Overdraft protection.

The words sound almost comforting–like an extra layer of security around your checking account–or perhaps a safety net to catch any mistake you might make in your account records.

Under certain circumstances, overdraft protection can be those things, but to many bank customers, overdraft protection is an exorbitant expense that just makes overdrafts worse.

Since one of the things you’ll be asked to do any time you open a checking account is whether to have overdraft protection for your account, you need to know how overdraft protection works, and whether it is likely to work for you or against you.

Overdraft protection–how it works

An overdraft occurs when you use more money than you have available in your checking account. If you have overdraft protection, the bank will temporarily make funds available to you to cover the purchase–think of this as a short-term loan. This way, you are able to complete your transaction without having a check bounce or your debit card declined.

By helping you out in this way, overdraft protection can save you from inconvenience and embarrassment. However, there is a hefty cost for this service. According to economic research firm Moebs $ervices, the average overdraft fee is currently $27.50. These fees are charged per overdraft transaction, so if you use your debit card four times while your account is overdrafted, you would incur four overdraft fees.

Trends in overdraft protection

Over the years, overdraft fees have become a major profit center for banks, and average overdraft fees have risen steadily in the past 25 years. However, in 2010, new Federal Reserve guidelines went into effect requiring banks to obtain consent, commonly known as an “opt-in,” from customers participating in overdraft protection programs.

Moebs $ervices estimates that 75 percent of checking account customers have opted into overdraft protection. To help persuade customers to opt in to overdraft programs, banks have gotten a little more competitive about overdraft fees, with the average fee falling from $28 to $27.50 in late 2010. These fees vary greatly from bank to bank, and tend to be much higher at large Wall Street banks.

Overdraft protection strategies

So should you join the majority of checking account customers by opting for overdraft protection? Or do the 25 percent of customers that opted out represent the smart money? The answer really depends on your banking habits, so here are four steps you should take to decide whether you need overdraft protection:

1. First, do the math. Look at your banking history to see how cost-effective overdraft protection is likely to be for you. If you have a $500 checking account that you overdraft once every ten years, at the $27.50 average fee overdraft protection would cost you just over a half a percent a year. However, if you overdraft that account ten times a year, you’d be spending more than half your account on overdraft fees. Protection like that is something you can live without.
2. Link checking to a high interest savings account or other deposits. Some banks will let you link your checking account to a savings account, with balances transferring from saving to checking when needed to avoid overdrafts. This way, you can keep more money in the high interest savings account until it is absolutely needed. Just make sure the cost of balance transfer fees doesn’t negate this benefit.
3. Keep an extra cushion in your checking account. These days, even high yield savings accounts are paying modest interest rates. Therefore, you won’t miss out on much by keeping a little extra in checking to avoid overdrafts. If, after doing this, you find that you still come close to the line regularly, overdraft protection may be a good option.
4. Shop for low overdraft fees. If you decide you have to have overdraft protection, shop around to find the lowest overdraft fees you can, which can mean turning to local banks and credit unions.

There is no universal answer as to whether overdraft protection is a good or bad deal for checking account customers–it really depends on how you use the account. However, given that overdraft protection is most cost-effective for people who rarely need it, the rule of thumb should be: when in doubt, opt out.

Richard Barrington has earned the CFA designation and is a 20-year veteran of the financial industry, including having previously served for over a dozen years as a member of the Executive Committee of Manning & Napier Advisors, Inc. Richard has written extensively on investment and personal finance topics.

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Source URL: Protecting yourself from overdraft protection: 4 steps you should take

Copyright Protected © 2011 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Here’s my annual Valentine’s Day dilemma: If I go with the traditional gifts – chocolates and roses or dinner at a fancy restaurant – will my wife think I’m unimaginative? She loves roses and fine chocolate, but won’t she be somewhat offended that I didn’t put more thought into it?

And then there’s the expense: Roses aren’t cheap, and my wife, who’s watching our household dollar pretty closely these days, may not be able to enjoy their beauty knowing what they cost.

So this year my plan is to do things a little differently. Not only am I going easy on my savings account, but I’m also going to blow her away with how thoughtful and creative I am.

That said, here are some of the options I’m weighing:

• Miniature potted roses: Long-stem roses are pretty ostentatious, but these quarter-sized flowers will not only last longer and continue blooming well past Valentine’s Day, but my wife will be able to plant them in her garden this spring and think of me every time she walks past them.
• A picture of the two of us: I’ve got a few images from a summer camping trip we took, so I’m thinking about having one of those printed in a large 11-by-17 format that I can slip into an inexpensive prebuilt frame. I noticed at Christmas time that the craft shops were putting a lot of their frames on sale, so I’ll probably grab one of those.
• A homemade card: This might the biggest bang for my buck. It will take some time and some thought, but my time – and more than a few of my thoughts – are pretty cheap. I might use Photoshop to paste together images from the past year, or I may make a collage from past snapshots. Either way, the surprise and delight of seeing a homemade card will warm my sweetie’s heart.
• Homemade coupon books: Use your imagination. What does your honey desire, yet might be too embarrassed to come right out and ask for? Well, if you give them a coupon for that thing, they won’t have to ask for it. Get it? I can’t spell it out for you but you can certainly spell it out for them.
• A home-cooked meal: The jury is still out on this one. Some people think cooking dinner for your baby on Valentine’s Day reeks of cheapness. What she’d prefer is dinner at a nice restaurant. But what if the meal you prepared was really, really nice? Like shrimp cocktail, a nice wine, prime rib or poached salmon and berries and fresh cream for dessert? Won’t your baby just melt in your arms over your thoughtfulness and hard work?
• A series of small surprises: Decorate a bunch of empty match boxes or old jewelry boxes with leftover wrapping paper and stick little treats in them. Then hide the boxes around the house in places you know he or she will find them in the days leading up to Valentine’s Day. Mix it up – an exotic chocolate one day, an earring then next, the second earring the following day and so on – and make the final gift something a little more special – such as a necklace that matches the earrings or a gift card for dinner that night.

Let us know what you are doing for Valentine’s Day this year, and remember that keeping your sweetie and your savings account happy can both be priorities this Valentine’s Day.

Jim Sloan is a freelance writer in Reno, Nev.

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Source URL: Frugal ways to be sexy on Valentine’s Day

Copyright Protected © 2011 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Our family loves the holidays, but every year after the tinsel and pine needles have been vacuumed up, we find ourselves with a couple of small problems: Too much credit card debt and a couple of heart-felt gifts we really don’t want and can’t return.

The answer for us has been pretty simple: eBay. By selling some of our unwanted stuff–sometimes it’s Christmas gifts and sometimes it’s just items we find in the garage when we put the decorations away–we’re able to put a dent in that debt, even when we’ve used zero percent credit cards.

If this sounds like something you’d like to try, here’s a 12-step program to help you use eBay to whittle down that credit card debt:

1. Start small. If you’re new to eBay, begin by selling something that’s easy to price, easy to photograph and easy to ship. This way you can practice setting up an auction, monitoring your sale and making sure you get good feedback from your first buyer right off the bat. This small transaction will also give you an idea about how costs and commissions work on eBay.

2. Sell something new. New goods are easier to price and sell than used goods. If your Aunt Florence gives you linen napkins every year and you’re starting to run out of drawer space, sell them on eBay.

3. Factor in the costs of selling on eBay. It costs between $0.25 and $4.80 to list an item, and then eBay charges a 5 to 8 percent commission on the selling price. Make sure you’ve checked how much it will cost to ship and include that cost in your listing price.

4. Take good photographs of your product. One photo is usually enough, although you can add more for an extra charge or even direct buyers to a website to find more photos of your item.

5. Take your time writing a description. It’s important to write a good, accurate listing that contains the keywords a shopper might use when searching for an item. Headlines should also contain the keyword, and some eBay veterans also include common misspellings of their keywords. Avoid cheesy sales pitches or exclamation points. If you keep getting the same question from buyers, add the answer to your listing.

6. Describe the item in detail and don’t overlook any defects. Offering next-day shipping or money-back guarantees will help separate you from competitors selling similar items. This will also push your item higher up in the “Best Match” search results on eBay, as will high feedback ratings.

7. Price it right. Check previous sales to see how much similar items have sold for. You can do this by searching “completed listings” on the Advanced Search page.

8. Make sure bidders know you are fair and trustworthy. Don’t overcharge for shipping or ask for a mysterious “handling fee,” as these fees can make buyers inclined to shop elsewhere.

9. Time your auction to expire when activity on eBay is high. This can result in a bidding war on your item–something that isn’t likely to occur at 4 a.m. on a Tuesday morning. You can research the best times to sell by visiting on such websites as Terapeak.com and HammerTap.com, which require a subscription.

10. Include your contact information and answer all inquiries quickly. If buyers can get in touch with you, they’ll feel more comfortable bidding on something or paying the price you’re asking. Ship your items as quickly as possible and keep the customer informed about when it went out and when it’s expected to arrive. All of this will help give you a good rating.

11. Don’t get nervous if the bids don’t roll in right away. Most buyers wait until the last few minutes of an auction before making a bid. If you need reassurance, include a “counter” for your auction so you can see how many people view your item.

12. Use PayPal. It’s fast, secure and easy to use.

In no time at all, these tips should help you rid yourself of post holiday clutter while helping you get extra cash to tackle that holiday debt.

Jim Sloan is a free-lance business writer and a higher-education communications specialist. He has worked as a business editor and writer for various newspapers and magazines. He is the author of two books, and his stories have been selected for a number of anthologies. He has a degree in journalism and environmental science from the University of Maine.

Image: Filomena Scalise / FreeDigitalPhotos.net

Source URL: 12 easy steps to use eBay and pay down holiday credit card debt

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Now that you’ve graduated from school, you may find yourself acquiring not only a diploma, but also heaps of debt and a whole new set of responsibilities. Credit card payments, car insurance, utility bills and maybe even student loans that were once covered by your parents are now resting squarely on your shoulders. You have a lot of choices to make and perhaps not a lot of money to make them hastily.

So, if you’ve decided to use a debit card to track most of your spending, you know there is nothing more infuriating than getting hit with an overdraft fee. And now you may be asking yourself, “Should I sign up for overdraft protection?”

Why overdraft protection?

Here’s help to decide if enrolling in overdraft protection is right for you. Overdraft protection may be a good option for you if:

• You have a lot of traffic in your account. If multiple checks or several automatic payments go through your account each month, overdraft protection can provide you with an extra layer of safety to ensure that everything clears your account. Now that you’re on your own or starting over, you may notice that everything seems to be due all at once: high-interest credit card debt, compounded by your student loan payments, utilities, cell phone bill, and rent payments. If you’re feeling unsure about making withdrawals from your account because of payments waiting to clear, protection may be right for you.
• You want to avoid embarrassment when your card is rejected. If the embarrassment of having your card rejected at a restaurant or retail store gives you such intense anxiety that you would avoid it all costs, overdraft protection can be your best friend. It may not be the most rational of deal-breakers, but if, for example, you’re entertaining potential job connections and networking during the week at social functions, having your card rejected when you go to pay for the bill is the last thing you want.

When to say “No”

If you find that these scenarios don’t apply to you may not need overdraft protection. Think about declining overdraft protection if:

• You don’t make a lot of purchases with the account and do not utilize recurring payments. One of your accounts may be for emergencies only, or perhaps you do not face the same financial responsibilities as most investors and taxpayers, even after graduation or beginning a new financial chapter in your life. Signing up for protection might be unnecessary in this case, and the high overdraft fees that banks typically charge could actually do more harm than good for your finances.
• You track your purchases and keep tabs on your account balance frequently. If you check your bank account daily and remember when your automatic withdrawals occur week-to-week or month-to-month, you’ve likely got your finances under tight control, and overdraft protection may do little to help you. Alternatively, if you’re starting fresh in the personal finance world and have decided to use only cash for all transactions, you will know exactly how much of your funds you are leaving at one time. In this case, overdraft protection may be an additional hassle to your already-minimalist lifestyle.

Remember that overdraft protection is not a permanent fix–it’s a temporary pass. If you find that you’re making several overdrafts per month, there’s probably a more serious and fundamental problem with your budgeting skills. In this predicament, think about giving your money management system a makeover with the help of a financially-savvy friend or financial professional.

Keep in mind that each overdraft protection program is different. You will likely have the option to link your checking account to your savings account, and some institutions may give you additional options such as linking to a credit card or home equity line of credit, so consider your options carefully.

Mistakes happen. After graduation you could be between jobs or freelancing to make ends meet. Sometimes a withdrawal may come too early or you’re faced with a sudden emergency, inadvertently slamming your account with fees. Consider what kind of overdraft protection your bank or credit union offers and weigh your financial options. Does the enrollment outweigh the potentially heavy fees?

Priscilla McEver is a freelance proofreader and blogger. She is based in Brooklyn, N.Y.

Source URL: Overdraft protection: when it hurts, when it helps

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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It’s almost that time of year again. I’m not talking about gingerbread houses, cocoa, and caroling; I’m talking about shopping, impulse-buying, digging ourselves into more credit card debt, and raiding our savings accounts.

We undoubtedly lose a bit of sanity, self-control, or both when it comes to holiday spending. For most Americans, the nature of the season already implies we’ll part with our money quicker than Santa can shoot up a chimney. The key, however, is not to spend it out of desperation, impulse shopping, or simply because you don’t have a plan.

Plan spending ahead of time

Your biggest safe-guard against excess or unplanned holiday spending is (are you ready for this?) making a plan.

This means you actually create a budget…and stick to it. Decide how much you’re willing to spend and then decide what you’re going to buy from there. The more items you decide on ahead of time, the better. This saves you from making a decision in the heat of the moment, surrounded by all those shiny, new things, and potentially can keep you from overshooting your budget.

This will take some sleuthing on your part, but the research will pay off and keep money in your pocket. Once your list is made up and in your hand, it’ll be so much easier to avoid those impulse buys.

Work to build up your holiday budget a little each month throughout the year. Using cash you already have will reduce your “spending stress” dramatically and help you stay more committed to working within that allotted amount. Let the plastic sleep snug in your wallet and you won’t be holding your breath for that credit card statement, come January.

Find great shopping deals

With these components in place, you’re prepared to take on the holiday madness of the stores. So the next question is: Where should I shop?

The answer’s simple: Make wise spending decisions. You want to buy a new outfit for the baby? That’s fine. But does it need to be designer, boutique, or made out of some ridiculously expensive fabric? The kid is going to grow out of it in a month. My point is, weigh the importance and the significance of that item. Will they remember or use it three months from now?

Lastly, remember that it never hurts to shop discount. Hit up the dollar store, thrift store, or local outlet as much as possible. They’re a great source for simple, quirky gifts, not to mention all those holiday extras you’ll need, like stocking stuffers, gift wrap, or party decorations.

Holiday shopping can be naughty or nice, depending on how you prepare for it. Create a budget, keep your list close at hand, and make sure your purchases are really worth it. Do this, and you might actually have time to relax and enjoy the holidays.

Jesse Mecham is the founder of “You Need a Budget” (YNAB) ynab.com, a budgeting software that helps you get out of debt, save more money, and stop living paycheck to paycheck. Jesse lives in Utah with his wife, Julie, and their four children.

Source URL: How to Survive the Holidays without Wiping Out Your Savings Account

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Everyone needs a little extra cash sometimes. Whether your car breaks down, your cousin unexpectedly announces wedding plans, or your best suit get splashed with grape juice the day before a job interview, you’re bound to find yourself getting hit with a financial curve ball from time to time.

When that happens, it can be tempting to borrow the money you need. It’s best to avoid any new debt if possible, even when you’re dealing with an emergency.

In some cases this applies especially if you’re dealing with an emergency. If your family has experienced a job loss or a major health problem, there could be long-lasting impacts on your income and living expenses. Now is not the time to destabilize your financial situation even further with a new debt to pay off.

Borrowing money means paying interest and fees on the money you need, and it saddles with you a new monthly expense. Worse, borrowing when you’re already strapped for cash can trap you in a cycle of debt.

Problems with quick cash

Most of the regular sources of quick cash come with built-in problems. Let’s take a quick look at a few:

• Borrowing from your retirement funds. Not only will you pay interest on a 401(k) loan, you’ll lose the opportunity to earn money on that investment during the time you’re repaying the loan. That will cost you big when it comes time to retire. Additionally, many 401(k) loans require you to pay back the full amount all at once if you part ways with your current employer.
• Getting cash advances on credit cards. You do not even want to know how high the interest rates on these are. Taking a cash advance on your credit card is quick and easy, but it should be an absolute last resort. Never do this unless you have a clear plan for how you will pay it off, preferably within the month, and before your next payment is due.
• Taking out payday loans. Like credit cards, but much worse. These businesses essentially exist to trap you in debt: they charge such exorbitant interest rates, that the only way you can pay it off is to bring them your next paycheck, which they’ll also be taking a large cut out of.
• Getting money from relatives and friends. If you must borrow money in a financial emergency, this is probably your best bet. Just be sure you are very, very clear about the terms of the loan. Put it in writing. To make it fair for everyone, plan to repay the money with a reasonable amount of interest.

How to find fast cash

Rather than taking on new debts, your best bet is to find other sources for cash. There are plenty of quick, creative ways to get the money you need.

• Plan ahead. The very best way to have the cash you need in an emergency is to have a well funded emergency fund with ready cash waiting in it. By saving a little in a high-interest savings account each month, you’ll soon have a nice nest egg built up that can help cushion any financial blows your family takes.
• Sell some stuff. Everyone has things they don’t need. You have them in your garage, in your storage areas, cluttering up your spare room or sitting in drawers. The DVDs you haven’t watched in a year, the exercise bike you haven’t touched since grad school, and the business clothes you’ll never wear again can all be liquidated for extra cash. This won’t get you money today, but it could give you cash this week. Depending on what type of emergency you’re facing, selling off some extra possessions can be a fast, easy way to get on top of things.
• Moonlight. For a longer-term cash shortage, consider moonlighting with a side business or second job. Even a few hours a week of working at a side job can give you extra income to save for an upcoming trip or college textbooks for your kid.
• Find a way out of the expense. Often, we don’t need to spend as much money as we think we do. Do you really have to go to that cousin’s wedding? Or would a card suffice? Does that car repair have to happen this week, or can you limp through the next few weeks while you save up the cash to pay for it? Switching to a more frugal mindset will soon have you spending less, even when sudden needs arise.

Staying ahead of the game

Whatever strategy you choose to deal with your cash flow woes, your best bet is to create a well-funded emergency fund so that you can deal with any future emergencies effectively. You’ll want to select a savings account with the highest interest rate, and then set some portion of your paycheck aside each month. Then when your rainy day comes, you’ll be ready.

Sierra Black lives in the Boston area with her family. As a writer, she focuses primarily on parenting, personal finance and green living. She writes regularly for Get Rich Slowly. Her work has appeared in the New York Times, Babble and numerous other publications. You can learn more about her at her personal blog, ChildWild.

Source URL: Get cash quick without getting stuck in debt

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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When it comes to saving money, everyone has their own, tried-and-true tactics. I clip coupons for the grocery store and compare them against my shopping list and against the grocery store sales flyers from my local paper. Maybe you keep your thermostat tightly regulated, doling out paper fans and sweaters to your family as the season’s change. Whatever your personal money saving tips are, I bet there’s a few you might not have thought of that just might save you a bit more each month.

1. Talk is not always cheap. Many people initially get locked into a cell phone contract, and then never look at their plan again except to pay the bill. But every few months, you should evaluate your usage. Are you texting more, and talking less? Have your monthly call minutes gone up due to that new boyfriend who isn’t with the same carrier? Options such as unlimited text messaging, or family share plans can often save you money in the long run.

Your life changes, and so should your cell phone plan. Most carriers today allow you to change your plan at any time during your contract period. However, the catch is that you’ll likely have to start a whole new contract, which extends your time with that carrier, so make sure to find out the details of your plan before switching.

2. Information is power. Most people know that a budget is a good thing, but they don’t want to take the time to set one up. Budget planning software is the answer. US News and World Report recommends a few types, each designed to fit your personal money style.

Budgeting planning can be as simple as using an Excel spreadsheet. Even if you’re not an Excel wiz, you can download templates that allow you to simply fill in the numbers, and it will take care of adding, subtracting, and compiling the data for you.

Maybe you want something a little more comprehensive – something that will let you download your bank and credit card information to the budget? There are software programs, like YNAB (You Need a Budget) and many others, that give you the freedom to put all of your financial information into one document. In programs like this, credit card statements, bank account balances and activity, and any 401(k), or retirement account information can all be tracked in one place.

Online budgeting planners are also available, and some of them are free. Mint, for example, allows you to set and track your financial goals, and you can monitor your progress and finances from any computer. Budgeting isn’t always fun, but seeing a record of where you overspend can be the first step to curbing your spending enthusiasm.

3. Get it together. Bundling your home phone, cable, and Internet often saves money, as companies often cut deals to people who have multiple services. Get your various bills together, total your monthly spending, and start researching bundled plans. The same is true with insurance. Most major insurance companies give 10 percent to 20 percent discounts to customers who purchase car, life, home, and/or health insurance together.

4. Make the call. Credit cards are a great way to play before you pay, but the cost of getting this freedom is interest rates. When was the last time you looked at yours? It might be higher than the rate you started at, and that can cost you a lot of money. One of the simplest things you can do to save some cash each month is call your credit card companies and ask for lower interest rates. Yes, you really can. Whether or not your credit card companies are inclined to lower your rate will depend on many factors including your credit history, your current balance and your payment history.

Unfortunately, the down-turned economy has made credit card companies tighten their belts some too, so it might not be easy to get your interest rate lowered. However, it’s worth the call if you can get your rates dropped by even a few percent. If you can’t get your rates lowered, consider consolidating your debt onto one card that offers zero percent balance transfers. But remember, the zero interest rate is usually for a limited time frame, say six months to a year, so make sure you know what your interest rate will be once that 0 percent interest rate is over.

5. Let the bank save for you. Many banks now offer automatic savings plans that allow you to build your nest egg without even knowing it. These plans generally round-up your daily spending via debit card purchases, and deposit the difference into your savings account. For instance, if you spend $23.56 on your debit card at the store, your total is then rounded up to $24, and $0.44 will be deposited into your savings account. This won’t make your savings account balance monumental overnight, but by the end of the year, you could save hundreds of dollars without even trying.

Saving money is a high priority for most people today, and using a few easy tricks, you could find that the savings really do add up.

Megg Mueller is a journalist with almost two decades of experience. She has worked as a reporter and editor for the Reno Gazette-Journal, as editor of health care and education manuals for Aspen Publishers, a subsidiary of Wolters Kluwer and wrote a weekly column on the hotel industry during her tenure as assistant travel editor for USA TODAY.com. Mueller is the editor of a tourism-based Web site and also serves as a reporter for a weekly business newspaper.

Source URL: 5 sneaky ways to save a little money

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Back in the early to mid-1990s I made my living by sitting in front of computer monitor with green and red glowing pixels that flashed stock and commodity prices. I was an off-the-floor stock and commodity trader, and in my world, green and red meant everything. Green meant I was making money, and red meant I would be drawing out of my savings to pay for monthly expenses.

Fortunately for me, I was given some sage advice from a wealthy mentor of mine who was about 25 years my senior and knew of an obstacle that I was likely to encounter. I still remember his wise words: “Kid, make sure you put money into an account you can draw from when times are lean–and expect some lean times. It’s part of the game.”

Even though I heeded his advice, there was one thing I didn’t account for: the feeling I’d have when trekking to the bank to withdraw those savings. While I had been diligently depositing money in my high yield savings account specifically to be drawn on when needed, the mental anguish of seeing my balance decrease–sometimes month after month–was one of the biggest challenges I had to overcome as a trader.

From Retirement Saving to Retirement Spending: Getting Past the Anxiety

Fast-forward 16 years: now I manage other people’s money for a living. I’m on the phone with a client in his mid-60s who recently retired. He asks me if taking $10,000 out of one of his accounts to purchase a timeshare is going to throw his retirement savings into a flat spin.

I remark that he could buy ten such timeshares without making much of a dent in his financial resources. But thinking back to those down months from my trader days, I quickly add, “I think I understand where your mind is and what you may be feeling. The retirement transition is a little bit like buying an umbrella and then worrying it will get wet when it rains.”

Learning how to develop the retirement spending mindset is a major challenge for many retirees. There’s already a lot of change when you retire: a shift in routine, of people you spend time with on a daily basis, maybe even a new home in a new city.

Add to the mix a wrenching shift in habit from saving for 35 or 40 years (or more) to actually spending down the funds carefully grown in that retirement account–no wonder it’s a jolt. Seeing that balance drop month after month, even if you’ve planned for it, is profoundly unsettling.

Another issue is that many people who enter retirement now have access to the most money in a lump sum that they’ve ever had in their lives. This alone can bring a suite of emotions, from fear and paralysis to greed.

You may have gone over financial variables in retirement planning over and over through the years–average lifespan, rates of return, annual income needs, and so on–but nobody prepared you for these particular mental adjustments.

How to Combat Retirement Spending Anxiety

The upshot is that these feelings are normal, and there are strategies you can use to ease yourself into retired life:

• Set up a “retirement bucket.” This strategy simulates the consistency of earning a steady income. With your “retirement bucket,” you spill some money into a separate deposit account that you access for regular expenses. You might accomplish this with a scheduled transfer on the first of each month from a high-interest online savings account to a linked checking account, for instance. The retirement bucket method provides stability, creates a natural budgeting mechanism, and shields you from the dread of treating your retirement funds as an ATM.
• Test-drive retirement. You may have long imagined what life you’ll lead in retirement, but the truth is, you won’t know until you get there. You might find yourself drawn to different activities than you expected and budgeted for. This is the “human factor” of retirement planning that no computer model can simulate. For example, I have clients who eat out more frequently now that they are retired because they have more free time to socialize. By all means, estimate your fixed expenses before retirement, but get into the swing of retired life for a few months before locking into a budget.
• Set a deadline. That said, don’t let fear of handling a large sum of money (especially in uncertain economic times) lead you put off budgeting forever. If making big decisions about retirement spending frightens you, let yourself have a few months to just get used to your new life. But set a precise date in the future to revisit decisions, or several milestones spaced out if you prefer–something to make sure that you take some thoughtful action in a timely manner.
• Blow your money–but just a little. Some new retirees have the opposite reaction to financial anxiety–they convince themselves that they deserve new cars, designer shopping sprees, and luxury vacations. Deserved they may be, but these large purchases come at a great cost if done on an impulse. If you’re worried you may be the type to come back from the Porsche dealership with a big case of buyer’s remorse, try this: take a very small percentage of your retirement money and go blow it on something frivolous. It could be that you just needed to get that impulse purchasing out of your system, and this way you can satisfy that impulse without doing yourself some major financial damage.

Above all, I encourage new retirees to view money as a tool. When we make financial decisions out of emotion, we often satiate an emotional need at the expense of good financial judgment. Unless you can identify the emotion driving that financial judgment and adjust accordingly, all that careful number crunching, planning, and forecasting from your working years can become meaningless.

Marc Pearlman is the author of the Positive Money Mindset and host of the popular radio show Your Money Matters! For more about Marc, visit marcpearlman.com or www.Yourmoneymattersradio.com.

Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Marc Pearlman, Representative. Your Money Matters! radio show and the Securities America companies are unaffiliated.

Source URL: Overcoming Spending Anxiety: When Financial Planning for Retirement Isn’t Enough

Copyright Protected © 2010 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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As a part time personal finance blogger, book publishers and book authors frequently send me free personal finance books to read and review. After blogging about making money and a whole slew of financial topics for several years now, in this span of time I’ve probably received well over 30-50 books about money (the vast majority of them parroting and repeating the same material frankly). If I did not periodically sell them online or donate them away to friends and readers of this blog, the incredibly large pile of books would probably have winded up clogging a large corner of my house, gathering dust and taking up space.

College and graduate students in particular have the greatest to gain from not delaying in their efforts to sell off their old and used textbooks online. School textbooks are by their very nature profitable exchanges for the book authors and publishers who issue new editions every few years and force all current book owners to buy the new versions to stay current. Thus, limited in terms of value by short multi year lifespans, school text books are only as current and up to date as the next year’s release date. That is why I always strongly recommend that students sell their books quickly and convert them back to cash form as soon as the school semester or school year is over, lest they delay and wind up in ultimate possession of yesterday’s edition.

Where To Sell Your Used Books To Get the Best Price and Most Money Back

I started selling new and used books online back in 2000 when websites like eBay.com, Amazon.com, and Half.com were just gaining prominence. While I sold my fair share of unwanted books to local used bookstores, thrift stores, and even pawn shops for cash, I focused primarily on online selling due to the higher prices I could fetch over the Internet. Selling back used textbooks has always been a great way to recoup some of the expensive costs of expensive textbooks, but unfortunately, college and university bookstores these days continue to pay students the worst prices for book buybacks. In most cases, college bookstores usually only offer half or less of the original purchase price for buybacks so that they can in turn sell the used titles back to other students for huge markup profits. Today, there are many places over the Internet where you can sell your used books for much better returns – each with its own host of pros and cons.

1) eBay (Auctions) – If you’re a regular consumer looking to buy a new or used book for cheap, eBay will probably be your best bet as auction deals abound there and final sale prices are incredibly low. However, if you’re a seller of used books or textbooks, the general public perception that eBay offers super low prices definitely works against your favor. But due to eBay’s incredibly large customer base and superb ease of use, it’s an online book selling resource you simply can’t ignore. eBay is one of the very quickest, easiest, and simplest ways to sell used books online. Oftentimes if you’re listing an auction for a used book, you can simply utilize eBay’s book template setup feature, punch in the book’s ISBN number, and have an effectively designed eBay auction ready to go in just a moment’s time.

Even if you don’t always get the best prices for your books with eBay, it’s almost a solid guarantee that they will sell (albeit at eBay market determined prices). If you’re looking to sell an obscure, rare, or valuable book, or perhaps you’re looking to capture high traffic volume for an auction involving a collection of books at the same time – eBay might be your best bet due to its ability to offer up maximum public exposure. But because eBay auction consumers have been conditioned and accustomed to seek out and demand almost unreasonably low prices for their bids for some time now, you’re unlikely to make a tremendous amount of money with eBay book auctions if you’re a seller. Ebay’s continuously increasing listing fees and rising commission charges have definitely taken a serious toll on seller profit potential in recent years.

2) Craiglist.org (Classified Ads) - Craigslist is a very popular online classified ad listing website and is also truly the wild, wild west of market place transactions. The greatest appeal of Craigslist for online book sellers and buyers is that there are no commissions, advertisement listing fees, or special mandatory shipping charges required. Pretty much anything goes on Craigslist – with all transactional terms and conditions negotiated and worked out between sellers and buyers themselves. If you have used books for sale and do not wish to be constrained by the auction rules or regulated limitations of policed sites like eBay or Amazon, you might want to try out Craigslist. Prices vary wildly however – sometimes they offer prices higher than eBay listings while other times they’re lower. But in terms of saving time and effort, if you’re looking to get rid of your used textbooks or old book collections all at once in large parcels, Craigslist is ideal.

Here’s a suggestion for Craigslist sellers – if you’re looking to sell a large bundle of books at once, try putting multiple books together into a single collection and posting the listing for sale on Craigslist. If potential buyers express interest, try throwing in additional books to spicen up the pot in their favor if you’re willing to do so. This type of book selling strategy works incredibly well for smaller and lower priced books that don’t sell as well individually.

3) Book Buyback and Textbook Rental Websites - The biggest problem with utilizing do-it-yourself (DIY) type sites like eBay, Amazon, or Craigslist to personally list and sell your used books is the time and effort involved to list and market every one of the books for sale. Trying to keep shipping costs down and save money on the cost of packaging envelopes isn’t easy to do if you’re not an adept micro-tasker. One viable alternative to the do it yourself approach is to solicit the services of an online book buying website that will pay you a one time bounty for all of your available and aggregate used books in one fell swoop. Usually after you’ve provided the book buyback website the names and ISBN numbers of all of the books you have for sale, the site provides you pre-paid postage labels for you to ship the books to them via the postal service. With book buyback services, there is no need for you to manage auctions, handle customer service inquiries, or follow up regarding timely payment. Once the folks at the book buying firm have received your books and reviewed their condition, they usually issue payment directly to you in the way of a check, PayPal payment, or even a direct deposit into your checking account in some cases.

The biggest downside with these online book buyback websites is the incredibly low price they generally pay for used books and textbooks. Because they pretty much do all of the work for you, these companies generally pay only small fractions of the original retail price for these books. Rarely do their offers ever match or exceed the prices that used book sellers can fetch on their own via eBay, Amazon, or even Craigslist. While I don’t necessarily vouch or recommend any one particular site for its quality or reliability – here are a few book buyback and book rental websites I’ve come across that you might want to follow up on – Chegg.com, eCampus.com,  BookByte.com, Cash4Books.net, Barnes & Noble, TextbooksNow.com, Textbooks.com, BooksValue.com, WeBuyTextbooks.com, BooksValue, TextbooksRUs, and CollegeBooksDirect. Let me know if there are any other sites worth mentioning, worth reviewing in detail, or even worth criticizing.

4) Amazon.com Used Books and Textbooks (Recommended For Most Sellers)

Compared to all of the other online ways of selling used textbooks and old books, I prefer listing books for sale on Amazon.com because it is much more intuitive to use than other alternatives. Signing up for an Amazon seller’s account is straightforward and listing your used books for sale is easy. You will be asked to describe the condition of your book, set your desired fixed price, and denote your available shipping options. Amazon.com ultimately reimburses sellers for their shipping costs but charges a $0.99 fee plus an additional fee based on a certain percentage of the final list price. Here are a few Amazon quick links for sellers that want to get started:

• Amazon’s textbook store - Click here if you’re looking to sell a used college or graduate school textbook.
• Amazon’s used book store – If you’re selling any other used book, try this link to get started.

Over the years, I’ve enjoyed a lot more regular success and have earned more profit with Amazon than say, eBay or Craigslist. Quite possibly because Amazon.com started out as a book store and many people still see and trust Amazon primarily as an authoritative source for buying books at a reasonable price, it seems visitors to the site are more willing to pay a slightly higher price premium than at other websites. But perhaps the greatest benefit of using Amazon to sell books is the ability to take advantage of the natural flow of visitors coming to the site and looking to buy a brand new book. Because used book listings are displayed alongside the prices for new book titles, you may be able to siphon off new book seekers and convert them into buyers of used, lower priced versions. Rather than go to Amazon.com and shell out $25 for a new book, you may be able to successfully lure prospective buyers into going for your cheaper $15 used version instead.

Obscure, rare, and collectible books tend to fetch higher prices via an auction or free-for-all classified ad listing than you may be able to get by selling the title via a fixed price listing on Amazon. If you prefer to sell a whole selection of titles simultaneously as a pallet or collection, you might be better off using eBay or Craigslist. Non textbooks or expired textbook editions tend to sell much faster on eBay and Craigslist where aggressive deal seekers and bargain hunters abound. But if you’re selling either a popularly used and update-to-date school textbook, or trying to sell an otherwise recognizable bestselling title, Amazon will probably be your best bet. So long as your textbook has not been discontinued due to the release of a newer edition, you should not have any trouble selling your new condition book on Amazon somewhat close to what you paid for it. Standardized books such as school textbooks and popular bestsellers almost always perform better on Amazon.com listings than on other alternative sites.

If you’re thinking about selling used books on Amazon, here are a few important tips and pointers I’ve learned and picked up in recent years:

1. Always list your used books for sale at prices lower than your closest competitor.
2. Always track your used book listing periodically to ensure that it’s being priced at the lowest it can be.
3. If your competitors attempt to low ball their prices and undercut your title listing, instead of getting into a pointless price war, try matching prices tit for tat rather than beating them instead.
4. List your used book’s condition accurately. Even if your used textbook is really in “like new” condition, you might want to list it as “very good” instead. You don’t want future potential buyer complaints to cause your Amazon seller rating to suffer.
5. Keep your shipping prices low by utilizing free shipping boxes that you naturally come across, or buy them from deep discounters like Walmart, Target, or even your local supermarket. One great way to save a lot of money on packaging and shipping supplies is to buy them through eBay. For example, check out the following prices for eBay bubble wrap mailers, and eBay bubble envelopes.
6. Always ship utilizing the cheapest method possible – For used books and textbooks, the cheapest way to ship is usually through the postal service’s media mail option. However, with certain smaller books, it might very well be cheaper to go with First Class Mail – just ask the post office to ship using the cheapest way possible.

Regardless of which method you use to sell your used textbooks and unwanted books, selling back books (textbooks in particular) is simply a great way to recoup original purchase costs. But bear in mind, unless you are somehow a very large power seller with access to special shipping discounts and access to very cheap shipping supplies, you are unlikely to get rich or make a lot of money online through selling used books alone as a business form. Like those money making paid online surveys you always see, they may be otherwise legitimate ways of earning some extra cash back, but it’s doubtful you’ll ever become a millionaire in the process. It’s theoretically possible, but highly unlikely.

Source URL: Sell Your Used Textbooks and Old Books Online

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.

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Some of you may live within a short drive or even within walking distance of your neighborhood post office. But unfortunately in my case, my local post office is a bit of a distance away situated within the city center, and getting there frequently requires that I fight through road rage inducing traffic jams and suffer through depressingly long lines once I’ve arrived. While I’m sure the folks at the U.S. postal service (USPS) do the best they can under the circumstances, I pretty much avoid visiting the post office as best as I can – turning to the free USPS website to manage the bulk of my postal decisions whenever possible.

Put Your Mail On Hold For Free By Requesting USPS Hold Mail Service Online

Unless you have someone at home to receive your mail for you, those of you planning to be away for an extended period of time (3 days or more) on vacation or for a business trip may want to notify your local post office to put your mail on hold while you’re gone. While you can always visit your local post office, wade through the customer service lines, and fill out one of those Hold Mail paper card forms – the easiest way to put your mail on hold is via the Internet through the USPS homepage. Open 24 hours a day, 7 days a week, and 365 days a year, the website is certainly the easiest way to process all of your mail routing submissions. Your hold mail request can even go into effect the same business day if you submit the request by 3:00 am EST.

Currently, the USPS offers consumers the ability to temporarily put home and business mail on hold for a minimum of 3 days, up to a maximum of 30 days. During the length of the hold period, the home resident or business owner’s letters and packages are held at the Post Office, with normal delivery not resuming in bulk until the date specified.

At the present time, the USPS hold mail feature is free, regardless of whether the request is submitted in person or online. But with the way the postal service is hemorrhaging money and now trying to cut costs and save money by closing out branches and cutting back on staff, I wouldn’t be too surprised if they started imposing a USPS hold mail surcharge of $1.00 or more for each request one of these days. But for now:

• To submit a hold mail request online, visit the USPS Hold Mail Service web page. At the present time, you cannot put your mail on hold by phoning in your request.
• On the Hold Mail page, enter your 5 digit zip code number in the Create a Request box and click on Go. Bear in mind, while the online hold mail service is available in most areas of the country, not all Zip codes will qualify.
• Next, follow the displayed instructions by providing your name, mailing address, phone number, hold mail start date, as well as the date you would like your normal mail service to resume.
• Remember to record your Confirmation Number. This number is important because you will need it to make any future changes to your online request – such as if you decide to cancel the order or you later decide that you will need your mail held for a longer period of time than initially requested.

If you anticipate being away for longer than 30 days, you may need to consider having your mail forwarded to another temporary address. While the online USPS Hold Mail service is free, requesting temporary mail forwarding or any other service that requires a formal address change requires the payment of a $1.00 online service fee. The USPS requires this $1.00 fee be charged to a valid credit card for identity confirmation purposes. While some people may find this small charge rather annoying and somewhat of a deterrent to using this web convenience, I find the tiny fee to be worth the benefit of not having to deal with the time and hassle of personally visiting my local post office branch. Don’t you agree this online service is still worth the nominal cost?

Alternatively for the super frugal cheapskates, you can always print out the paper Authorization to Hold Mail (PS Form 8076) manually and give it to your letter carrier or mail it to the post office that delivers your mail for free (minus the obligatory cost of postage).

Source URL: How To Request USPS Hold Mail Service Online

Copyright Protected © 2009 Money Blue Book: Personal Finance Blog. All Rights Reserved.