The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

January 20, 2010

Price Wars over Cell Phone Service heating up

Filed under: News Review, Real Example — Tags: , , , , — thebalancedspreadsheet @ 3:06 pm

Have an unlimited voice or text plan for your cell phone?  Well according to an article in CNNMoney.com it looks like you might be getting a price break on your monthly service.  Verizon and AT&T have announced lower prices for their monthly plan and Sprint Nextel and T-Mobile are expected to follow suite.  This is good news for those looking to shave some money off of your monthly budget and getting some extra cash flow for debt payments.  We personally have Verizon so we might be taking advantage of the price wars soon.  I love it when price wars occur because usually that means the customers win!

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December 18, 2009

79.9% Credit Card? Who would use that?

Filed under: News Review, Personal Finance — Tags: , , , , , — thebalancedspreadsheet @ 2:56 pm

I came across this article from the AP this morning while browsing the web titled Credit card’s newest trick: 79.9 percent interest.  It is about First Premier Bank and how it is marketing the expensive credit card at 79.9% APR.  It is marketed toward subprime customers who can not get a traditional credit card.

There are some interesting quotes and figures in the article.  The cards credit limit is only $250-$300 but the annual fees are currently $256 in the first year!  Although starting in Feb 2010 the fees will drop to $75 in compliance with the new credit card regulations.  With all that being said this quote really got me:

“Even when the cost of credit is astronomical, for people in true emergencies, it’s much better than not having access to credit,” said Odysseas Papadimitriou, CEO of CardHub.com.

If you have read this blog for any length of time, you know that I am pretty much anti-credit card.  With that being said, I can not believe that quote.  They would be better off to continually get ripped off with high fees and interest rates then to not have access to credit?  Well how much of a blessing has their credit been so far?  It has lead to defaults and higher interest rates!  Unbelievable!  People who have shown the inability to handle credit should not be extended more!  To me this is just another example of the poor being taken advantage of, similar to pay day loans.  Now granted the people who sign up for this card did have a choice before filling out the application and they should be held responsible for their debt, but to me you have to have some kind of moral responsibility as a business to not market this stuff.  Sadly the reason they do market this junk is because people use it and it is profitable.  I think we just need to educate more on how bad of a product this is and how it is not beneficial to consumers in the long run.

Well there’s my soap box.  Anybody else have any thoughts on this?

October 22, 2009

The Rising Cost of College Tuition

Filed under: News Review, Personal Finance — Tags: , , , — thebalancedspreadsheet @ 11:14 am

The AP ran an article Tuesday, citing date from the College Board, on the rising cost of college tuition.  As someone who paid for school themselves without incurring any student loans, I am always curious to see how much college cost is running these days. As well as how much student are borrowing to pay for their education. 

Some of the more notable quotes:

“Average tuition at four-year public colleges in the U.S. climbed 6.5 percent, or $429, to $7,020 this fall as schools apologetically passed on much of their own financial problems, according to an annual report from the College Board, released Tuesday. At private colleges, tuition rose 4.4 percent, or $1,096, to $26,273.”

“Still, this year’s increases were bad news for the estimated one-third of students who do not receive grant aid and must pay full price.”

When I graduated in the spring of 2004 my tuition was about $6,000 for my senior year.  So $7,000 a year for public college in 2009-2010 sounds about right.  Also that means private school is about 3.75 times more expensive then public.  Unfortunately with these price increases, more borrowing for college has occurred.

“Meanwhile, students also borrowed more to pay for college — but much more from the government and much less from other lenders such as banks. After years of expansion, private borrowing collapsed from around $24 billion in 2007-08 to less than $12 billion last year, the aid report estimated. “

“On average, about two-thirds of bachelor’s degree recipients borrow money, and their median debt is about $20,000 by graduation.”

Obviously I am not a big fan of student loans or debit in general.  To see 2 out of every 3 undergrads with student loan debt before they land their first professional job is troubling especially since half have $20,000 or more.  That does not seem like much of a blessing, but more like a curse.  Going through undergrad debt free is very possible if you do things the right way. 

As somebody who is hoping to have children that go to college someday this article is kind of scary.  To think how much college is going to cost in 20-25 years is pretty mind numbing.  The key though is planning ahead.  If you are able to start early enough with college funding the financial blow is not as hard as somebody who starts when their child is 16. 

Reading the whole article just makes me glad I went through college when I did without any debt. This allows me to be able to enjoy the fruits of my labor without any payments and no more worrying about increased tuition costs. 🙂

August 21, 2009

Shoppers having second thoughts?

Filed under: News Review, Personal Finance — Tags: , , , — thebalancedspreadsheet @ 5:21 pm

An article today by the AP titled “More shoppers thinking twice in the checkout line” highlights the importance, in my opinion of having and sticking to a budget

They’re [shoppers] leaving sweaters in the dress department, dumping cookies near the grocery cashier and waiting until the last minute to judge needs versus wants. Online, shoppers are consumers are abandoning their virtual carts as they search for better deals.

Customers are asking cashiers to provide a total while they’re still scanning items to see where they stand, or to have necessities like health care basics scanned first, said Dan Fishback, chief executive of DemandTec Inc., a retail technology company. When they hit their limit, they forgo what’s left in the basket.

Now I am certainly all for focusing on needs and not wants in addition to spending what is in your limit.  But with that being said, shouldn’t you have an idea of what you can afford before you get into the store?  Having a budget allows you to do that.  When my wife and I sit down at the beginning of each month and do our budget, we know then exactly how much we are going to spend of food, clothing, entertainment, etc.  Some may say this is constrictive, but I say the opposite!  I find that knowing how much you are going to spend before the month begins frees you and allows you to enjoy your purchases and not wonder in the back of your head if you can really afford this or not.  Overall I think it takes discipline to be able to say no at the checkout, but it takes even more discipline to create a budget and stick with it.  And discipline is the key to financial success.

August 19, 2009

401(K) Contribution Increases

Filed under: News Review, Personal Finance — Tags: , , , — thebalancedspreadsheet @ 1:26 pm

I found a refreshing article on CNNmoney about the increase in 401(K) Contributions in the 2nd Quarter of 2009.  The article is a week old which I know makes it ancient history, but I want to highlight a few points.

“For the first time in a year, more workers increased the amount of money they put into their 401(K) accounts during the second quarter than decreased their contributions, according to a report issued Wednesday by a retirement fund manager.”

There can be many reasons for the decreased contributions during the past year, mostly fear by investors of putting their money into the market when it is nose-diving, paying down debt, or fear of job loss.  However, I think this is a great time to be putting more money into a 401(K) right now.  The markets are trading around 6 year lows, meaning that you might never be able to buy funds at these lows prices again.  You can kind of say the market is on sale right now so buying low means buying more shares.  Also in the short term, the markets have increased sharply.  Since March 9th the Dow Jones, Nasdaq, and S&P 500 are up 40.8%, 54.1%, and 46.3% respectively!

“Fidelity said the average 401(k) account balance rose 13.5% in the second quarter to $53,900. The increase was primarily driven by the rally on Wall Street, but higher worker and employer contributions also contributed to the rise, the company said.”

After about a year of double digit losses this was refreshing to see.  It was great each month when I was doing our net worth to actually see our 401(K) in the black for the month!  Personally, when you combine the increase in Wall Street and the contributions to my account, my 401(K) experienced about a 33% increase in the second quarter.

“Workers who maintained a long-term point of view are being rewarded with a nice recovery in their account balances,” said Scott David, president Fidelity Investments workplace investing division.”

I think this is a great quote.   By definition investing is having a long-term point of view.  Although my returns made my 401(K) look like a 201(K) the past year and a half, I know I have at least 30 years until I will need to use my money.  This perspective allows one to be able to be calm through this economic turmoil.

August 13, 2009

Debit rewards up, while credit rewards down

Filed under: News Review — Tags: , , , , — thebalancedspreadsheet @ 8:12 pm

I came across this article today titled “Rewards Shift”. It is an interesting article focusing on the increase in debit card reward program usage while also noting the decrease in credit card reward program usage. This is good news to me personally because I am a big proponent of the debit card and do not use credit cards. Currently I have a reward checking account with Charter bank out of New Mexico that pays 4.01% APY provided that I use my debit card 13 times a month. It will be interesting to see in this current economic climate if this will continue. Debit card use is on the rise so it would be nice to see the banks offer some sweet offers to gain your business.

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