully funded. Try saving at least $50 or $100 each month. If you can only afford to save $20 per month, do it. Something is always better than nothing.

Next step is to treat this like a bill. Just like you pay the electric company every month, pay a set amount in your emergency fund every month. Commit to your emergency fund like it’s a regular expense and you shouldn’t have any problems hitting your goal in no time. Check out my post on ways to boost your savings for more ideas on reaching your goal quicker.

A close friend of mine recently told me “when i was younger I figured I’d have high income so I foolishly didn’t care about credit.” This comment caught me off guard to say the least. But I felt for him. 7 years ago, the same thoughts were running through my mind. Below I have highlighted a few ways to improve your credit score that I ran across over at Bad Credit Edu:

1. Retrieve a free credit report
Everyone is entitled to 3 free credit reports per year. You can get a free report from each of the 3 major credit reporting agencies at Annual Credit Report. If you view one every 4 months, you can spread out the 3 free credit reports over the year to get the most out of this free service.

2. Make sure positive accounts are listed in your credit report
Credit bureaus will almost always show negative information on your report (if it exists). Make sure your positive accounts are listed also. Some creditors will not show positive information on your account for the fear of a competitor taking you away from them. So make sure all of your accounts with positive information are listed.

3. Piggy back on a positive credit history
If someone adds you as an authorized user on their credit card and they have good credit, your credit score will almost immediately improve. If the person has a negative credit history, the same result can apply, so serve caution. One benefit of piggy backing on someone elses credit is you will not be held liable if the person runs up a huge debt. I’m not saying run up a huge debt and leave the person to be held liable for it. If they are willing to help you, consider it a financial obligation. Respect it.

4. Use credit cards (and apply for a couple if you don’t own any)
The key here is to use the credit cards for normal monthly expenses. Utilities, gas, etc. And most importantly, PAY OFF THE BALANCE IN FULL EVERY MONTH. Paying off your credit cards in full every month will create a track record of on time payments, which in turn will improve your credit score. If you cannot pay your credit card bill in full every month, you will start accumulating interest and debt, and this is what we are trying to avoid. 

5. Apply for a secured card
Secured cards work sort of like a prepaid credit card. You can find secured cards that report back to the credit bureaus and built credit on them. The key is to find one that doesn’t charge fee’s and as low of an annual fee as you can find. The ideal situation would be to find one that becomes unsecured after a certain time period, usually 12 months.

Remember to not apply for too many credit cards at once as this can hurt your credit score. You should start with one credit card (possibly the Chase Freedom card I currently use). Pay all your bills on time and build some credit. If you have too many credit cards to deal with, maybe consolidating them all onto a personal loan is the way to go.

Money Magazine calls AfterThoughts Birthday Insurance the dumbest insurance ever. I have mixed emotions on the service, so I will call it interesting.

AfterThoughts Birthday Insurance was launched by Commemorative Life Insurance Services based out of Laguna Hills, CA. You pay them yearly premiums (roughly $580/year for a 70-year-old non-smoking male). What the service offers is after you pass away, the insurer will mail out a card and a $100 check to your grand kids on their birthdays for the rest of their lives.

I think this service could serve happiness and depression both at the same time once a year for the grand kids. This insurance company is definitely one of a kind. What are your thoughts on this sort of insurance service?

I was reading the new July issue of Money Magazine and ran across an interesting article. The following 5 gas-saving tips are all FALSE. Myths. And I’ve heard them all:

Gas up in the morning.
A gallon of cold gas has more molecules because it is more dense at the lower temperature. Because gas is stored in underground tanks where it is kept cool hiding from the sun, the temperature of the gas that comes out of the pump varies very little regardless of the time of day.

Replace your dirty air filter.
Thanks to modern technology, newer cars have sensors to adjust the fuel-air mixture. This compensates for clogged / dirty air filters. By no means does this mean you should stop changing your air filter (which should be done as standard maintenance), but don’t expect it to boost your gas mileage.

Use premium gasoline.
Some newer cars recommend premium gas but do not require it. Just as newer cars have sensors to adjust the fuel-air mixture, sensors are also triggered to compensate for lower octane gas.

Use additives. 
If there was a gas station that used an additive that claimed to give you better gas mileage and actually worked, everyone I know would be in line waiting to fill up right now. If people sell additives on the internet claiming their MPG miracle really does work, why aren’t gas stations buying these additives truckloads at a time?

Avoid using the air conditioner.
Apparently this myth is true in town. But on highways at higher speeds, driving with windows down creates enough drag on the car to make driving with the air conditioner blowing just as efficient.

Sound like an oxy moron? That’s what I thought. But according to an article I ran across over at Bankrate titled “10 reasons to love a recession”, there are actually pain releivers for the economic pain that is caused during a recession:

1. Family dinners
2. Shorter gas lines
3. Less junk mail
4. More coupons
5. Free fitness
6. Bargain SUVs
7. Business startup opportunities
8. Growth in gardening
9. Musical inspiration
10. New perspectives 

See, a recession is not as bad as it sounds. Right? I hate to say it, but that is dead wrong. Check out an article I ran across over at CEPR (Center for Economic and Policy Research) that highlights the many negative effects of a recession. They talk about even a minor recession having major negative effects on employment, health insurance, inflation, etc. 

So even though there are some (but not many) positive effects of a recession, Jay MacDonald, who wrote the article on Bankrate I mentioned above, put it well:

“We may not be the ideal stewards of the planet yet, but we’re making progress. Temporary setbacks like recessions prompt our collective course corrections.”

I wanted to thanks everyone that has been reading my articles and leaving comments. Since my blog has only been live for a couple weeks, it’s exciting to see feedback already! So here’s where I am calling out the readers.

What topics would you like for me to review and post about?

Over the next few weeks I will be taking ideas from readers and creating articles from them. If there’s anything you would like me to discuss, please feel free to drop me a line with your idea at djmike805@hotmail.com, or feel free to leave a comment here on the site. 

I am open to discussing any topics having to do with credit cards, savings, investing, retirement, the economy, 2 dollar bills, monopoly money , anything. If it has to do with money, I will write about it.

Thanks for your support and I look forward to your ideas!