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175 Past Due – No More Free Lunches (Or Banks)

by Derek Sisterhen on October 8, 2011

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Past Due: Radio 175 – No More Free Lunches (Or Banks)

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Greg has been reading the news and seeing how banks are beginning to charge for previously free services. In particular, he noticed that Bank of America is preparing to charge customers $5 a month to use their debit cards. Greg asked: “First, how did this happen (that banks are charging fees like this)? And second, what does this mean for an average guy like me? How should I be vetting my banks?”

These are great questions. Oftentimes we assume that our bank has our best interest at heart, but we forget that they work for shareholders (which is why it’s a good idea to have your financial institution(s) in your mix of mutual funds, too). When things change, we figure the bank is out to get us; but the reality is that they need us, or else they wouldn’t be in business.

Today we discussed:

1) How banks actually work; why they offered free services for so long and what recent regulatory changes are forcing them to do differently.

2) The three questions you should ask to determine if your bank relationship fits your needs.

If you put a premium on relationships – having a banker that knows your name – recognize that those services cost money and may require you to pay for them. If you prefer free self-service banking options, just remember that you get what you pay for.

If you have a specific question, I’d be happy to answer it and further cultivate the wisdom of the Past Due Radio masses. The experiences of our listener base provide plenty of insight we all can learn from; don’t hesitate to ask – I’m happy to help!

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127 Past Due – The Holiday Minefield & Punishing Savers

by Derek Sisterhen on October 15, 2010

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Past Due: Radio 127 – The Holiday Minefield & Punishing Savers

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Send me your feedback or leave me a voice mail: (919) 374-0501.

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Do you know that we’re on the verge of entering a minefield?  That’s right!  The holidays are just around the corner and there’s plenty to prepare for financially.  Are you traveling?  Are you having guests?  Who’s buying the food?  Are you saving for gifts?

Whoa!  That’s a lot to prepare for, so today we talked about avoiding the pitfalls of the holiday minefield so you can make it to the new year with all your financial limbs intact.

I also shared that those who save are being punished in our current economic environment, but that their disciplined financial habits provide plenty of other rewards.

Today’s Mentionables:

Money, Marriage & Holidays – Show from December 2009 interviewing Counselor April Miller on surviving the holidays.

Be A Big Loser – Show from January 2010 on setting effective goals for yourself rather than falling off the resolution bandwagon.

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The Bad News Is People Saved Some Money

by Derek Sisterhen on August 5, 2010

I love reading consumer spending reports. The way they are written just makes me laugh because all the “bad” news is right up front:

“Last week the government said economic growth for the second quarter slowed to 2.4 percent. Many analysts believe it will dip further in the second half of the year as high unemployment, shaky consumer confidence and renewed troubles in housing weigh on the year-old economic recovery.”

Oh no! What are we going to do? Don’t Americans know that the only way to solve our economic troubles is to spend, spend, spend?

It’s your patriotic duty to buy appliances, houses, cars, clothes, movie tickets, more clothes, and take vacations. You don’t want to be a traitor, do you?

(So, we read a little further in our spending report…)

“The personal savings rate rose to 6.4 percent of after-tax incomes in June, the highest reading in nearly a year. The savings rate is now about three times the 2.1 percent average for all of 2007, before the recession began. Households chose to save the extra money rather than spend it. Higher savings restrain spending in the near term. But the extra resources allow households to repair their tattered balance sheets.”

Another fault of consumer spending reports is that they lag. Right now, we’re reading about what happened in June, a full five weeks after the fact. Since the summer months are notorious for lots of unbridled spending, I’ll be interested to see how the savings rate fared in July.

We’re still seeing a shift in a large portion of our country toward conservative money management. Recognizing that personal savings mitigates a whole host of risks we face – from emergency room visits, to car repairs, to job loss – means that we’re finding some sea legs in the choppy recessionary waters.

And when the bad news is that people are saving money, I’d say many of us might just make it out of this storm.

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