Sunday, July 26, 2009

Saving your money...Best Online Savings Bank

A penny saved is a penny earned. ~ Benjamin Franklin

Ben Franklin was on to something when he said the quote above. Due to the recession, we are starting to understand the importance of saving money. Whether it be to survive during unemployment, or to take advantage of an opportunity that presents itself, having savings is a necessity. There is also the importance of making interest with that money.

There are many places where you can put your money. There are higher risk investments such as stocks and mutual funds that requires your money to be invested with the possible risk of the equities losing value resulting in a loss of money. There's also other investments such as bonds that offer less risk but typically requires your money to be tied up for a certain amount of time. For the average saver, a good interest rate and reasonable access to their money are the requirements for where their money resides.

Although there are many factors that are used for where most people decide to save their money, I personally keep my "savings" money in an online savings account.

Why Online Savings Accounts?

If you walk into your local bank branch, you will find that they offer savings accounts. These accounts are backed by the FDIC (Federal Deposit Insurance Company) and allow you more immediate access to your funds as well as the benefit of talking to someone in person in the event that you need to discuss the account. However, these accounts offer a very low interest rate. (0.1 - 0.3%) which defeats the purpose of saving the majority of your money.

Online savings accounts are also backed by the FDIC and have the benefits of having a much higher interest rate as well as reasonable access to the funds in that account. The typical three day delay of accessing your funds is usually a good deterrent to impulse buying, but is quick enough to get access to the money in the case that there is an emergency where the money is needed. The higher interest rate is the main benefit from having one of these accounts.

See below for an example of why a higher interest rate matters:

Bank 1
Bank of America "Regular Savings Account Interest Rate": 0.1% (Link)
Amount to Save: $1000
Years to allow the money to save: 20 years
Amount of money at end of 20 years: 1,020.19
Interest Paid after 20 years: $20.19

Bank 2
Ally.com "Online Savings Account Interest Rate": 1.85% (Link)
Amount to Save: $1000
Years to allow the money to save: 20 years
Amount of money at end of 20 years: 1,442.85
Interest Paid after 20 years: $442.85

Difference: $442.85 - 20.19 = $422.66

That is a $400 difference which helps to explain the importance of getting the best interest rate possible for your money.

Below are the different links to the websites of each of the online banks.


Although each of these saving accounts have individual pros and cons, the ultimate decision in deciding which account to choose is dependent on the individual saver. I recommend to go with the bank that has the highest interest rate because in my experience, most accounts typically have the same benefits as other online savings accounts.

As usual, I hope that you find the information in this blog useful. Please let me know your thoughts about your saving in the comments below.

Sunday, July 19, 2009

Frugal Fasting...the difference between investing and spending money on yourself.

“When the stomach is full, it is easy to talk of fasting” ~St. Jerome quotes (Father of the Latin church, 340?-420)

I was chatting with a friend the other day and topic of spending money came up. I did not think it could be done, but I believe I have finally met someone who is cheaper than me. While sitting in a local bookstore, we were looking at the food case and saw a Rice Krispy treat for $2.25. Now comes the dilemma? Do you buy the rice krispy treat or do you choose not to satisfy the urge for the tasty treat? Now to most, satisfying the urge for a rice krispy treat for around $2.00 is not a big deal, however, in light of recent times, most choose to do "frugal fasting".

Frugal Fasting as I define it is denying yourself something that you "want" because there is a cheaper alternative or you can just deal without.

I typically never spend any money on something that has a cheaper alternative or something I could do myself. After all, paying $2.25 for one serving of something that I can make a whole pan of for $2.50 just seems crazy. However, there are times where I make exceptions to these rules due to the fact that my health or my time may be worth more to me than the actual money that can be saved.

During the rest of the conversation with my friend, I kept asking myself a question as to how many people consciously make a decision to go without eating or eat poorly (such as the value meal at fast food restaurants) to save money rather than just pay to eat decent food.

I think about my college days as an example in my life where I did this constantly due to the fact that I did not have a lot of money. I'm sure there will be people that say fast food in moderation is no worse than anything else and there is value behind ordering from the value menu at most stores. However, I'm sure people would have second thoughts if they saw the movie "SuperSize Me". Thirty days of eating fast food wrecked the main character's body.

So the real question is, is it worth the investment to pay the money on every day items or should you go without to save some money? I think the answer is to go ahead and spend the money. Why? Well, as said previously, spending money on yourself is an investment. By eating higher quality foods, you can help you remain healthy over the course of your life. I have learned this by talking to one of my coworkers who only eats organic food. Although he pays more for his food than the non-organic counterparts, he told me that after switching his diet to totally organic, lost over 20 pounds over the course of a year. Amazing to see what eating food without all the additives can do for you.

In addition to that, in my current situation with renovating my investment house, I am finding that spending the money to contractors (over doing the work myself) has allowed me to be less stressed as well as avoid doing hazardous work. By no means am I trying to say that one should not try to save money where possible, however I believe that there has to be a balance. Is saving money worth putting your body through more stress? I say no.

I wonder what kind of damage I have caused to my body by applying "frugal fasting" to my purchases. There are many times where I have chosen saving money at the cost of sacrificing something else. However, I think that I will try to include more balance when faced with that dilemma again.

How often do you do Frugal Fasting? What items do you sacrifice daily for the sake of money? Where is your balance?

Stay Disciplined!

Sunday, July 12, 2009

Money Saving Tips Around the House

I like to think that I am very frugal in my everyday living. With this understanding, I have been keeping a closer eyes on my bills lately and have noticed that I have reduced the amount I have spent last year this same time. Now there are some extenuating factors that go into this reduction in the amount that was being spent, however, I have consciously attempted to reduce my bills by making smarter decisions around the house.

With everyone "Going Green" now these days, there are many that are coming to the forefront that enable you to save money around the house. Some require that you invest a bit into certain products, others just require that you change your behavior in your house. I want to share with you a combination of things that I have done around my house to reduce my energy usage and save money.

  1. Reducing the amount of electric light usage.
    • In my bathroom, I have a bathroom bar that has eight lights on the fixture. EIGHT LIGHTS! Are eight lights really necessary to light my bathroom...I think not. So instead of luminating my bathroom with all eight lights, I unscrewed every other light immediately cutting my energy usage from those lights in half. In addition to that, I am able to cut back on my replacement of those lights when one goes bad because I have four other lights currently not being used.
    • Whenever leaving out of a room, I usually immediately turn off the light. Even if I am going to come back to the room, I still make sure that the light is only turned on when I am in the room using it. In addition to that, I find that using natural sunlight (opening a window) is a free alternative to using lights during the day.
  2. Reducing the amount of air condition usage.
    • One of the best inventions in regards to air conditioning is a scheduling thermostat. Using this, I have been able to turn my air conditioning off when I am not at the house, but have my house cool when I return.
    • In addition to that, I typically keep my setting on the air conditioning to be somewhere near 77 - 80 degrees. Many people would call that "uncomfortable", however I find that it just takes time to get adjusted to it. Also, I typically only turn on my air condition at night when going to bed.
  3. Using alternative methods to cool your home besides air conditioning.
    • Surprisingly, the use of a ceiling fan cools the house well. The use of these fans allow air condition to not even be used during the cooler part of the day. Also, using a portable fan can be a good substitute if you do not have a ceiling fan installed.
  4. Investing in Compact Fluorescent Lighting.
    • I have made an effort to replace each light bulb that goes out in my home with a highly efficient compact fluorescent lightbulb. Although they typically have a higher up-front cost, these lights tend to pay for themselves within the first six months of use.
    • In addition to that, albeit very small, CFLs emit less heat than regular incandescent light bulbs. For more information about these bulbs, check out the Energy Star website.

In June 2008, I paid my electric utility company $125.67. However, this year, I ended up paying $81.92. Saving $40 in one month makes a large difference because that type of money can be better reallocated to other bills or even be contributed to a savings account.

I hope you find these tips useful. If you have any other tips that you use to save money around the house, please leave them in the comments below. Stay Disciplined!

Monday, July 6, 2009

The Best of Pamplona Finance (so far)

Sometimes it is good to sit back and review what you have already done. It is good motivation to keep pushing forward. Even "It's Easy As P.I.E." has the evaluation stage where it is important to evaluate your plan make sure you are still on track.

Below are some of my favorite articles written by the Pamplona Finance Group in recent months.


To all of my readers, I want to say thank you for your support in lending me your attention for a few minutes out of your week. I hope that you find the blog articles informative as well as useful.

As usual, if you have any topics of what you think I should write about, or would like to submit an article to post on the blog, please email me. Also, your honest feedback is also welcomed! I want to do my best to make this blog as useful as possible for you.

Stay Disciplined!