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How to Squelch 4 Big Money Wasters
Tweet Share on Facebook May 16, 2008 Comment (13)I recently chatted with Amy Bordoni, a writer and blogger in the Chicago area. (Disclosure: She is also the sister of my colleague Liz Wolgemuth, author of the Inside Job blog.) As the mother of two young sons, Bordoni said that she has noticed that her family ends up wasting a lot of money on little things that add up over time. "Although we rarely eat out, shop secondhand, strive to be energy-conscious, and avoid developing a Starbucks habit, we still waste a lot of money that could be saved because we are disorganized," she told me. Here are four of her big money wasters—and how she conquered them.
• Overdraft fees. Bordoni and her husband usually pay bills online and write checks without keeping a record of the money going out, so they end up overdrawing their account at least once a month, with a $39 fee each time. When she got frustrated and called the bank to figure out her options, she found that she could open a new credit card account with the bank and have overdraft protection for just $10 each time it is used. "A big 'savings,' especially for a couple with uneven cash flow...and no intention to ever get into Quicken," she says.
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Congratulations, Basic Financial!
Tweet Share on Facebook May 16, 2008 Comment (2)Biff from Basic Financial won the first Alpha Consumer Challenge. Congratulations, Biff! He said he would use a $1,000 windfall to save more money:
The first thing I would do is buy a decent bicycle so that I could bike to work (on non-rainy days), since I live only 6 miles from work. This would cut down on my gas costs, especially if I start now. I would also convert a dog pen we have into a greenhouse to grow my own veggies and sell the rest at the local farmers market down the street. I would also probably put between $400 to $500 into our emergency fund.
Since he blogs anonymously, he is opting not to have his photo and full name featured here, but he will receive a copy of Curtis Arnold's How You Can Profit from Credit Cards. Stay tuned for the next challenge, coming soon.
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Beware the Latest Credit Card Scam
Tweet Share on Facebook May 15, 2008 Comment (11)If you get a call from your credit card company informing you that your account has been flagged because of suspicious activity, be skeptical.
A current scam works like this: A fraudster, claiming to be from the security department of a credit card company, tells the consumer he is checking unusual account activity. He may even offer a badge number. Then, he tells the consumer that a fake purchase, such as an $800 television from Best Buy, has been made on the card.
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Saving Too Much for Retirement
Tweet Share on Facebook May 14, 2008 Comment (7)Dear Alpha Consumer,
I contribute 10 percent of my income to my 401(k), which turns out to be around $14,000 a year. But if I get a raise next year and that 10 percent exceeds the $15,500 annual limit for contributions for people under 50, then what will happen? Will someone tell me that I've reached the annual limit, or will I get the money back in some way? Is there a way to contribute exactly $15,500?
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Audio: Couples and Money
Tweet Share on Facebook May 14, 2008 Comment (1)Over the weekend, I spoke with WTOP about couples and financial management. We talked about what each spouse should know about money and how to start those conversations. Listen now, download in
iTunes, or subscribe to the 
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Podcast: Why We Shop
Tweet Share on Facebook May 13, 2008 CommentConsumer psychologist Kit Yarrow recently spoke to me on the Alpha Consumer podcast about what shopping means to us, beyond the ability to buy material goods. She explains how it can define us, how to get control of overspending, and what makes generation Y different.
You can also hear the Alpha Consumer Tip of the Week on how to eat on a budget. Listen now,
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Reporter's Query: Leaving a Legacy
Tweet Share on Facebook May 13, 2008 CommentFor an upcoming story, I am looking for parents who have decided to give money to their children well before dying. For example, some parents contribute to a mortgage or set up charitable donations in their kids' names. If you would be willing to share your story, please E-mail me at alphaconsumer@usnews.com.
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Vote on the Alpha Consumer Challenge Winner
Tweet Share on Facebook May 12, 2008 Comment (2)Almost 50 people submitted responses to the first Alpha Consumer Challenge, making my job of choosing the top three difficult. Answers to the question—What would you do with $1,000?—ranged from the practical, such as buying a new toilet, to the pleasurable, such as taking a trip to the tropics.
It wasn't easy, but here are my top three choices. Now, it's your turn to vote on the winner, who will get his or her name and photo posted on the blog and also receive a copy of Curtis Arnold's How You Can Profit from Credit Cards. Voting will stay open until Thursday, and the winner will be announced Friday.
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The $1,000 Debate
Tweet Share on Facebook May 12, 2008 CommentI asked each blogger who participated in last week's debate over how to spend $1,000 to comment on each other's approaches, which were quite different. J.D. Roth said he would save the money to put toward his larger financial goals, such as a trip to London and new car. Farnoosh Torabi said that if her job didn't prohibit it, she would invest in the stock market, but otherwise she is going to use it on future splurges, such as summer beach weekends. Meanwhile, Boston Gal said she would save almost all of it.
Here is what they had to say about each other's choices:
J.D. Roth of Get Rich Slowly on Boston Gal's approach:
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Weekly Blog Roundup
Tweet Share on Facebook May 12, 2008 CommentThis week's Carnival of Personal Finance has great advice on everything from shopping at garage sales to controlling impulse purchases. My favorite post—from the blog But Why Doesn't It Grow on Trees?—is on what the writer's mother taught her about money management, including making her own bread and avoiding soda.
