31
Mar
Posted in Investing 101 by Roger |
(Hey kids! And teenagers, adults, cats who fell asleep on top of the keyboard and anyone else who might be out there reading this; guess what time it is! That’s right, it’s Investing 101 Time! This week, we’ll cover the wonderful, wacky world of ETFs!)
Q: Alright, so what is an ETF?
A: Exchange Traded Funds, more commonly known as ETFs, are similar to mutual funds in that they are investments that hold stake in numerous other investments. ETFs are created by buying a large amount of stocks (or bonds, real estate, commodities, or other investments), usually following the allocation of a particular market index, and putting them into a trust. Shares of the trust are created, typically in lots of 50,000 (called creation units) and each share represents a stake in ownership of the trust (similar to the way that shares of stock represent ownership of a company).
Q: Why buy an ETF, then? Why not just buy the underlying securities?
A: Because there can be hundreds, if not thousands, of securities in a particular index. To buy all the stocks represented in the S&P 500, you’re have to purchase 500 stocks, each of which will generate a commission at your brokerage. Buying an ETF enables you diversify your holdings instantly, owning numerous securities with one fell swoop, cutting down your costs.
Q: Wait, I thought that mutual funds diversified your holdings. Which is it, mutual funds or ETFs?
A: Both, actually. ETFs are closely related to mutual funds, especially index funds, which follow the same allocation as popular indexes. Both investment choices allow you to diversify your holdings with a single investment. Most ETFs invest in the same indexes as index funds, allowing you to choose which type of investment is more appropriate for you. The prime difference is how they are acquired (ETF shares are purchased through a brokerage, while mutual fund shares are bought from mutual fund companies) and how they are priced (ETFs are priced based on the last traded value, while mutual funds are priced based on the value of the underlying funds).
Q: Are there any particular advantages to using ETFs rather than mutual funds?
A: First, ETFs tend to have a very low expense ratio, even lower than the comparable index mutual funds. Second, ETFs trade throughout the day, allowing you to purchase or sell them instantly (which might be a disadvantage in some people’s eyes). Third, it’s possible to use ETFs to invest in certain sectors of the broader economy, since you can buy an ETF that is invested in, say, financial stocks when you think they’re about to increase in value, and then sell it easily when you think that sector has peaked.
Furthermore, you can do some more complex investing maneveurs with ETFs that are impossible with index funds, like shorting them (that is, borrowing shares from other investors, selling them, and then buying them back at lower prices, hopefully) or using options (specialized investment derivatives, allowing you to set particular prices at which you can sell your holdings or buy other assets). If you’re an active investor, having these possibilities make ETFs a great trading vehicle.
Q: I’ve done enough of these to know what’s next; what are the downsides to ETF investing?
A: I’m glad you asked. One big downside is that since you purchase them through brokerages, you need to pay commissions whenever you buy or sell your ETFs shares. This will cut into your profits, especially if you trade ETF shares regularly. Further, there is a spread between the bid (the amount a buyer pays) and the ask (the amount a seller receives), which means even if you find a broker that offers you commission-free trades, there’s a hidden cost to your purchases and sales. For these reasons, if you buy and sell ETF shares throughout the day, you can end up losing more money than simply putting your money into a mutual fund, where the ability to trade shares is much lower (and the temptation is that much less).
Q: Which should I choose, mutual funds or ETFs?
A: It depends on your goals, investment style, and schedule. If you are investing frequently, especially in small amounts, mutual funds are probably better for your needs. The lower expense ratios of ETFs will make little difference if you’re paying 5% of your investment money towards commisions to buy the ETF shares.
On the other hand, if your investments tend to be seldom, in large amounts, ETFs are likely to be better. If you’re investing $10,000 once a year, the expense ratio is going to take a bigger chunk of your money than a small commission fee when you buy the ETF.
Q: Is there any way to actually figure that out?
A: There is. Just consider this equation:
Real Return = (Money Invested – Commission) * (Rate of Return – Expense Ratio)
The term in the first set of parantheses tells us the amount of money we actually have working for us in our investments. The second term shows the real rate of return, taking into account the expenses for the fund when calculating the rate of return. You can use this equation to figure out what will be the less expensive investment, or to work out which type of investment will lead to a greater value years from now (which I would hope is more important to you).
If you don’t feel like setting up a spreadsheet, (and if you’re not a geek like me, you might not want to do so), there are tools out there that allow you to figure out the better investment online. I like Vanguard’s cost comparison tool, both because I like Vanguard in general, and because it’s an interesting tool. Seeing how your investment patterns and expenses can influence the better investment choice can be informative, and sometimes surprising.
That’s all the time we have for this edition of Investing 101; hopefully ETFs are now more than a random set of letters to you now, and you feel better about how to go about investing in them.
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30
Mar
Posted in Uncategorized by Roger |
Some comments that My Life ROI made on my last Thoughtful Thursday post got me thinking about pet ownership. ROI has argued that owning a dog has many financial benefits, including health advantages, socialization, and security. (Although, as I noted in my response to his post, a yappy little poodle is unlikely to scare off any potential robbers.) On the other hand, Free Money Finance, for one, has been decidedly negative about pet ownership, noting the yearly and one-time costs associated with owning a pet.
My view? I think both views, while valid, miss the point. The main benefits of pet ownership are psychological; if you are someone who loves pets, there’s little chance you’ll be satisfied without owning a pet. It’s a quality of life issue, first and foremost. You need to look at your interests, and if owning a pet is something you want in life, you will just need to integrate pet-ownership into your other household expenses. Going broke in order to own a dog won’t be good for either of you. (And if you don’t have your finances properly in order, you might find yourself facing some hard choices if your financial situation worsens.)
But as with most things in life, it’s not an all or nothing proposition; if you treat pet ownership like any other ongoing expense (similar to car ownership), plan ahead, and budget for your cuddly puppy or adorable kitty (or other non-exotic pet), you’ll be able to handle anything that owning a pet can throw at you. Some things to consider:
1) Know the costs of your pet before you adopt it. The Society for the Prevention of Cruelty to Animals (SPCA) lists the costs of owning several common pets. There are ways to cut down on some of the expenses (for example, by getting the equipment you need to care for them second-hand), but some expenses like food are inevitable. If you can’t afford the costs of the pet, you need to (a) cut other household expenses, (b) find ways to earn more income, or (c) consider a cheaper pet (or even no pet, at least until your finances improve).
2) Set money aside for emergencies. Even if you know how much your pet will cost each year on average, there can be problems and unexpected events that exceed the normal pet budget. Having an ample emergency fund, enough to cover expenses for you, your family, AND you pet, is invaluable. (And can help you avoid situations where you have to put your pet down because you can’t afford to care for him or her.)
3) Be aware of your life situation, and have a back up plan. Life happens, as we know; you need to know how likely it is that you will be unable to care for your pet through its whole life. If you have a puppy, it’s possible that it will live another fifteen years, or longer; for cats, the maximum life is even longer. Are you going to be able and willing to care for your pet more than a decade from now?
If not, or if you are not sure what the future will hold that far in advance, you need to have a back up plan for your pets. You could arrange for a relative to take your pet or make sure that your local shelter will be able to care for your animal if you cannot do so yourself. As with any life-altering change, adopting an animal should not be undertaken lightly; you need to provide for your pet should something happen.
4) Adopt an older pet. There are multiple benefits to having an older pet. You usually find pets that are well trained, friendly, and have all their shots, cutting down on out-of-pocket expenses to get them ready to live with you. You can also get the mental boost of helping organizations like the Humane Society and ASPCA to adopt animals that might be put down or spend the rest of their life in a kennel. Older animals are also less likely to be hyperactive, which can be an advantage if you are a more sedate person by nature.
Follow these suggestions, and you should be able to integrate owning a pet into your financial plans without a problem.
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29
Mar
Posted in PF Spotlight by Roger |
Another week is upon us, and with it comes another PF Spotlight. This week’s feature goes to Lazy Man and Money. Let’s be honest, it’s a cool blog name, and he usually has good commentary; what more do you want from a PF blog? That said, he’s one of the moderators of the Money Blog Network and works a ‘regular’ job on top of his blogging, so he’s hardly lazy; false advertising, anyone?
Ah, I kid, I kid. He’s really a great blogger. Some of the most interesting posts he’s put up recently:
Money’s Seven New Rules of Financial Success (Part 1) and (Part 2) – Lazy Man covers an article in the most recent article of Money regarding the ‘new’ rules of money (which you can read here). Lazy Man’s conclusions pretty much line up with mine; the new rules aren’t so new, at least if you’ve been reading up on personal finance. Still, it’s good to get reminders about these rules every now and again, especially now, when there’s so much talk of ‘everything changing’.
Dog Costs for the First Month – A post covering some of the costs that arise when adopting a puppy. A good list to consider before purchasing a dog. Not having had a dog since I was quite young (and not paying for that dog myself, obviously), I wasn’t aware how expensive a dog, even a rescue dog, could be. An eye-opening post for us non-pet owners.
Leaving Full-Time Blogging - Lazy Man is probably unique in having left his previous job for full-time blogging, and then having gone back to work. (Crazy, I know, but to each their own.) He notes that he’s spending more money, and also becoming more efficient, as he tries to keep up with his blog, his job, and his new dog.
Giving a Lasting Gift to a Baby…(But Not the Parents) – An interesting post; Lazy Man discusses how to give a financial gift to a child that the parents will not be able to access (in this case, because they aren’t good with money). One good idea that came up was to open a 529 in the child’s name and donate to it every year. This works pretty well for a relative, but not so well for the child of a friend; the original questioner wanted a one-time gift that would still be available to the child regardless of how his friendship with the parents proceeded.
Lazy Man’s favorite suggestion is to give the parents a book on managing money, with an IOU promising to contribute a match to a 529 plan when they open one up. Not a bad idea, but you have to be aware of how the parents will react to that kind of gift; if they’d be insulted by a gift encouraging them to be more financially responsible, it could do more harm than good. If that’s the case, you might need to find an alternative gift idea.
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28
Mar
Posted in Weekly update by Roger |
I’m feeling rather manly. As I write this, I’ve just completed constructing a salad table for my girlfriend and her mother. My girlfriend got the idea from Martha Stewart, and I, um, ‘volunteered’ to help her out.
A salad table, for those who don’t know, is a wooden frame (similar to a table) with compartments lined with mesh underneath. The mesh keeps the soil in the compartments from falling out, while allowing water to pass through. This makes it ideal for growing plants, particularly vegetables, in situations where you don’t have much access to soil.
If you do build a salad table, I suggest you stick with the directions as given, and use screws. I built my table using nails, and it seems somewhat unsteady. It’s still stable enough to use, but screws would make it more secure.
Even with that caveat, I do feel proud of my accomplishment. It’s nice to able to make something with my own hands, and to have that item be put to good use. I’m especially glad, as I had never heard of a salad table before, so it’s been a learning experience all around.
Onto my finances:
Offline Savings
PNC (Checking Account) $ 100 -$1229
Susquehanna (CD) $ 2542 +$0
Online Savings
ING Direct (Checking) $ 55 +$0
ING Direct (Savings) $ 1118 -$220
ING Direct (Orange CD) $ 1016 +$0
HSBC Direct (Savings) $ 23 +$0
Smarty Pig (Savings) $ 1398 +$450
Total Savings $ 6252 -$1900
Investments
Vanguard (Roth IRA) $ 6935 +$281
- Small Cap Index (NAESX) $ 3470 +$144
- High Dividend Yield (VHDYX) $ 2917 +$121
- Foreign Total Market (VGTSX) $ 547 +$15
Share builder (ETFs) $ 2948 +$177
- Total US Market (TMW) $ 960 +$55
- Extended Market (VXF) $ 811 +$55
- Total Foreign (VEU) $ 575 +$25
- Small Cap Value (VBR) $ 277 +$21
- Emerging Markets (VWO) $ 324 +$20
Other Investments
Lending Club $47 +$47
Vanguard (Money Market) $ 901 +$0
Total Investments $ 10831 +$1406
Total Assets $ 17,083 -$494
Debts
MasterCard (JCPenney) ($ 28 ) +$0
American Express ($ 813) +$161
Student Loans ($ 11,882) -$8
Total Debts ($ 12,723) -$169
Net Worth $ 4360 -$663
I shifted the organization of my investments and savings around. I’ve also added the funds I’ve had in Lending Club to my investment list. This arrangement more accurately reflects how I actually view my accounts, and should help me to monitor things more readily. There’ll be more changes next month, as I’m closing out my two CDs and reinvesting the money.
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27
Mar
Posted in Lending Club by Roger |
When we last saw our intrepid hero, he was minutes away from completing an investment in Lending Club. Unfortunately, he was stopped at the gate, unable to buy Notes (the name for the Lending Club investments, parts of loans to other people) directly from Lending Club as a result of living in the state of Pennsylvania. What will our intrepid hero do now?
Luckily, Lending Club offers a second method of acquiring Notes, purchasing them off the original investors on a secondary market at the Note Trading Platform. (I still haven’t heard a good reason why I can buy second-hand Notes, but not new Notes. But, that’s an issue for a different blog entry.) Since I still had the (free) $50 from the Lending Club promotion, I decided to check it out:
Foliofn Trading Platform
The trading desk did not look much different from the mutual fund sites I’ve used to seeing. You can go in, click on individual notes and see the status of the loan repayment. You can see the starting price for the Notes, the current selling prices, and the expected yield on the Note, if held to maturity. You can also see if the borrower’s credit score has changed during loan period or whether he/she/they are late on any payments.
In a way, it’s similar to how the stock market really works. After the initial public offering (akin here to the creation of Notes and purchase through the main Lending Club system), the price that a stock can be sold for is determined by an number of factors affecting the business and the broader economy. Good information leads to high prices, bad news drives prices downward.
With some browsing, I settled on a C1 grade note yielding 11.78% and an E1 note yielding 15.68%:
My C1 Note
My E1 Note
The combination of these two Notes should give me a decent yield, but not have too much risk of default. If these investments go well, I’ll probably be adding more money to my Lending Club accounts. If not, I’ll just have to write off the $50 as a learning experience (and take some solace in that it wasn’t actually my money).
I’ll have to give regular updates on the progress of my Notes, and when I’ve seen how this investment with Lending Club pans out, I’ll have to give it my final review.
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26
Mar
Posted in Thoughtful Thursday by Roger |
When it rains, it pours, I suppose. I wrote my article about serving on consistory at my church yesterday, where I stressed the need for volunteers and money in order to keep the church running, especially in light of the recent economic downturn. On the very same day, Wisebread put up an article by Catherine Schaffer about Nine Charities that Deserve Your Money. And down at number 8, you have local churches and charities. I suppose that great minds think alike.
Catherine’s proposition is simple: if we need to put more money into the economy (as just about every commentator says we should), our focus should be on the people who can really benefit from that money. I agree completely; I’m going to look seriously into these charities, and see what I can do to help. (Some, like Habitat for Humanity, might be better served with donations of time rather than money; luckily, I have more than a little bit of time on my hands.)
Some of the other thoughts I’ve mulling lately:
Writer’s Coin is at WiseBread – The title pretty much sums it up, but I’ll elaborate anyway: the blogger behind Writer’s Coin, WC Porter, is now publishing articles on the popular PF site, WiseBread. (Yup, the same WiseBread from which I pulled the first article; it’s a big, popular PF website.) Anyway, go and support him!
Buying a Dog Saved Me Money – My Life ROI makes some financial arguments for dog ownership, starting with exercise benefits and ending with security. I don’t think his arguments are applicable for all dogs; trying using a tea cup poodle for security purposes, and you better hope the burglar laughs himself to death at Muffin’s yapping barks. But his main points are valid; dogs and other pets have numerous advantages, most of which are not limited to finances.
Money May Satisfy But Does Not Bring Happiness – An interesting post by Mr. ToughMoneyLove, detailing a study noting the effects of increased income on happiness (the positive feeling, as measured moment to moment) and satisfaction (how fulfilled you feel in life overall). The study noted that money was more closely correlated with satisfaction than with happiness. One possible reason: lower income people had more leisure time. My inferred conclusion: giving up a few hours of overtime to relax or otherwise do something for yourself might lower your satisfaction, but could make you happier.
What You Don’t Know About Renter’s Insurance – Stephanie of Poorer Than You covers some of the finer points of renter’s insurance. I’ve never had to rent a place of my own (one of the positives of ‘boomeranging’ on my mother and living in her basement, I suppose), but when I do, I’ll be sure to look into renter’s insurance. It sounds cheap, easy, and highly advantageous should something unfortunate occur (which is, of course, the whole reason to have insurance).
Paying Less for Prescriptions: Generics and Assistance – On a sadder note, we have a story about a woman who stopped taking her medications and ended up dying of a stroke. Mrs. Micah then lists a few recommendations to avoid finding yourself in this sort of situation, including buying generics and signing up for a prescription drug plan. Hopefully, we stop a repeat of this incident; some tragedies can be avoided.
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25
Mar
Posted in Uncategorized by Roger |
One of the ways I volunteer my time is to serve on my church’s consistory. It’s essentially the Board of Directors, making decisions about budgets, hiring, and strategic planning. If it happens in the church, we need to approve it, determine how to implement it, and get regular reports on the progress that’s made to complete it.
It’s an interesting view into running the church, getting to see behind the scenes. I’ve learned many things about the expenses associated with even a small church. One of the most important, if somewhat disillusioning, things I’ve learned it that money really does make the world go round. It’s nice to think that our churchs, mosques and synagogues are immune from the money-grubbing ways of the outside world. Unfortunately, that’s not the case. My church (and yours, if you are a church going person) has all the expenses of any other business, including salaries, building maintenance, and administrative expenses. If these things aren’t all paid, the church will fail to run, and might even fall into bankruptcy.
Furthermore, our church holds several investments, of which I was not even aware before joining the consistory. We have three mutual funds from Vanguard, which fell in value along with the rest of the market over the past year. These falling investments have put pressure on our finances, along with every other organization with exposure to the stock market.
Another lesson is that, as the number of volunteers decrease, the number of paid positions we need to fill increases. We’ve had to add at least two positions in the course of my one year tenure on the consistory, each requiring a salary to get the needed work done. As more work goes undone by volunteers, more employees are added, leading the remaining volunteers to feel as if they should be receiving a salary as well. And the cycle continues, with an ever larger portion of our work being done by paid professionals.
One particularly sharp lesson is that when the broader economy goes sour, the ripples can spread further than you’d initially believe. In part because of the economic downturn, the attendance at our church has been down and the offerings decreasing. Combined with the aforementioned investment declines and increasing number of staff members, and we’re finding ourselves in a financial crunch.
All of these have helped to put our church in a bad way financially. We are considering cutting down our giving to other churches and charities, looking at what functions we can do without, and even debating whether we should merge with our neighbors. In any case, there’s no chance that we’ll be able to continue the same way we’ve been going so far. In many ways, it’s much the same situation many individuals find themselves in currently, debating what needs to be removed from the budget in order to make ends meet.
I’m not writing this to bring anyone down, merely to describe some of the things I’ve learned as a volunteer with my church. It’s given me a valuable look at how the church is run, enabling me to have a better understanding of the money, time and effort needed to run a sizable organization. It’s been an enlightening experience, one I’d highly recommend to anyone who’d like to help their community and gain some first hand knowledge at how an organization like this functions.
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24
Mar
Posted in Investing 101 by Roger |
(Welcome back! I hope you are ready for some learning, as we are going to cover the wonderful world of mutual funds. Hold onto your hats, it’s going to be a wacky ride.)
Q: What are mutual funds?
A: Mutual funds are companies that buy a variety of other investments, such as stocks, bonds, and REITs. Shares of the mutual funds are then sold to investors, who then can participate in the gains or losses of the investments. The mutual funds charge some expenses to the investors, covering the costs of maintaining the funds and employing the fund managers.
Q: Alright, sounds reasonable. Why should I invest in mutual funds, though?
A: The primary reason to invest in mutual funds is for diversification. Each mutual fund holds dozens, hundreds, or even thousands of individual investments. Buying shares of a mutual fund allows the investor to own a tiny amount of each of those investments, limiting the damage that a single bad investment choice can cause.
Another advantage of mutual funds is that fund companies will allow you to regularly invest new money into the mutual fund without paying commissions. This includes reinvesting dividends or capital gains distributions automatically, if you choose to do so. By investing in mutual funds, you could save the money that would be spent reinvesting these funds in stocks or bonds.
Q: I’m sold. What types of mutual funds are there?
A: There are thousands of mutual funds, covering just about every investment type in existence. Just within the stock funds, for example, you have foreign and domestic funds. The domestic funds are further divided up into growth (companies that are expected to grow faster than most companies), value (stocks that sell for less than their intrinsic worth), and blend (a mixture of these styles) funds. And these funds are divided even futher, into large, mid, and small sized company funds, dependent on the overall net worth of the company. These divisions are expressly shown in a style box, such as the one below, where each small square represents a different type of fund (with some even covering more than one box):
An example style box
And there are still other distinctions; some funds invest in particular sectors in the broader market (such as technology or utility stocks), others invest for dividend yield, and still others invest according to principles of social responsibility. And that’s just domestic stock funds; there are other distinctions for foreign funds and bonds…
Q: Alright, alright, I get it; there are lots of different funds. Are there any important distinctions?
A: All the distinctions are important.
Q: *Threatening Stare*
A: Alright, one particularly important distinction is the difference between index funds and actively managed funds. Index funds follow various indexes (like the S&P 500, the Russell 2000, the Wilshire 5000), holding all the stocks in the index (or sometimes a smaller, representative sample). Actively managed funds have managers running things, choosing which investments to buy and sell.
Q: Ooo, that sounds good. What could go wrong with having professionals choose my investments?
A: Oh, yes, that… Well, while active management can beat the indexes (in theory), in practice, most actively managed funds keep pace with their respective indexes, at best. When you take into account the higher expenses charged by active funds (typically above 1% of the assets being managed compared to 0.2-0.4% for index funds), they usually end up lagging behind the comparative index. A good primer on the difference can be heard on the Vanguard website.
Q: That’s no good. So, it’s better to stick with index funds?
A: Generally, yes. While there can be actively managed funds that outperform the appropriate index over a long period of time, it will take time and research to find them. Furthermore, there will be changes, whether in the management or in the broader economy; active managers that do well in good economic situations may crash during bad times, or vice versa.
For the most part, having most (or all) of your mutual fund money in index funds will serve you well. Adding actively managed funds only after much research, a thorough understanding of how the fund manager will use your money, and a reasonable expectation of how much more money you will earn from taking an active approach is a smart approach.
Q: I get you. How should I invest my money in mutual funds, then?
A: That’s the $64,000 question; there are almost as many different ideas of how to invest in funds as there are commentators making the recommendations. In short, a lot of different ideas are being bounced around. There are a few generally agreed upon principles:
1) When you are young, you should own mostly stock funds, gradually adding bond funds and even cash to the portfolio as you get older.
2) You should have exposure to foreign markets as well as domestic stocks, to help diversify your holdings even further.
3) Narrower types of funds, such as sector-specific funds, should be used sparingly in your portfolio. Most of your holding should be broad, total-market funds, whether in domestic stocks, foreign stocks, or bonds.
I go more in depth about one method of creating a portfolio from stock and bond index funds in my second investment pyramid post.
Q: Any shortcuts to all that investment work?
A: Most fund companies now offer target-date funds. These are funds of funds, mutual funds that invest in a variety of other mutual funds. They are designed to start out fairly agressive (mostly stocks) and gradually shift into more bonds and cash as the funds get closer to the target date. By picking a fund with a target date near the time you intend to retire, you can have an investment that does all the rebalancing and reinvestment work for you over the course of your life.
Target date funds aren’t perfect, though. They charge additional fees on top of the fees for the underlying mutual funds, increasing the expenses. They also take a ‘one size fits all’ approach, without regards to individual differences in goals or investment needs. If you do decide to take this route, do some research, and make sure your chosen target date fund will meet your needs, now and in the future.
That wraps our look at mutual funds in all their glory and splendor. I hope it helped you to get a feel for this investment and how to take advantage of it.
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23
Mar
Posted in unemployment by Roger |
As though of you who have been following my blog are aware, I am currently unemployed. (I’m actually working part-time, but earning a low enough rate that I am still able to receive unemployment benefits.) I am also a resident of Pennsylvania, and have been all my life. And so, it was with great interest that I read this article on CNN about the fees on Pennsylvania’s unemployment debit cards. (Thanks to Mrs. Micah for making note of this article on her blog.)
As a little bit of background, Pennsylvania pays out unemployment in one of two ways. First, you can opt for direct deposit into your bank account (this is the path I chose, since I’m attempting to do most of my banking online anyway). If you are unable or unwilling to do direct deposit, you will receive a debit card, onto which your benefits will transferred when you apply for benefits every two weeks. These are the only options that Pennsylvania (and many other states, I gather) seems to allow; it’s no longer possible to get paper checks sent out.
The problem with the debit cards is that there are numerous fees that are triggered when you take certain actions. These actions can range from making too many withdraws (even at participating banks) to accessing your account via the telephone too many times. A short list includes the following:
-Withdrawing money from a PNC or Wachovia ATMs: $1.50 per withdraw (you are given at least 1 free withdraw using these ATMs per deposit)
-Withdrawal from Alliance One or Seven Eleven ATMs: $1.50 per withdraw (no free withdraws offered)
-Withdrawal from other ATMs: $1.50 per withdraw, plus any surcharge fees from that bank
-Teller Withdraws: No fee
-Deposit transfer: $1.50 each time
-Purchases in the U.S.: No fee
-ATM Balance Inquiry: $0.40 each time
-Monthly account access via telephone: $0.35, after using up the five free calls provided each month
How can you control the amount of money that gets eaten away by these fees? Simple, know your habits and how you’re going to use the debit card. If you never use an ATM (I don’t, myself) and either pay for your purchases directly or withdraw the money using a teller, you can get the debit card without worrying about being nickeled and dimed to death by fees.
On the other hand, if you frequently use ATM machines, especially ones from companies other than PNC, Wachovia, Seven Eleven, and Alliance One, you should at least consider having the cash directly deposited into your checking account. If you find that you’re paying too much in fees to access your unemployment money (and I’d say that paying any fees is too much), it is possible to change your account over to direct deposit without much difficulty. When you are filling out your biweekly unemployment application, you should see the appropriate link available on your state’s system. (It’s one of the first links on the PA unemployment system.)
Here is the site for EPICard, the Pennsylvania unemployment debit card system. It also serves Florida, Georgia, Illinois, Indiana, Iowa, Mississippi, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Texas, Utah, and Virginia. They provide numerous services, and could be quite helpful if you get your money put onto the debit card.
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22
Mar
Posted in blogging by Roger |
Hello and welcome. If you’re reading this, it means that you found your way here from my old blog. Or that you happened to stumble across this in your other travels throughout the internet. In any case, it’s good to see you here, and I hope you’ll find some worthwhile and interesting information.
I’m still in the ‘moving in’ stage of this process. I hope you’ll be willing to bear with me; this move will ultimately make this blog better, and allow me to make this site better and more interesting for everyone. If you have any ideas you’d like to share, please feel free to reach me at theamateurfinancier AT gmail DOT com. I look forward to providing you with a great blog experience!
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