Save For Specific Goals With Your Own Online Piggy Bank

piggy bankYou may be expecting a review of the new online service SmartyPig. Well, that review is in-progress, but while doing my research I was reminded of an alternate way to create your own online “piggy bank”. Remember how you’d actually have to save your quarters to buy what you wanted? Oh, the good old days… ;)

Let’s say you want to set up multiple “baskets” or “piggy banks” of money for specific goals. Maybe you have

  • an ongoing pet medical fund to which you add to regularly instead of paying for insurance ($50 per month?)
  • an ongoing car maintenance/repair fund (I need one of these)
  • a summer vacation fund (goal: $1,000?)
  • a Christmas fund
  • …or that all-purpose emergency fund!

You want separate balances and accounting for each account to keep things neat, but you don’t want to open up 3 new accounts at 3 different banks. The good news is that this can all be done with Capital One 360 – they let you easily and instantly create multiple savings accounts that have their own balance and nickname. No credit checks, no applications, and it earns interest. Here’s how:

1) First, you’ll need a Capital One Consumer Bank account. If you have one already, you’re all set. If you opened one before and it got closed to due low balance or inactivity, you can have them re-open it by calling 1-888-ING-0727 (or you can login and do it). If you are a new customer, you can earn a $25 sign-up bonus here by opening with at least $250.

2) Open up an additional savings account (or several!). It’s not all that complicated, but it still confused me initially so I broke down the steps below with screen-by-screen walkthrough. Click on the thumbnail images for a full size screenshots.

3) Set up an automatic savings plan
Although you can schedule manual transfers, why not make it easy on yourself and set up an automated transfer schedule? You can set a fixed amount of automatic withdrawals if you have a specific goal ($100/month x 1 year = $1,200 = HDTV), or you can make it repeat indefinitely (great for our often-used pet fund).

And you’re done! You can make as many of these sub-account as you like. The cool thing is you can make withdrawals at any time (max 6 per month), and there are no minimum balances or fees. The interest rate at 0.75% APY isn’t the absolute highest, but comparatively it’s no longer that far behind other similar banks.

(FYI – I was talking with my sister about this and she told me she didn’t use her Capital One 360 account anymore. When I asked why, she said it was not because the interest rate wasn’t high enough, it was simply because they made you log in with your customer number, and she would never remember it! I just wanted to point out that now you can pick your own username (like “janedoe444″). Use it carefully though, as your password is still just a 4-digit PIN.)

Trying To Eat Out Less: Ideas On Reducing My Grocery Bill

thumbnail credit: month one of our credit card statements spanned two pages because we had eaten out so often. Not only is it more expensive, I’m pretty sure it’s less healthy. So now we’re trying to limit ourselves to 2-3 times a week (minus the cafeteria at work), and making one of our outings to a new restaurant that we haven’t tried before.

This means more grocery shopping. But did you know that grocery food prices jumped 5.3% in 2007? Milk, eggs, and bread all cost from 10-30% more than last year. This year looks to be even worse, especially with rising oil prices making transportation more expensive. In last weekend’s WSJ Sunday edition, there was an article titled Savvy Grocery Shopping that had some good money-saving tips. Here are a few of them along with some others I’ve also picked up elsewhere.

Stockpile and Hoard
Grocery stores constantly rotate the stuff that they have on sale, so that at any one time there is something new to attract you into their store. Then, while you’re already there, they expect you to buy other things at full price. The key is to know when something is at a great price, and then stockpile staples at that price. That way all your pasta, canned veggies, soups, broths, sugar, and all non-perishables are all bought 20-50% off retail.

Keep Track of Prices
The problem: How do you know what is a good price? I forget all the time. Some people keep what is called a “price book”, where you track the price of your commonly bought items so you can start to see the cycles and pricing patterns. There is even a website called TheGroceryGame that will track prices for you and let you know when to buy – for $10 every 8 weeks.

I’ve also noticed that you can also start to learn when they mark down meat, usually a day or so before the legal sell-by date. The meat is still good, I just stick it in the freezer right away until I need it.

Be a Coupon Ninja
There is an entire subculture of “couponers” out there that I call “coupon ninjas”. They find good coupons, then get 20 duplicates of them, go to a store that doubles them (instead of 25 cents off you’d get 50 cents off) and then stockpile like crazy. I’ve seen scans of grocery receipts that show $150 of food bought for $23.47. Sometimes they actually get negative! While I admire their drive, I just stink at using coupons. I’ll clip them, but I always forget to bring them along, or I wait until they are expired. My new store doesn’t double coupons anymore, so the incentive is also less. TheGroceryGame also helps point out good deals.

Buy Frozen and/or Generic
Many times frozen fruits and vegetables are even more nutritious or tasty when you buy them frozen, because they can wait longer before picking them. Also, there’s always store-brand or generics. The article shares that the manufacturer of Birds’ Eye veggies also makes store-label veggies. I love my Safeway frozen mixed vegetables! :) Did you know that produce even has brands now? I didn’t even notice. I like to buy generic on many things, but not all of them.

Check Your Used Cell Phone Minutes For AT&T, Verizon, T-Mobile, and Sprint

Since the Sunrocket demise in July, we have been living with just a cell phone – no landline or VoIP – and it’s actually worked out pretty well. I like the simplicity. We haven’t had any overage problems, but I did tend to check a lot in the beginning to make sure. Here are some easy ways to to check your remaining minutes for several cell phone providers:

AT&T (Cingular)
Dial *MIN# (*646#)
AT&T Firefox plugin (might currently be broken)

Dial #MIN (#646)
Verizon Firefox plugin

Dial #MIN# (#646#) or dial 611 + say “minutes”
T-Mobile Firefox plugin

Sprint Nextel
Dial *4 or dial *2 + say “minutes used”
Sprint Firefox plugin (not currently working for me)

Then there is the Windows desktop application WatchMyCell, which logs into your online account page for you and tracks how many minutes you have left. It will even send you an text message or e-mail whenever you’ve reached your chosen threshold.

Now, all of these automatic methods will require your username and password. Although I’ve done some digging and found nothing obvious, I can’t be sure none of them are doing anything shady. I would at least change your password to something unique to the site. Personally, I just program the number as a contact. Let me know if I missed anything.

How Do You Budget For Holiday Spending?

Heard on the radio yesterday: “Hey people, there’s only 3 paychecks left until Christmas!”

The Holidays are coming! Black Friday ads are already being leaked. The new mantra is “Why not just buy it now?” You hear a lot of scolding about all the consumerism in response, but the malls always end up packed no matter way. Perhaps the best way to deal with this annual event is to simply budget for it? It’s not like these are surprise expenses – should it really matter how many paychecks are left?

The other day I was reading about a tiny credit union that my wife’s company partners with, and they offered a “Christmas account”. It’s just an extra savings account where you can put in regular deposits each month. My cynical side thought “How quaint… like anyone does that anymore.” Kind of like how layaway no longer exists.

Or does it? Here’s a poll exploring how people deal with the expected expenses of the winter holidays. Decorations, travel, food, gifts…

If a borrower is unable to repay her federal student loan, what steps can the government take to collect the debt?

View Results

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Marriage and Money: Allowances For Adults?

You and your significant other love each other. Still, I bet there is still something that one of you loves spending money on that the other simply doesn’t see any value in. It might be manicures, gadgets, designer clothes, online poker, or Star Wars collectibles. If you have joint finances like we do, this can cause some resentment. Why is our money being spent on Yoda PEZ dispensers??

One possible solution to relieve such stress that we are currently trying out is the Adult Allowance, where each person is given a certain amount of money that they can spend with no questions asked. I’ve seen it in a few places, including Him and Her over at Make Love Not Debt. No rolling your eyes, no passive-aggressive sighs, no exasperated “Why would anyone buy that?”. Actually, one annoying question from me is “Why didn’t you let me spend 10 minutes researching the best deal for your XXX purchase?” The idea of paying more than needed may cause me physical pain, but why should I let that ruin her purchase?

Yes, this is essentially budgeting, but many couples view budgets as tedious and restrictive. I see this as a specific subset of budgeting which focuses not just on the ability to track spending, but the freedom of enjoying your spending without guilt. This may be a good place to start if one of you is spender, while the other is a saver.

On a technical level, some people use cash in envelopes, while other use completely private and separate bank accounts. That way, after you run out of money there’s no going back for more. However, we’re keeping it simple and just tracking it on the honor system.

We mentioned this to some of our friends, and some of the responses were the expected “An allowance? Whoa, that’s harsh.” But one of the couples actually implemented it for themselves as well! It turns out that the guy was getting some flack for driving around his gas-guzzling 4WD beast around instead of the econo-box they also own. Now, he’s been given a monthly gas budget each month so he can still have fun, while she can feel that the gas bill is under control.

What do you think about adult allowances? Good idea for resolving potential conflicts? Or unnecessary for those in a good relationship?

The Average American’s Spending Breakdown

I’ve been trying to find a pie chart listing the spending breakdown of the average American to provide a frame of reference for our spending pie chart last year, and here is the closest I could find. It’s in terms of pre-tax numbers, and I added the percentages for clarification:


The chart was taken from an article by the Tax Foundation think tank, whose stated mission is to “educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government.” However, there is some argument about the accuracy of these numbers.

Note that there is no slice for Savings, as our savings rate is negative according to their calculations. :(

Our Spending Breakdown For The Last 12 Months

Several readers shared their own spending breakdowns in the comments of my previous post, so that inspired me to dig up the numbers for ourselves. I don’t have exact stats, and our income varies each month, but I did the best I could by averaging everything over the last 12 months. The percentages are taken from after-tax, or “take home”, income.


Quick explanations for each category:

Food is both eating out and groceries. Car means gas, maintenance, and insurance. Insurance means everything but car insurance: Health, Dental, Disability, Renter’s, and Umbrella. Utilities are all monthly recurring expenses like natural gas, electricity, trash, cell phone, VoIP, and water. Travel includes both visiting family and sightseeing. Savings includes both short-term savings for a house downpayment and putting away for retirement. Other is everything else – pet-related, clothes, gifts, donations, etc.

Things look pretty manageable for us right now, but soon our housing slice will probably double or more in size, and we have no kids right now, so the pie will definitely evolve over time. Of course, hopefully we’ll be earning more too. I also want to add life insurance and maybe better disability insurance to the mix soon.

This was an interesting exercise, perhaps just as illuminating as tracking your expenses for a month. Even if you guesstimate, you’ll likely end up with something that may inspire some change or simply reinforce your efforts so far.

Just like with my net worth tracking, I’m not here to compete with anyone else, I think we all have our own goals to work towards. However, feel free to comment with your own numbers.

Expense Tracking and Budget Results – February 2007

Yes, you read it correctly. It’s the end of March and I’m finally typing in the last of my receipts into my PearBudget spreadsheet. Tsk tsk.

Overall Results
I started out strong, with my carefully laid out Expense Tracking Plan of Attack (with all of 2 steps!), and my Mid-Month update. But then I started dreading the monotony of sifting through receipts. “I’ll do it tomorrow” are four very dangerous words.

My usual method for managing my spending is to simply consider each and every purchase before I make it. The main benefit of typing in these receipts over that is the ability to judge my progress and perhaps adjust my money “attitude” as the month goes on. Am I in thrift-mode or relaxed-mode? It gives you an reason to perhaps not splurge on that seemingly minor-item, either for yourself or as an explanation to others – “Oh, I’ve already spent to much on XXX this month”.

But I did finish, and I still think that everyone should do this if they are trying to improve their financial situation. The only two ways to get more money is to either make more or spend less. And the best way to spend less is to fully comprehend what you are buying.

Specific Numbers
I won’t share all the gory details, but here are some of the major categories. This is for two people:

February Budget Results

The first step of the budget spreadsheet is to put down the amount of money you want to budget for each category. If you have never tracked your spending before, you may be very surprised after the first month and need to make some adjustments.

We were actually pretty close in most of the categories. We could do better than $600 a month on food, but we consciously enjoy eating out and it is within our means. We bought some new ski gear and bought some gifts this month but nothing special, so I should probably bump up the allowance for the “Personal” category a bit more.

One surprise we did have was our heating bill. Old house + old furnace = $200+ gas bill! Even when we had electric baseboard heat in our old house our heating bills peaked at $100. Nothing we can really do about it now, but it’s something we should have considered it while browsing for rentals.

In the end, the only real thing I would change is to add more cushion into our budget for “expected” unexpected expenses that I’ve mentioned before. To that end, I think I’ll continue to try out new budgeting methods each month.

Americans Assess Their Saving Habits: Unexpected Expenses

Here is an interesting survey from the Pew Research Center – Americans Assess Their Saving Habits. A lot of the results are what you would guess:

  • Most people (77%) say they are always trying to save money.
  • Most people (63%) also say they aren’t saving enough.
  • Housing, cars, and utility bills are the hardest to afford.
  • Dining out, entertainment, and shopping are the most common areas that people splurge on.

What caught my eye was the section on unexpected expenses. About a third of adults say they had an unexpected expense in the past year that “seriously set them back financially.” Among this group, here is the breakdown of the top 4 most common expenses:


By these numbers, the average American this year will have:

  • 11% chance of having a significant unexpected medical bill, and a
  • 8% chance of having a significant unexpected car expense, and a
  • 7% chance of having a significant unexpected housing-related expense

My conclusion? Expect the unexpected. It’s only February and we’ve already had unexpected family-related expenses in 2007. I think an allowance for such occurrences should be included in our budgets specifically, and not just reserved as a reason to use the emergency fund.

Do you budget for the unexpected? Or do you just let it happen and deal with the ups and downs?

Tracking My Expenses: Mid-Month Update

I’ve been dutifully recording my expenses for two weeks now. Here are a couple of observations so far.

It really is simple and flexible. Just as I had hoped, this method is much less stressful that when I had to worry about synchronizing accounts online or reconciling debits and credits with personal finance software; Now I just have to dedicate about 10 minutes twice a week and type in single digit numbers into a spreadsheet. Just simple addition!

Budget Screenshot

You can see how much you have left as you go. By setting an goal for each spending category and updating every few days, I notice things like “hey, I already spent $115 eating out this week, I should cut back a bit”. It’s similar to the envelope or bucket method of budgeting, where you can only spend a set amount from each category, but not as strict.

Reminder: Track Your Expenses For A Month

Just a quick reminder that I’m tracking my expenses in February, and everyone with a similar inclination should join in the fun.

Here are the categories I assigned myself in PearBudget:

Regular Expenses – Housing, Phone, Cable, Internet, Garbage, Insurance
Variable Expenses – Gasoline, Electricity/Gas, Groceries, Dining out, Household, Personal Care, Pet Care, Recreation, Everything Else
Irregular Expenses – Car Repair, Travel, Gifts, Healthcare, Water/Sewer

My receipt spike is excited! I’ll check back in after a week.

My Expense Tracking Plan Of Attack! (Join Me?)

I fell off the budgeting wagon months ago, and haven’t been back on since. I’m still saving a good chunk of money each month, but it’s high time that I drink my own Kool-Aid and start tracking my expenses.

I haven’t been overly impressed with either Money and Quicken in the past, so I needed to find an alternative. After browsing through my big list of free budgeting tools, I’ve decided to try the PearBudget spreadsheet out first. It seemed to be the best candidate for me because:

It’s free, and it won’t stop working after 2 years, either!
It’s offline, so no worrying about importing files or syncing problems.
It’s flexible; I can update every day or once a month, whatever works.
It’s simple. I’m only concerned about tracking expenses. I don’t need any other features to distract me or take up more time.

In fact, there are only 2 steps that require any effort:

PearBudget Steps Screenshot

I just finished the first step today, which is name the categories you want to track and give some rough estimates. It really did only take 10 minutes.

To help me with the second step, I went out and bought one of those restaurant receipt spindles from OfficeMax for $2. My plan is to get receipts for everything, and whenever I get home to spear them all on the spike. Every day or two, I’ll empty the spike and punch in a few quick numbers into PearBudget. All tax-deductible expenses will be stored in a folder for tax time. Sounds reasonable, doesn’t it? I plan to start tracking in February. I invite anyone interested to join me and discover exactly how our money is spent during any given month!