A while back I wrote about how to budget for a bi-weekly paycheck. The best part of getting paid every other week is the same as the problem with it… the consistency.

From one point of view it is great to know that every two weeks you will be getting another paycheck. Every 14 days, like clockwork, your bank account is filled up. But that is also the downside.

Your monthly bills do not always line up with your pay dates. Let’s say you have a large bill due on the 15th. One month your paycheck might land on the 13th and another month it could be the 17th. Regardless of the day you get paid your bill will still be due on the 15th.

This can get you into trouble those months where your paycheck comes after the bill is due. It is very hard to budget, especially to create an automatic budget, when there is no consistency of the due dates to the pay dates.
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Happy Independence Day everyone. I pray you all have a great holiday as we celebrate our right to freedom.

Tip 1: Is it Automatic?

In my mind, a budget is never good unless it can run by itself with little to no required input each month. After my budget is set up, I just want it to work. In an effort to reach this perfect state, I advocate setting up automatic bill payments to pay your bills online, automatically, at a scheduled times.

The more that can automate the more worry free –a better the chance for success- your budget will be. However, once your budget is set, you need to ask yourself… “Is my budget really automatic?”
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Matthew 6:24
No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other you cannot serve God and wealth.

The message couldn’t be much clearer. God or money. It is a choice each of us must make on whom to serve. Money should never be elevated to such a high position in our lives that it begins to take the place of other things. Money can be a great tool. After all, we really can’t live without it. The trouble comes when we value it more then anything else.
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“The best free way to manage your money.” …or so they say.

For those of you who haven’t heard, Mint.com is a free web site that helps you organize your finances. We “download, categorize, and graph all of your finances automatically every day” is the claim on their homepage. I was intreged so I signed up for an account, its was free after all, and gave it a spin.

Creating and setting up an account was easy. The interface for adding your financial accounts is streamlined and very intuitive. And once your information is in Mint provides a variety of information on your money.
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A draw back to budgeting is there are always expenses that come up unexpectedly -or they were expected and forgotten- every year. The difference between being prepared for these expenses or not can be the difference between a having the money to pay your bills or going broke. Below are three tips to save for three types of unexpected and unusual expenses.
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Everyone wants to have a good credit score. A good score can be the deciding factor in getting a mortgage, getting a loan, and sometimes even for getting a job. With the current state of our economy it is more important than ever to manage your credit score.

There are a lot of things that you can do to increase your score. But you need to be careful, as other things that you do can hurt your score. Some things that negatively affect your score are obvious, like not paying your bills, but other things are more subtle.

So without any more ado, here are some things that will hurt your score.
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I’m sure you have seen the comercials. A little kid being told to ride a bike, but then stop from going more then a foot or two. A boy given a toy truck to play with but having it swept away and replaced with a cardboard version shortly after. The point of the commercials is to say that even children know that this kind of behavior is wrong, so why don’t banks?

These commercials are for a new kind of bank in town, an honest bank. They claim no monthly fees, no minimum deposits, no minimum balances, and their fine print is couple font sizes greater then other banks.

Who Are They?
The bank is called Ally. Technically they are not new, they have been around for awhile under a different name. GMAC just recently rebranded itself and emerged under the new name Ally Bank. Part of the reason for the name change is no doubt to put some distance between them and there old relative General Motors -which I am sure you have all heard by now, is not the most trusted company to be associated with these days.

The fact that this bank could be looked at as GMAC just with a sneaky new name shouldn’t bother anyone though. While GMAC used to be owned by GM, they were sold off awhile ago and are now quite separate entities. But, as the saying goes ‘its all in the name’ so GMAC re-branded itself as Ally Bank. And with the name change came a new philosophy, a philosophy of treating customers fairly.

Why Should We Care?
Apart from it being very refreshing to have a bank that whats to be honest, Ally has two products that I think will be of interest. First is there online savings account and their one year certificates of deposit.

Online Savings Account
Ally’s online savings acocunt has some pretty good perks. The best however is that the current interest rate is 2.05% APR (June 11, 2009). That is definitely higher then the norm these days. Some of the others include:

• $0 to open
• No minimum balance
• No monthly fees
• Daily compounded interest
• FDIC insured

I was surprised to see that Ally also had listed, very clearly on their online account overview page, that you only get 6 withdraws or transactions per statement cycle. This might sound like a big drawback, but it is not. Being limited to 6 transactions per cycle is actually a Federal law. This law limits electronic and telephone transaction to only 6 per cycle. So all banks, by law, can only allow up to 6 transactions. The difference between other banks and Ally is that Ally clearly states this while others hide it in the fine print.

One Year CDs
I said in my post about laddered savings that CDs are great for storing your emergency fund but that they need to be handled correctly because of the fees that you get hit with if you pull out early, like if there is an emergency and you need the funds. Ally Bank does away with this concern by offering no penalty CD with an APR of 2.30%. No minimum balance required and no penalty for taking the money early. So if you are looking for a good place to keep your emergency fund you might want to check out Ally Bank and look into their no penalty CDs.

Other Products
Ally also offers a classic certificate of deposit, there are fees on this one for early withdraws, but at 2.49% APR, you do stand to make a bit more interest if you don’t have an immediate need to withdraw the cash. A money market account is also available with 1.90% APR that includes a check card. Additionaly, as with all of Ally Bank’s products, there is no minimum to open, no minimum balance, and no monthly fees.

Tell Me More
On the account creation page it states that it will take only 10 minutes to open a new acocunt. In actuality, I would say it took less time then that.

Another nice feature was that, when you open and account, you can actually open multiple savings accounts and certificate deposits all from one screen.

Conclusion
From everything that I have seen and read, I am sold on Ally Bank. The no minimums, no opening balance, and no monthly fees are all a great plus, but so is having a bank that discloses it’s fees up front in a readable font size. They are fully FDIC insured so there is no risk to loosing your money as long as you keep your balance under the $250,000 limit. Oh, and them having higher-than-average-rates don’t hurt either.

I would highly reconmend you check them out at Ally.com

Matthew 19:21-26
Jesus said to him, “If you wish to be complete, go and sell your possessions and give to the poor, and you will have treasure in heaven; and come, follow Me.” But when the young man heard this statement, he went away grieving; for he was one who owned much property. And Jesus said to His disciples, “Truly I say to you, it is hard for a rich man to enter the kingdom of heaven. “Again I say to you, it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.” When the disciples heard this, they were very astonished and said, “Then who can be saved?” And looking at them Jesus said to them, “With people this is impossible, but with God all things are possible.” Continue reading →

How much money do you save? How much do you live on? Give away? Have you ever thought about it?

How about the 10/10/80 plan. You might have heard of this the other way around, 80/10/10. This is where you spend 80% of your paycheck on bills and living expenses, 10% goes into savings, and 10% is given away. I, however, prefer to look at it my way… in order of importance. Continue reading →