Late in 2006, ING announced to its ING Direct Savings customers the Electronic Orange checking account. It takes free checking a step further and actually pays at least 3% interest on your balance, however small.

Could high yield checking accounts be the future of banking?

True, Electronic Orange is a paperless checking account, meaning you can’t get physical checks in the mail. But I don’t know about you, but for me that is becoming less and less of a problem. With online bill paying, the only check I write each month is for my rent, and I’m willing to bet if I really wanted to I could convince my landlord to let me pay him electronically.

And those archaic checks aside, ING offers everything else you would expect from a checking account, most importantly free ATM access and a MasterCard debit card. They also provide bill paying and electronic check writing services for free.

If you’re a big spender, the interest rates are just as good or better than most high yield savings accounts (5.30% APY on every dollar for balances of $100,000 or more and 5.05% APY on balances between $50,000 and $100,000). For everybody else, it’s 3.0%. Still, that’s a heck of a lot better than what I currently earn on my checking account…Zilch!

As of right now, you first need to be an ING Direct savings customer to sign up. But if you haven’t done so already, there’s no reason not to grab an ING Direct Account an earn an instant 10% return on your money. (You get a $25 bonus when you open an account of $250 or more). So open an ING Direct account now and then sign up for their high yield checking account to start earning returns on your checking balance!

Feb 15th, 2007 by David Weliver in Budgeting, Saving
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Student loan consolidation is one opportunity I failed to take advantage of when I should have. Though student loan debt is typically considered “good debt” (because it shows an investment in your future) and interest rates are lower than other loan categories, rates can still go up over time, and student loans can be a burden if you have more than one. Read more…

Feb 12th, 2007 by David Weliver in Debt Help, Education
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It’s that time of year again when third-grade arithmetic can lead to panic attacks and thoughts of sacrificing ourselves to a pack of ravenous ostriches.

That’s right, it’s tax time, and to help you keep your sanity, MoneyUnder30.com has devised the best ways to stick it to the Internal Revenue Service this year.

Don’t just screw ‘em, screw ‘em hard.

10. When filling out your 1040, have the IRS refer to schedules 1-146C to find your information.

9. Send the IRS a bill for the processing expenses you saved them by filing electronically.

8. Fill your tax return envelope with body glitter and perfume. (The auditor’s wife will love it!)

7. List your redneck brother as two-thirds of a qualified dependent, because, let’s face it; he depends on you when he’s drunk, about two-thirds of the time!

6. Write “numbers are against my religion”. (You could actually start a church believing this and you would be tax-exempt anyway).

5. Find a reason to deduct every single penny you spent last year. (Then get your passport ready).

4. Bury your tax payment in the woods and draw a treasure map.

3. List all figures in Chinese Yuan. One Chinese Yuan = 0.129038918 U.S. Dollars. That’ll keep ‘em counting.

2. Indicate you want your refund wired to your account in Grand Cayman.

1. Subtract 10% of the taxes you owe for the government spending you did not previously authorize!

Feb 12th, 2007 by David Weliver in Taxes
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Even if you’re already saving your money in multiple accounts, for example in a 401(k), IRA, and personal savings account, adding on additional accounts can be an easy way to reach your savings goals faster without even thinking about it.

With the great annual interest rates and deposit bonuses offered by leading online savings accounts (compare high yield savings rates here) it’s silly not to start a new account!

I keep my money with ING Direct, which allows me to divide my savings account into multiple segments so I can save towards different goals at once!

1. Vacation – Vacations are for relaxing, don’t stress out over how you’ll afford it. Put aside $48.08 a week towards your next trip of $2,500.

2. Christmas – The holidays always sneak up on your wallet. Avoid a New Year’s spending hangover by popping $19.23 into an annual holiday spending account of $1,000.

3. Auto Maintenance – If your car is like mine, it will break down when you can least afford it. Be prepared for your next $500 repair by saving an additional $9.62 a week.

4. Weekend Escape – Spontaneous weekend trips are the perfect way to escape your routine. But just because the trip is spontaneous doesn’t mean the costs have to be. Try $11.53 weekly to plan for two $300 weekends a year.

5. Spending Splurge – Shoes, golf clubs, video games, jewelry; everybody has a weakness. Plan for a quarterly $400 splurge by saving $30.77 each week.

6. Moving – Whether you’re planning a move or not, expenses can add up. Make sure you have some cash on hand to cover movers and furnishings for your new dig. Just $7.70 a week will cover a $2,000 move every five years.

7. Taxes – Though it feels good to get a big refund check from Uncle Sam once a year, it’s better to owe the tax man because it means you can collect interest on that money in the meantime. Short your withholdings a bit throw $11.54 a week into a savings account instead to cover a $600 tax debt at year’s end.

What does it all cost? It would take $138.47 a week (or $600.04 a month) to save for all of these things. If that seems like a lot, consider the fact that these are things that you are likely paying for anyway, only you may be pulling money from other sources, or even going into debt to cover them.

But by saving a little every week, you’ll not only get the things you want for less, you’ll have something to show. That $7,200.48 you’ll save in a year will earn you $324.02 in interest at 4.5%. That’s another weekend getaway, a several nice dinners out, or a nice contribution to a bigger savings goal like a house or retirement!

Ready to get going on your many savings goals? Get that 4.5%, a $25 deposit bonus, and the option to create multiple savings accounts today at ING Direct! Open an account in five minutes now.

If you liked this article, check out some other articles on saving and budgeting from Money Under 30.

Feb 9th, 2007 by David Weliver in Saving
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Maybe you just got your first credit card, or are retraining yourself to use credit responsibly after getting out of debt.

Personal finance writers, myself included, love to focus on credit card abuse and the difficulties it can cause. But credit cards are also a powerful tool that can make managing your money easier. Read more…

Feb 7th, 2007 by David Weliver in Credit
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Recently I wrote about my positive experience getting a personal loan from Prosper, a peer-to-peer lending service. Read more…

Feb 5th, 2007 by David Weliver in Credit, Debt Help, Personal Finance
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Last October I wrote that I had applied for an $11,500 debt consolidation loan from the unique person-to-person lending network Prosper. Here’s an update to how this amazingly cool service has helped me. Read more…

Feb 1st, 2007 by David Weliver in Credit, Debt Help
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If you’re like me, you have probably been tempted by the miles rewards credit cards like the Citi AAdvantage Card or the Delta SkyMiles Card from American Express. The bonus miles you receive upon approval alone might be enough to bump your next cross-country flight to first-class. Never mind the miles you’ll rack up for everyday purchases and business travel. But what about that annual fee, which can range from $30 all the way up to $395?

A credit card annual fee used to be a necessary evil – the price you paid to get anything from your credit card other than the privilege of deferring payment for 30 days (hopefully no longer). But today cards like the Miles by Discover Card, BlueSky from American Express, or Citi PremierPass offer rewards for purchases without an annual fee.

What exactly, does the annual fee buy you?

Slightly “better” rewards, to be exact. The difference between the Citi Premier Pass (no annual fee) and Premier Pass Elite ($75 annual fee)? Both cards get you one point for every $1 spent and extra miles for every mile flow. The Elite Card gives you double points at select gas stations, supermarkets, and drug stores and gives you the option of getting a free companion airline ticket with every fare $299.00 and over. The enrollment bonus varies, also; Elite card members will score an additional 10,000 bonus miles.

In the Citi PrimerPass example, it’s obvious that if once a year you would use the free companion airfare feature, you would save more than the $75 annual fee. What about other cards? For purely points-based programs, ask yourself how much spending (and how much free flying) you’ll do.

The value of credit card points varies depending on how they are redeemed, but we can assume they are valued at about one cent each. If you earn 1 point for every $1 spent and spend $25,000 you may have a free ticket worth about $500. Definitely worth an annual fee of $75. But do you charge at least $2,000 a month on your credit card? Probably not. If you only charge $500 a month, you’ll have 6,000 points at year’s end, worth about $60. You’ll have ended up loosing $15 to the annual fee.

Of course, this example assumes you pay off your balance in-full every month. If you don’t, forget the annual fee, any rewards you’re receiving will be eaten away by finance charges. For this reason, credit cards with annual fees tend to have high interest rates. If you’re looking for a credit card to carry a balance, never pay a fee! Check out my article on credit card balance transfers for some tips.

Want to get the perks of an annual fee credit card without paying up? You have a couple of options. Most cards offer the first-year fee-free. You should be able to apply, use the card for a year to rack up the points, and cancel before the fee comes due. Just remember that both opening a credit line and canceling one put a slight ding in your credit score. The other route? Call up your card company and ask to waive your fee. It may not work with all cards, but most companies want to keep your business and will make concessions if you ask.

Looking for a no annual fee rewards card? Check out my recommend credit cards.

Jan 29th, 2007 by David Weliver in Credit, Personal Finance
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With all the great personal finance blogs available, you might think the last thing the Web needs is another list of money rules written by some nerd trying to change his spending habits. Maybe you’re right, but here are my Six Simple Laws of Personal Finance Under 30 anyway.

They’re for myself and for everybody else out there struggling to get ahead. They’re simple, they’re blunt, and they’re aggressive. I still break them from time to time, but I’m working on it.

1. Spend much less than you earn.

2. Do whatever it takes to get out of debt.

3. Put your savings accounts on autopilot.

4. Give back.

5. Set goals, and discover what it will take to get there.

6. Improve yourself, improve your earnings, improve your life. Never settle.

Dec 8th, 2006 by David Weliver in Personal Finance
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What role does personal finance play for college students? In part three of the Money Mistakes We Make Growing Up series we look at the personal finance mistakes college students make, and how to avoid them.

It’s no secret many college students lead free-wheeling, sometimes reckless, lives. The dangers of this lifestyle are real; we are too frequently reminded by stories of alcohol-related behaviors shattering lives—or ending them. Despite the risks, a pounding head is the only consequence most students feel from another late night.

But another epidemic is targeting college students and threatens consequences not for a night or a year, but for five, ten, even twenty years. That epidemic is credit card debt.

If somebody asked me: What should I know about personal finance while I’m a college student? I would simply say: avoid going into credit card debt, and the rest will take care of itself. That’s why credit card debt is the one and only college money mistake this series features*.

Money Mistake: Carrying a credit card balance.

Credit card banks are eager to load up ignorant freshman pockets with plastic. Just head to any university in September and take note of the credit card offers plastering bulletin boards, student workers giving away swag in exchange for a credit application, even student phones ringing off the hook with telemarketers’ credit offers.

The result? Tens of thousands of students with little or no income but plenty of uses for money suddenly have thousands of dollars of credit. Most have never had to be financially responsible in their life. It’s free money, Baby.

While carrying a credit card balance is never an ideal situation, there are times in life, I think, when it is acceptable, such as investing in clothes or housing for a job or making ends meet during an emergency if you don’t have an emergency fund. But using credit cards to live beyond your means is never okay. In fact, it is catastrophic.

So why is Joe College in so much trouble? The same reason the credit card banks know he’s profitable. If he maxes out a card for a trip to Cancun freshman year, chances are he’s not going to make enough income (being a full-time student) to pay it off anytime soon, so he’ll be making minimum payments, barely touching the principal of his debt but lining the bank’s pockets with finance charges. Even when he graduates, Joe’s entry-level salary will be barely enough to eat on, let alone pay down his debt, and the bank will keep on collecting.

It’s hard not to spend money in college. There are a million things to do, plenty of time to do them, and often a vast separation of wealth between peers. In the real world, neighborhoods – sometimes even public schools – are more or less segregated by economic status. In college, however, some freshmen arrive on a scholarship and a 30 hour-a-week job to pay for food and books, others roll onto campus in their high school graduation present unloading flat-screen TVs and leather loveseats. The next day they’ll sleep across the room from each other and share classes and meals. For students of lesser means, avoiding the temptation to want what others students have is very, very hard.

Yes, college is a time to have fun, but it’s also a time to set yourself up for success. For some, this mentality comes naturally, others will need to work at it. The willpower to stick to your budget in college isn’t unlike the motivation it takes to hit the library on a sunny Saturday. The sooner you learn to make sacrifices now for benefits later, the richer you’ll become.

This article is from the Money Mistakes We Make Growing Up series.

*Numerous other topics including budgeting, saving, taxes, income sources all present unique challenges for students. I don’t mean to overlook them here, but within the scope of this series I felt credit card debt was the single most important issue to address.

Dec 8th, 2006 by David Weliver in Personal Finance
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