Things You Own End Up Owning You.

The title of this post is one of my favorite quotes from one of my favorite movies – Fight Club. The quote is from Tyler Durden, (and without telling you too much in case you haven’t seen the movie) who is anti-establishment and anti-consumerism…making it one of those movies that every person who feels the same should see just for his quotes alone! (more…)


Test Your Credit IQ By Taking This Quiz.

For those of you looking to see just how much you know about credit, you should take this quiz from Credit Karma. A good credit score can save you thousands of dollars on a loan, but many consumers don’t know what makes up that three digit number or have any idea what’s in their credit report. Take this quiz to see just how smart you really are when it comes to this important aspect of your financial health. (Answers below)

1. What is the average credit card debt?

  • a. $5000
  • b. $7000
  • c. $8000
  • d. $10,000

2. Many consumers can save ­­­­­­­­­­­­­­­________ in a lifetime through better credit management.

  • a. $100,000
  • b. $1 million
  • c. $500,000
  • d. $750,000

3. True or False. Debt to income ratio has no impact on a credit score.

4. What component weighs most on your credit score?

  • a. Length of credit history
  • b. Credit utilization
  • c. Total accounts
  • d. On-time payment History

5. Closing your oldest account may reduce your credit score because it effects:

  • a. Credit Utilization
  • b. Length of credit history
  • c. On-time payment history
  • d. All the above

6. True or False: Using your credit cards regularly is better than not using them at all.

7. You can improve your credit score by

  • a. Closing credit cards you don’t use
  • b. Not using your credit cards
  • c. Reviewing your credit report regularly and correcting any errors
  • d. Not paying your bills on time

8. Do credit inquiries impact your credit score?

  • 1. Yes
  • 2. No
  • 3. It depends

9. In today’s economy, good credit is essential when:

  • 1. Trying to secure a home loan
  • 2. Applying for a job
  • 3. Applying to rent an apartment
  • 4. All of the above

10. True or False. A great credit score is considered anything above 690.


1. C. $8000. The average consumer has $8,000 in credit card debt. Credit cards can be a slippery slope of spending beyond your means if you aren’t careful. Most consumers don’t realize paying the monthly minimum will keep us in debt for dozens of years.

2. B. $1 million – A good credit score qualifies you for better interest rates on home loans, car loans and student loans. Over the course of a lifetime, these interest fees can really add up.

3. True. Length of credit history, credit utilization, total accounts, on-time payment history and credit inquiries are the only components of a credit score. You can learn more about the impact each of these has at www.creditkarma.com/report.

4. D. On-Time payment history. On average, a person with perfect on-time payment history has a credit score over 700. However, make just one late payment and your credit score can drop 50 points.

5. D. All of the above – Credit utilization, length of credit history and on-time payment history are all important components of a credit score. Having a bad grade in one area can have a huge impact on your credit score.

6. True ““ Credit card utilization is defined as the total credit card debt you have divided by the total available credit on your credit cards. High credit card utilization can be a warning sign of credit risk. According to Credit Karma consumers with a 0% credit card utilization had a credit score 73 points lower than consumer who had a credit card utilization of 1-20%.

7. C. Credit reports are rich with data and often have a error or two. If you contact credit reporting agencies and have incorrect information removed, you may improve your score. Avoiding credit entirely means you’ll have no credit history, which will may it harder to get a loan.

8. C. It depends. Hard inquiries pulled by lenders do have an impact on your credit score, but soft inquiries don’t. When you pull your credit score simply for information purposes through your written authorization, it is considered a soft inquiry and has no impact on your actual credit score.

9. D. All of the above. Employers and renters are more apt to check your credit file before offering you a job or a place to live. To get your credit in top shape, it’s essential to maintain a low debt to credit ratio.

10. False. That used to be true prior to the recession. Currently, the average American has a credit score that comes in right around 690, but, even a 690 credit score provides no guarantees when it comes to getting a loan. With the current state of the economic climate, banks are much less likely to even lend to good credit consumers and when they do it’s often at a higher price.


If you missed 0-2 questions, you know credit. You understand the important of being a smart credit use and likely have a high credit score.

If you missed 3-4 questions, you’re doing ok. You likely have an average credit score and understand the importance of paying bills on time.

If you missed more than 5 questions, chances are your credit is in need of improvement and you should start taking steps towards responsible credit use.

So, how did you do?


Comparing My ING Orange Account To Higher-Interest Savings Accounts.

For the last 6.5 years, I have been a very happy customer of ING Direct. I have been keeping my emergency fund, my taxes account, and our “buy a home” savings accounts there and have never had any problems with them…well, except for their interest rate. There was a time in the past when they were paying more than anyone else, but in this economy and these times, their rate has been steadily dropping every few months. It is now down to a paltry 1.50% – and they no longer have the highest interest rate. And while their rate is higher than if you kept your money in a “regular” savings account at your local bank branch, I seem to get a notice from them quite often about it going lower. So now I have been on the lookout for an online savings account that pays more than 1.5%, and I only found two that were higher – HSBC Direct and Ally Bank, who pay 1.55% and 1.85% respectively. While HSBC’s rates are better than ING’s, Ally’s is even better – leading me to think it might be time to switch banks. But first, I needed to compare the banks…


They have been my bank of choice for a very long time, as they have for many, many other people. It is easy to set up an account, transfer money between my checking and savings, and track my earnings whenever I feel like it. There are no fees or account minimums, and they are FDIC insured up to $250,000 per depositor. However…their interest rate is currently only 1.50%, which while higher than the .10% my Bofa savings account offers, it is not the best rate on the market today. However, their customer service has been great and I have never had a problem with them. Want to stick with tried and true? Then you can go ahead and apply for an ING account :

HSBC Direct Online Savings

HSBC might also be a contender for most-popular online bank, as I know many people who have accounts there. They too have no minimum balance requirements and no monthly fees, and they pay slightly more interest than ING does – 1.55%. I am not sure I would move my money just for a .05% rate increase, but if you are just starting out, at least HSBC’s rate is higher than ING’s. Apply for an HSBC Bank account :


Ally Bank is the new face of the old GMAC, but don’t worry – they are FDIC insured up to $250,000 per depositor as well. You can open one of their accounts with $0, they have no minimum balance or account fees (like the others), but there is one big difference – their interest rate is just about a full half-percentage point above ING or HSBC, at 1.85%. Apply for an Ally Bank account :

So, what have I learned? I have learned that all three banks are virtually identical as far as I can tell, except for one thing – their interest rates. My standard bearer, ING, is no longer king of the hill – the new Ally Bank now is. Now I have to make a decision – do I leave all my money at my bank or move it all to Ally? What do you guys think? Anyone have experience with Ally? I guess I keep hoping my bank will wake up and smell the roses about other rates, but it hasn’t happened yet. What are your thoughts on this?


American Recovery & Reinvestment Act Benefits For 2009.

Thanks to my trusty T. Rowe Price monthly newsletter for putting all the information I was wondering about in one place! The 2009 American Recovery & Reinvestment Act, designed and implemented to try to help get America moving forward again, has a bunch of different aspects to it that help out individual taxpayers that you might not know about. (I know I didn’t know the full scope of some of these before I read this in the newsletter!). So without further ado, here are some of the provisions in the American Recovery & Reinvestment Act that could directly affect or benefit you:

For First-Time Home Buyers

First-time home buyers may be eligible for an $8,000 tax credit if the home is purchased before November 30, 2009. (A tax credit comes right off your tax due bill) For individual tax filers you must make less than $75,000 per year and for joint tax filers you must make less than $150,000.

New Vehicle Purchase Tax Deduction

For an automotive purchase price of up to $49,500, state, local, and/or excise taxes may be deductible until December 31, 2009.

Unemployment Benefits Increased And Extended

Paid out benefits have increased by about $25 a week, with a total increase of about $650 over the 26-week benefits period. The first $2,400 in benefits is exempt from federal income taxes. Those filing for unemployment in 2009 may be eligible for an additional 33 weeks of benefits.

COBRA Health Insurance Premiums Partially Subsidized

The Feds will subsidize 65% of COBRA premiums for up to 9 months after you lose your job. Eligibility period is from September 1, 2008 until December 31, 2009. This could come in handy as COBRA payments are usually incredibly high.

Energy-Efficiency Improvements Tax Credit

Through all of 2010, you may be eligible for a tax credit on energy-efficiency upgrades you do to your home. This includes things like new windows and doors, insulation, furnaces, etc.. The credit usually amounts to 30% of the cost up to a maximum of $1,500. Thinking of going solar? Solar panels, hot water heaters, and other alternative energy improvements are eligible for a credit of 30% with no maximum. Now is definitely the time to go green!

College Tuition Tax Credit

The American Opportunity tax credit offers up to $2,500 per year towards college costs in 2009 and 2010. Single tax filers must make less than $80,000 to be eligible; joint filers less than $160,000.

Making Work Pay Tax Credit

This tax credit is equal to 6.2% of earned income, with a maximum credit of $400 for individuals or $800 for married couples. The credit reduces tax withholding from paychecks over the year, or about $13 in additional pay per week. I am all for this way of giving back a little money slowly rather than by sending out checks like last time.


Sunday Money Roundup – Father’s Day 2009 Edition.

Happy Dads Day to all Dads – current, past, present, future, friend and foe!! And to my Dad, wherever you are when you leave this earth, hope you have a great day too! On to the roundup…

Cash Money Life has some great Free Online Money Management Tools

Five Cent Nickel is appealing his property tax assessment…which is something everyone should consider doing if you think it isn’t correct.

Money Ning asks “What is a true necessity?

Gather Little By Little wants to help you save money while traveling.

The Digerati Life explains what your FICO score means to you.

Good Financial Cents has a great post up titled “107 Things That Make Good Financial Cents” that you should definitely check out!

Moolanomy talks about saving $8,535 per year by not having a car. How can you save money on your car expenses?

Consumerism Commentary details the possible increase of the first-time homebuyer tax credit to $15,000 instead of $8,000. To be honest, I wouldn’t mind this at all.

Free From Broke tells all in Confessions Of A Recovering Spendaholic.

Stretchy Dollar details the 10 Millionaire Money Management Secrets You Can Use Too.