Personal Finance Blog

Tips And Stories To Help You With Managing Money

Banking with an FDIC-Insured Bank

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It is hard to trust anyone these days especially when it comes to money. Money talk is always serious talk which means that people are very stringent when it comes to where they will be putting their money. In these hard times, this is already the norm since money is so hard to earn that it’s almost impossible for someone to just put money anywhere. But what if you want to put your savings in the bank? Would putting your money in the bank be a much safer choice rather than just leaving it home in your closet?

Established in 1933, the FDIC or the Federal Deposit Insurance Corporation has served as a safety net for bank depositors. Ever since its inception, no depositor has lost a single dime from their FDIC-insured funds. The independent agency of the US government does not only insure US citizens, they insure other citizens from other countries as well as long as the banks they bank with are insured by FDIC.

An FDIC-insured account means that your bank account is backed by the US government in full credit and full faith. This reputation is something that other insurers cannot offer. Operating for over 70 years now, the FDIC is the people’s support system when or if their banks close. The insurance limit for every account you open in an insured bank is $250,000.  The agency however does not insure money invested in mutual funds, stocks, bonds, life insurance policies, municipal securities, and annuities even if the said investments are made in insured banks. The other types of accounts that the FDIC does not cover are safe deposit boxes and their contents. US treasury bills, notes or bonds are not insured by the FDIC as well but they are backed by the US government.

But what does this deposit insurance cover?

FDIC-insured accounts range from checking, savings, money market deposit, to time deposits and negotiable order of withdrawal (NOW). The depositors given this insurance are those who bank with insured banks. Banking with an FDIC-insured bank means your money is protected dollar for dollar. If you own two accounts in two different banks and these banks are FDIC-insured, it means that your two accounts also have the FDIC protection. This means that if these two banks close, you will have an insurance of $250, 000 for each account. If you have two accounts in one bank, you will not get two FDIC insurance, just one.

The standard maximum deposit insurance amount also known as the SMDIA allocates $250, 000 per depositor in every insured bank. This insurance will run through until December 13, 2013. By 2014, the said allocation per depositor will go back to $100,000 except for certain retirement accounts which will retain their $250, 000 per depositor insurance in every insured bank.

Banking with an FDIC-insured bank means that you as the depositor will receive insurance if the bank closes all of a sudden. Although this is something that most of us never imagine to happen, it is better to be safe than sorry.

The Pursuit of Happiness Through Difficult Financial Times

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In the pursuit of happiness, many of us believe that having lots of money will make us happy. According to Jean Chatzky, the author of the book “The Difference,” this is not always true because once you have money, more money won’t buy more happiness. The happier you are, the more money will come in.

Some of us have been through bad financial situations. With bills piling up, creditors calling, and the household income barely enough, life still goes on.  You can make the best of it or just plain give up and lose hope. Financial problems can  be  very stressful  for anyone but there is always room to make a change in your attitude. In such difficult times, what are the critical factors that can make a difference in your life? Jean Chatzky tells us all about the main traits that you have to be successful.

Happiness and optimism are two of the keys in making more money because these two traits help you solve problems and come up with great ideas. Even if you fail the first time, being optimistic will help you try again, and again.

Having resilience means you can overcome anything and that includes financial problems. These people never denied that their finances were suffering. They were able to concentrate on how to take control of the things that they could change and let go of the things that they could not.

Having passion to lift yourself up from your financial struggles is another key element to financial success. Loving what you do is very important and when you love what you do for a job then you are on the road to financial stability.

Social capital is acquired by seeking out advice from people who can help you get to the next level of income. Value the relationships you have and reach out to people that you can help and those who can help you. Take time nurturing these relationships.

Wealthy people have the funds to spend lots of money but most of them are not foolish spenders at all. In fact, they save money on a regular basis. This is a fundamental goal for anyone wanting to improve their personal finances.

We usually have hunches about what might happen next. These intuitions will help you make decisions about spending and investing your money. Most wealthy people have developed  good intuition and this gives  them a big advantage. Learn to listen to your intuition when you are making financial decisions.

Taking calculated risks in the market is a good way to make money whether in good times or in bad. Those that lost thousands in their investments are slowly beginning to see those dollars come back. Let your money work hard for you.

Being grateful for your particular situation is key to being able to move on and learn from the past. People who get rich and stay rich, express their gratitude by contributing to organizations and communities that they care about.

Use these principals of gratitude, passion, resilience and optimism to change your attitudes, set realistic goals and return to your path of financial prosperity.

Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful. ~Albert Schweitzer

Personal Finance Give Up-Itis

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Personal Finance Plans

Have you given up trying to succeed with your financial plan? Have you gone through personal finance disasters? Do you suffer from give up-itis?

You may be wondering what give up-itis is. To explain that, let me share with you a story from Donald O. Clifton’s book, “How Full Is Your Bucket?”

U.S. Army chief psychiatrist, Major  (Dr.) William E. Mayer,  did a study of the lives of soldiers who were held as prisoners in the Korean War. He studied 1,000 cases of soldiers who suffered extreme psychological depravement as POWs.  These people didn’t suffer physically as in being tortured, but they were systematically deprived of the normal benefits one can receive from friendship and support.  They caught a deadly disease:  extreme hopelessness.

The methods used to cause this hopelessness were conniving and deceitful. The death rate in the POW camps there rose to 38%, the largest in military history. Half of those soldiers died because they had given up.

To break down the spirits of the soldiers, they were offered small rewards for ratting out their fellow inmates. Nothing happened to the inmates as a result of the news, but alienation soon crept into the camp. The North Koreans in charge held mandatory group meetings where the prisoners were forced to tell of all of the bad things they had done and any instances of good that could have been done, but failed to be done.  Without emotional support, the prisoners soon began to give up.  Some would go into their huts, sit in a corner, pull a blanket over their heads and were dead within two days.

You may have suffered from a recent financial loss of some kind, perhaps a loss of a spouse, a job or your personal health.  If you can learn from the hopelessness the soldiers  suffered as prisoners of war, you can start getting your financial life back on the right track.

Don’t give up and pull the covers over your head preparing to die. Seek out friendships that are emotionally supportive. Support other people in their struggles with life and you will fill that emotional bucket you need to avoid give up-itis.

With emotional support, you will be able to face things in your personal financial life that you never thought you could face.

Five Personal Finance Tips

  1. Be honest with yourself about what has happened to you. Find out where you are right now with your money.
  2. Re-examine your living expenses and what you actually need to survive. Is there any place that you can cut back on spending? Where can you most effectively decrease spending?
  3. Evaluate your income as it is now and make plans to increase it. There are many ways you might be able to earn extra income to help you through. Odd jobs and piece work types of jobs are plentiful.
  4. Start tracking your expenditures if you don’t already do so. Tracking what you do is the best way to help you pinpoint the problem areas that you may be causing.
  5. Set goals that you would like to reach and tell a friend about them. Emotional support from friends is really invaluable to you.

What is your plan to improve your financial situation?

Smashing Barriers To Saving Money

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Saving money is not easy when you don’t have enough money coming in every month to cover your bills, so you might need to look at ways to increase your income. There are many ways that you can increase your income. Years ago, it may have been harder.

Increase Your Income

The Internet has opened up many opportunities for people to make money.  You can put items for sale quickly and easily on Craigslist or eBay and get rid of some of those items that are just taking up space. That should bring in some money, but eventually you will end up with nothing else to sell.

You can also offer your expertise to others through websites that will connect you with people looking for one time job offers. Perhaps you can write and get paid for doing that. Places like O’desk.com and Scriptlance. com would be a great place to start. You can bid on jobs that fit your area of expertise. They commonly have jobs for writers, programmers, web designers, graphic designers and a large variety of other services.  You can also tap into Craigslist and hunt for jobs there.

Set a Savings Goal

Assuming that you are diligent in your hunt for extra income and follow through with the difficult task of actually increasing your income, the next step for you is to set a goal for your savings. It’s a lot more fun to make sacrifices if you can picture in your mind being able to reach these goals.

For example, your goal might be to get rid of your credit card debt.  Picture how it feels to not worry about those monthly payments. Picture how it would feel if you took that same amount of money you were paying every month and saved it for a nice vacation. What is your dream destination?

Put pictures of the places you want to go to in your home office, on your refrigerator. Put them anywhere that you will see them every day.  Next time you are tempted to use your credit card, just remember the pictures of your vacation spot. This can help you remember why you are doing without or not using your credit card. People tend to willingly go without a lot of things in order to reach a goal that is really worthwhile to them. Set a goal that is worthwhile to you.

Imagine Achieving Your Savings Goal

The secret to saving money is to be able to picture how life will be when you reach the goals you have set. So often when we feel bad or when we suffer a loss of self esteem, we naturally look for ways to make ourselves feel better. That is a natural and good response.

Plan to do things that will make you feel better.  Make sure they will not cost you much money or cause you to gain weight.  There are a lot of activities that you can do to feel better at no cost.  Listed below are some suggested activities that cost nothing and feel good.

  • Go for a walk in a popular park. Getting outside and seeing other people is self assuring and helps you connect to other people.
  • Can you smile at anyone? Smiling brings internal pleasure as well as bringing happiness to someone else. Remember what happens to you when you see a baby smile at you. You feel joy at no cost.
  • Exercise in any fashion that you enjoy.  Get moving and see if that doesn’t help your outlook on life.
  • Talk to someone you haven’t talked to in years. Connecting with people can make you feel good.
  • Check your local newspaper and see if there are any events you can attend that interest you and don’t cost anything to attend.
  • Pet a dog or cat. Pets can bring smiles to your face quickly.

Whatever method you choose to do to make you feel better is fine as long as it is low cost and low calorie.

Save money easily by having sufficient income and by setting your savings goal to be something worthwhile to you.  You can make saving money so much easier on yourself. Start today by setting your savings goal and begin to dream again.

Learn the lessons that your money can teach you

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Personal financial stress Are you struggling to make ends meet? Is the personal financial advice that you hear from experts making you depressed?

Suze Orman has a television show that offers you personal finance advice. People are invited to call in and ask her the proverbial question, “Can I afford to buy this item?”

Some things that people want to buy seem to make perfect sense.  They may however, be outrageous to Suze.  She’s definitely on the conservative side of spending. You need to have a gazillion dollars saved to be able to afford to purchase an item under ten thousand dollars.

Powerful, forceful, decisive and intimidating, Suze will tell you the good or bad news about whether you should make a purchase or not.  She always says, “Show me your money!” You will be asked to list your current income, your savings, your retirement savings and the amount of debt you have accumulated.

After watching a few hours of this show, you may look at your own situation and feel like a total failure and that you’ll never measure up to the standards you “should” meet. You may have been through a job loss, a divorce or a medical catastrophe and not have the assets you see other people having.

The ironic thing about this show is that a few experiences in Suze Orman’s past may actually make you feel better.  Recently on Oprah’s website, Suze revealed that as a young woman, she had been lured into the rich lifestyle and the feeling she needed to own things to impress other people. She frankly admitted, “I, Suze Orman, took money out of my 401(k) to pay for that pricey Cartier watch. And when I ran through all my money, I started using the bank’s. I eventually had more than $60,000 in credit card debt.” So she has been in trouble financially and knows what kind of misery it brings.

Dave Ramsey, popular author, radio show host and personal finance advisor had a similar brush with disaster. By the time he was 26 years old, he had a net worth of $1 million dollars. That sounds wonderful, doesn’t it?  However, he ran into some problems with borrowing money.  Soon, one of his creditors demanded that he pay his short-term notes totaling $1.2 million. On top of that he had only 90 days to do this. He was sued, foreclosed on and with a wife and baby added to the mix, the Ramsey’s were finally bankrupt.

It is just this type of experience that led him to develop his expertise on financial advice. He sought out every type of financial advice out there. He read everything he could get his hands on. Now he has helped thousands of people to achieve financial security.  He took to heart the admonitions of F. Scott Fitzgerald, considered to be one of the twentieth century’s greatest writers.

“One should … be able to see things as hopeless and yet be determined to make them otherwise.”

If you are struggling financially, become determined to make things different.  You can learn your money lessons by paying careful attention to getting out of debt, building an emergency fund, and living on a reasonable budget.