Broke-Ass Student

Financial Literature and Other Resources

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

Today I set aside the earlier bulk of the afternoon to take a field trip to my library and stock up on reading material. Here are some of the treasures I extracted.

Currently Reading:

• "Smart Women Finish Rich" by David Bach
• "The Richest Man in Babylon" by George S. Clason
• "The Millionaire Mind" by Thomas J. Stanley

Currently on Request from Scattered Local Branches:

• "The Millionaire Next Door" by Thomas Stanley & William Danko
• "One Minute Millionaire" by Victor Hansen & Robert Allen
• "The Bogleheads Guide to Investing" by Taylor Larimore et al.

What I've Finished Reading:

• "The Total Money Makeover" by Dave Ramsey
• "Young, Fabulous and Broke" by Suze Orman
• "The 9 Steps to Financial Freedom" by Suze Orman
• "Rich Dad, Poor Dad" by Robert Kiyosaki
• "The Automatic Millionaire" by David Bach
• "The Road to Wealth" by Suze Orman
• "The Courage to be Rich" by Suze Orman

I also curled up in a comfy chair in the corner for an hour and browsed through some articles in Money Magazine, Kiplingers and Business Week.

I ♥ my library.

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Manifest Wealth Through Creative Perspective. What Type of Reality Are You Creating?

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Baby step #12 - Concentrate refocusing energy on current blessings and wealth, as opposed to breeding negativity by focusing on what you believe you lack.

When one continually feels a certain way, they believe it and consequently create a reality for themselves.

I can’t do it. It’s too difficult. I’m not sure. I’ll never be able to. I can. I’m able to. I will succeed, and this is how.

To believe you’re poor and impoverished will create a similar reality. However, if you recognize how extremely wealthy you are (through good health, family, friends, love, laughter, career satisfaction, experiences, and memories), you start feeling an enhanced sense of gratitude for every blessing in your life. By becoming satisfied in other areas, you also willingly invite further wealth into your life through positive energy and emotion.

What type of reality are you currently creating?

Manifest Wealth Through Positive Reinforcement

There is much more to accumulating wealth than mere dollars and cents or calculating figures and spreadsheets on a table. It’s a deeply rooted spiritual and emotional mindset. Mentally, we may find ourselves caught up in the wrong endeavors. Instead of focusing on the blessings in our life and expressing gratitude for the necessities we have, we tend to obsess over what we feel we lack. This creates a destructive mental chain of misery – which in turn manifests dissatisfaction, greed, and the insatiable desire of never having enough and always wanting more. Through recognition of our blessings, see how leading a happier life has never felt so simple.

It only takes a quick glance through some of the past articles posted this week (such as the corruption of wealth) to receive a glimpse of the tragic burden wealth has brought upon some individuals (most notably, lottery winners who fell into unexpected earnings.)

But the money itself isn’t the problem here.

These individuals appeared mentally unprepared to cope with the huge influx of money that suddenly befell them. Spiritually they were unable to assimilate money into their lives in a positive fashion, and their wealth spiraled out of control. It festered into an excruciatingly chaotic and destructive force. Some of these individuals may have forgotten to respect and appreciate what they had previously, or perhaps it was a lesson they never learned to begin with. By failing to respect the unexpected gift of wealth, they weren't able to utilize it in a beneficial or enlightening manner. It deteriorated their lives.

Gratitude For Every Penny

Because money is such a powerful universal force, it demands immense respect. But consider your own habits. Are you respecting your income properly?

Do you currently feel appreciative and satisfied with what you have? Are you consciously aware of your expenses? Is your money thrown all over the place in disarray and crumpled in your wallet, or is it neatly folded together? If you searched through your home, would you find enough change in your cushions to service a Laundromat for a month? Are you making irrational purchases without realizing where portions of your paycheck are being funneled?

One of my best friends recently bemoaned to me how she had no idea where her money was draining away to. Christmas had come and gone, of course. But she anticipated the expense and prepared for the holidays by budgeting for gifts. She didn’t believe that was where the problem lay.

I asked her to briefly walk me through one of her days. Besides regularly buying food at work, she suddenly realized she also spent over $1 on bottled water at the gym almost every day. Surely an insignificant purchase, she mused?

When we calculated the expense of the bottled water alone, we were shocked to realize she was spending over $350 a year on just water at the gym. That’s almost $1,000 over a three-year period. It suddenly dawned on her that it would be more practical to bring a thermos and fill it herself at the water fountain. She realized she could more wisely utilize that money, and scoffed at her ineptitude in just that tiny little area. She also realized how easy and cost-efficient it would be to bring lunch to work more often.

But, ironically, a trivial bottle of water began to represent a foolish expense that wasn’t in line with my friend's personal goals. From that day forward, it became a trigger point. A seed was planted in her mind that blossomed into a conscious awareness of how she was choosing to spend every portion of her money.

I am pleased that my friend, who used to be extremely intimidated by personal finances, (the mention of the stock market would literally send her running and squealing), is now willing to learn about retirement funding and proper investing. She has found a wiser approach on how to respect her money further. For the first time, she is taking firm control of her personal finances instead of allowing them to control her.

Mentally walk yourself through a day or two of your normal expenses. What careless spending will you uncover?

For those still unconvinced of their inherent wealth and would rather look at their concrete net worth, take a peek at how well you rank with the global wealth rich list. Were you surprised?

~†~ Baby Steps are Key ~†~

Manifest positive emotion through continued gratitude - recognize and respect your blessings

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Online Bank Savings Account Rates & iGObanking Customer Service and Security Enhancements

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

Here are current rates of some online savings accounts, as of January 23, 2007.

iGObanking    5.30% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

Grandyielddirect 5.27% APY ($1 to open, no minimum fees, FDIC insured, compounded daily)

E*Trade    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

EmigrantDirect    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

HSBC Direct    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

ING Direct    4.50 % APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

iGObanking Customer Service and Added Security Measures

Since opening an online savings account with iGObanking roughly a month ago, I have been very satisfied with their customer service. Last week I transferred a small amount from my local checking account into my iGObanking savings account. The transaction took approximately four business days, and I received two complimentary emails during the process to reassure me of the status on my pending transaction.

iGObanking automatically logs your IP while signing up. It asks if you'd like to set that particular computer as your 'default'. This means if you log on from a different computer, the iGObanking online system will recognize the foreign IP and take security precautions by asking additional questions upon login. I know many people who still feel wary of using online banking in general. I feel, therefore, this is actually a benefit for additional peace of mind.

Uhh, until I found myself locked out of the system - and my account.

I logged onto the iGObanking site from my work computer a few days ago. The system didn't recognize the computer I was trying to access my account from. It prompted me to answer security questions I had been asked during the initial signup process (three in total). Except, bugger me if I couldn't remember the answer of the last one. One time, failed, twice, three times ... bam! I received a message that, after four unsuccessful login attempts, my account was now locked. I would need to contact a customer service representative to remedy the situation.

Grumbling, I tried to log in again from my home computer later in the day. After receiving the same message, I shrugged and figured it would be an ideal opportunity to test the quality of iGObanking's customer service. I called the toll-free number on their website and patiently awaited the next available CR.

I was placed on hold for five minutes before receiving a very pleasant middle-aged woman, who allowed me to explain the entire situation. After I sheepishly told her I was locked out of my account after logging in from a work computer, but had forgotten one of my security questions, she chuckled and said it wasn't an uncommon occurrence. She reassured me it would be easy as pie to fix. After asking my basic info (name, address, ss #, telephone) for verification purposes, my account was promptly unlocked. She gave me a new password and instructed me to wait five minutes, log in again, and reset my security questions.

A few minutes later, I had three new questions (with the answers committed firmly to memory this time!), and I was happily cruising through my online account again. Very simple, and very well-handled. The whole ordeal took less than ten minutes to fix, and I am extremely pleased with the quality of iGObanking's courteous and efficient customer service.

iGObanking Customer Service Hours

If you experience problems or have questions with your iGObanking online savings account, a customer representative can be reached during regular business hours (Monday - Friday - 9:00 a.m. to 5:00 p.m. EST) at 1-888-432-5890. 

Read my experience on the process of opening an account with iGObanking.

Still unsure? Check out the advantages and disadvantages of online bank savings accounts.

~†~ Baby Steps are Key ~†~

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How to Become Wealthy

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

I dug up a wonderfully informative but compact two-page article about beginner wealth from young Joshua Kennon over at About.com. I regularly devour anything on financing I can get my little paws on, and this was a delectable read.

To learn how to accumulate wealth by shifting mentality and through careful strategic maneuvers, take a peek at Josh's How to Become Wealthy: Investing for Beginners guide. It may permanently change your outlook on your finances.

Some interesting quotes;

"When you realize that every morning your assets wake up and have the same potential to work as you do, you unlock a powerful key in your life. Each dollar you save is like an employee. Over the course of time, the goal is to make your employees work hard, and eventually, they will make enough money to hire more workers (cash)."

"The biggest mistake most people make is that they think they have to start with an entire Napoleon-like army ... What these people don't realize is that entire armies are built one soldier at a time; so too is their financial arsenal."

"A friend of mine once knew a woman who worked as a dishwasher and made her purses out of used liquid detergent bottles. This woman invested and saved everything she had despite it never being more than a few dollars at a time. Now, her portfolio is worth millions upon millions of dollars, all of which was built upon small investments."

"If you have any source of income, it is possible for you to start building wealth today."

This sort of knowledge should be mandatory education for every young adult. I never even seriously considered my personal finances until late last year, a few months before I started blogging. Perhaps if everyone was better equipped with financial awareness, there wouldn't be so many broke-asses like me running around. * cough *

The key to wealth is not as elusive as one might imagine. Begin building your own personal fortune today by wisely utilizing your (seemingly limited) income stream.

~†~ Baby Steps are Key ~†~

Take action now, a dollar at a time, and watch your dreams be brought to full fruition.

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The Corruption of Wealth

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

I read a shocking article at the Washington Post last night called "Rich Man, Poor Man", about West Virginian Jack Whittaker's $314 million Powerball jackpot win on Christmas 2002. Apparently this month, Jack is claiming he has now lost the bulk of his fortune to thieves.

What really creeped me out about this article was the transition of irresponsibility from Jack and his family after falling into this ridiculously enormous windfall. It's as if the money  possessed them and they ceased to have any type of rational control over themselves. They totally squirreled out.

If you have a spare 15 minutes, all five pages of the article are horrifying but worth the entire read. It serves as a good reminder of the hidden dangers and corruptive dark side that wealth can bring.  Some portions are highlighted below.

"... Jack's big win was viewed as one of the greatest Christmas gifts in his poor state's history, a holiday miracle to be heralded around the globe. Jack proclaimed that he would tithe a biblical 10 percent of his winnings, donate millions to his family's favorite pastors and build big new churches. He vowed to start a charitable foundation to help needy West Virginians. "I just want to thank God for letting me pick the right numbers . . . or letting the machine pick the right numbers," he said as he claimed his check.

Civic-minded citizens hailed Jack as a hero, the state's antidote to mean-spirited hillbilly jokes. Sure, dental woes had left the strapping cowboy-man without a tooth in his head. But Jack sounded so well-intentioned on TV that some people said he should run for governor."

" ... On New Year's Eve 2002, West Virginia's most famous do-gooder strolled into the Pink Pony, a strip club in the nearby town of Cross Lanes, and, according to the manager, slapped $50,000 on the bar."

"... But people still found him to ask for money. They telephoned his home and rang his doorbell. Given the size of Jack's fortune, some were reluctant to go away empty-handed. A few threatened Jack's family. Off-duty deputies from the Putnam County Sheriff's Department began providing private security for his family."

"... Over the months, the once-dapper Jack grew slovenly, Misty says: "He would come in a sloppy shirt, all wrinkled. His hat would be dirty. He'd be unshaven." And he became demanding. "At first he was, like: 'I'm Jack Whittaker. I won all this money, yay for me,'" Misty says. "Later it was, like: 'I'm Jack Whittaker. You'll do what I say . . . I have more money than God.' Who talks like that?  It was like the money was eating away at whatever was good in him."

"... People made bitter comments behind Brenda's back about how they'd had to work hard for a house in Moss Creek, and she'd had one handed to her. For the first time, Brenda saw herself through her neighbors' eyes. "It was like I was white trash moving into their posh neighborhood," she says. Heartsick, Brenda sold the house that Jack bought and moved away."

"... Suddenly, Brandi had large sums of cash. It wasn't unusual for her to be handed $5,000 in a single day, according to family friend Becky Layton. Concerned about security, the family pulled Brandi out of high school. Old friendships frayed. "Before the lottery, she was normal, real friendly," says Tim Cobb, 18, who describes himself as one of Brandi's best friends at the time. "She let the money go to her head."

"... Brandi became "a crackhead, if you want to know the truth," says J.C. Shaver, 20, who saw her smoke "a lot of crack. Big rocks of crack."

" ... Brandi's custom-painted, pale-blue Mitsubishi Eclipse was a trash bin. Floor and seats were mounded with candy wrappers, empty pop bottles, packaging from electronic gadgets and DVDs and the crumpled change from Brandi's $100 bills: loose fives, tens and twenties. As the kids cruised, money would "fly around the car," Smith says. "Sometimes it would fly out the window."

"... When Eads's daughter returned to the bar after waiting tables, Jack told her directly that he wanted to have sex with her and offered to pay. "He said, 'Money can buy anything,'" Eads says. "She said, 'Not me, it can't.'"

" ... On Friday, Jimmy's brother came into the shop to say they'd found a boy dead over at Jack's house in Scott Depot. It looked like an overdose. "

" ... Jessie had died of an overdose, a combination of oxycodone, methadone, meperidine and cocaine, according to his death certificate. "She's the only one with money to buy drugs like that," Shaver says. "Everybody knew she was the reason for his death." As the mob outside the funeral home denounced her, Brandi didn't even try to defend herself, Shaver says. "She just stood there."

"... When Brandi came to the door, she looked nothing like the girl whose Paw-Paw won the single largest undivided lottery jackpot in history. That girl had a proud, beaming face framed with fluffy light-blonde hair. This Brandi was disheveled. Her baggy clothes hung on her. Her face was sunken. The Hurricane townhouse where she sometimes stayed was in spectacular disarray: furniture askew, drawers pulled out, walls defaced with graffiti."

" ... On Monday, December 20, almost two years after Jack bought the winning Powerball ticket, police found Brandi on the Crosier property. She was dead. Her body had been wrapped in a plastic tarp and dumped behind a junked van in a place called Scary Creek."

The worst part is the young death of Jack's granddaughter and her friend. No amount of money in the world can bring them back. Wealth can be a glamorous notion, but if abused, it only serves as a curse. I feel Jack's story illustrates how little it can actually buy, especially in terms of spirituality and happiness. I hope his family can successfully recover from this tragic chain of horror.

Iwillteachyoutoberich's Ramit Sethi just posted this insightful article over at his blog, about 8 lottery winners who lost their millions.

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Methods to Improve Personal Finances

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Baby step #11 - Small progressions yield hefty results

A new year descends upon us with a fresh and invigorating beginning, and we all know we keep meaning to do better with our finances. It’s one of those things which constantly seem to be placed on the backburner as life continually whisks us from one unforeseen circumstance to another.

Thus we continue to obtain enormous amounts of information and financial wisdom from different resources, such as blogs, books, or forums. But, unfortunately, until we take action for the sake of our own money growth, we are accomplishing very little while simultaneously wasting valuable time.

Make this a daily mantra to ask yourself; what baby steps am I doing now, today, to aid my progression to a better financial future? What can I achieve right now to help me reach my goals?

Here are some small but effective methods to help improve personal finances.

Live below your means. A very simple concept - spend less than you earn. Respect and value every cent you make and learn not to surround yourself with needless material possessions that only add clutter and distraction to your life. Plan wisely for the things which are important for you and which contribute to your well-being and happiness.

Change your mentality towards finances. Stop paying for expenses with future earnings to avoid falling into the credit card trap. Refuse to indulge the national ‘buy now, pay later’ consumerism philosophy. Companies make billions off this mentality every year. Get angry and stop letting others profit from your hard earned salary.

Learn to spend only what you have in the bank. Use credit cards to your advantage and get in the habit of paying the entire balance off each month to avoid finance charges.

Make it a priority to establish an emergency fund. A solid emergency fund is generally saving two to six months worth of expenses. It’s really frightening how few households have this safety cushion for themselves. This will help break the ‘living from paycheck to paycheck’ cycle and bring peace of mind for unexpected circumstances. You’ll then be prepared to face unexpected situations in a pinch.

Save an emergency fund or pay off debt first? This is my current predicament. If you’re also questioning whether to begin your emergency fund or pay off debt first, check the interest rates on your credit cards and loans to decide. If you’re paying 18% on a credit card and only earning 5% in a savings account, you’ll be losing out on 13%, with the 5% interest on your savings being taxable as well. Therefore, it’s wisest and most beneficial to use savings to aggressively eliminate the debt first. Remember to first save a small amount for emergency situations that may crop up - roughly $500 to $1,000. Once debt is eliminated, you can concentrate on establishing a more complete emergency fund. And once you have a tidy emergency fund, you’ll have incredible peace of mind and can start investing wisely for the future to watch your money grow.

Make your savings work for you. On average, the American economy is battling approximately 3% inflation every year. It’s imperative to take this into consideration when setting up any type of investment. Short-term financial goals, categorized as any goal within the next fives years, such as saving for a car or a down payment on a house, should be placed in a fairly liquid and safe type of savings. This could be online savings accounts, certificate of deposits, or money market mutual funds. Invest for long term goals (up to and more than a decade, preferably two or three decades), by reallocating investments into more aggressive growth opportunities in the stock market. Remember, time is your greatest asset. The sooner you get started, the more you’ll benefit in the future.

Try eliminating a bad habit this year and watch your savings accumulate. Whether your vice is excessive fast food or smoking cigarettes, cutting back or quitting an unhealthy addiction will not only benefit your piggy bank, but will also dramatically improve your overall well-being.

Stop receiving a tax refund. I have no idea why, but some people psychologically get a thrill from receiving a huge tax refund each year. I don’t think they realize they’re essentially duping themselves. The federal government has been using your money for free. If you pay what you owe to begin with, all that extra money could be sitting in a high yield account earning some fabulous interest for yourself during the course of the year. It’s much better to break even or owe a small amount to the IRS at tax time. Stop giving Uncle Sam an interest-free loan!

• #1 – Stop incurring more debt
• #2 – Start a ‘beginner’ emergency fund, a small savings of $500-$1,000
• #3 – Eliminate all high interest debt as quickly and aggressively as possible
• #4 – Establish an emergency fund of two to six months worth of expenses
• #5 – Time is on your side; build your wealth through long-term investments for the future

The most important step of all is, TAKE ACTION. Even the smallest of steps will bring you closer to your financial goals and, ultimately, to greater peace of mind.

~†~ Baby Steps are Key ~†~

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Online Bank Savings Accounts and My Experience With iGObanking

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

Here are current rates of some online savings accounts, as of December 29, 2006.

iGObanking    5.30% APY ($1 to open, no minimum, no fees, FDIC insured)

E*Trade    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

EmigrantDirect    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

HSBC Direct    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

ING Direct    4.50 % APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

I highly recommend putting money you want to remain relatively liquid in an online savings account if you haven't done so all ready. A huge incentive of online savings accounts are the competitive APY rates offered, as opposed to traditional savings accounts at physical banks. This equals a yummy, much higher interest rate for the customer. If you're still feeling a bit reluctant or need further information, be sure to check out the advantages and disadvantages of having an online savings account.

My experience with iGObanking

iGObanking currently has one of the highest rates for online savings accounts with a low minimum of $1 to open. I initially signed up with iGObanking on December 18th. The application process was relatively quick and painless, and took roughly ten minutes to complete. If you're interested in learning more about iGObanking, here is a quick rundown of what you'll need to open an account with them.

• A social security or tax ID number
• Driver's license or ID card issued by a state DMV
• Information on any loans or mortgages you currently have (they will ask a few random questions about these to help confirm your identity during the sign-up process)
• Your current bank account number and routing number for funding purposes
• For a joint account, the other individual's personal information (Secondary Applicant's name, social security or ID number, and their date of birth)

Once your application has been approved, you'll have the option to immediately transfer funds from your current bank account(s) into your new iGObanking online savings account. However, I'd recommend only transfering a small portion (even if only the initial $1 minimum to open) because you won't be able to access your account until they mail a password to your home. The letter arrived approximately a week after I completed the application process. I had put $50 in my account to start with, but it admittedly made me a little nervous when I realized I wasn't able to access my account yet. Therefore, if you're a neurotic worrier like me, it might be wiser just tossing $1-$5 into the account and waiting until the letter arrives with your password before transferring over the rest.

Once you receive your letter, you'll be able to log into your online savings account and will be prompted to change both your user name and password to your own preference. Once you obtain full access to your new online savings account, you can then continue transferring the remainder of your funds into it.

Congratulations on opening your brand new online bank savings account! You've taken a wonderful first baby step in helping your money grow and work properly for you. If you haven't all ready, acquaint yourself with the beauty of compound interest. Now you can focus on building a comfy nest egg for yourself while funneling your savings into your new high APY online savings account.

A good rule of thumb is to count up your total bills and expenses for one month, and then concentrate on saving at least four to six months worth of expenses in case of an emergency. If you're heavily in debt or a broke-ass student like me, try to save at least $500 to $1,000 in an online savings account for yourself before focusing on aggressively tackling your debt.

So, no more excuses! Today is the day to get started, as in, right now. Welcome to taking a simple yet positive approach towards building a brighter financial future.

~†~ Baby Steps are Key ~†~

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Why Frugal Living Makes Sense

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Baby Step #10 - Saved money is a smarter approach to your goals than earned money

Living frugally means attempting to save money where you can, rather than blowing your earnings faster than your bank account can absorb it. Frugality sometimes has a bad stigma attached to it, and some people mistakenly perceive frugalness with just being a plain crabby and cheap tightwad. However, using craftily saved money towards a desired goal is much smarter than using earned money, and here’s why.

Taxes.

Let’s say you really have your heart set on a new Plasma television for around $1,000. You have two choices. You can either cut back on your other expenses to salvage enough from your current savings, or you can start increasing your earnings, let’s say by taking on a temporary second job. Once state and federal taxes have wrecked havoc on your paycheck, however, you’ll need to earn more than $1,000 in the end – hundreds more, in fact. For our coveted Plasma television, we’ll actually need to earn roughly $1,400 to cover all mandatory taxes from our paycheck.

If we instead chose to cut back in other areas of our life to use savings that have all ready been taxed, we can then plop down $1,000 and be done with it – without enduring the stress or time wasted of assimilating a second job.

This is why many financial advisors view frugality as a wonderful way to “earn” money through savings, without the headache and hassle of working more to achieve the same goal.

So how can we become more frugal to save on current earnings?

The next time you buy a product without regard to price, consider further options to help you “earn” more through savings. Here are some suggestions.

Coupons - Using coupons and coupon codes for online shopping can help save you mega bucks over time.

• Cool Savings offers a wide assortment of printable coupons on groceries, baby goods, free items, freebies, and much more.
• Coupon Cabin has the option to search for relevant coupons by item category, specific store, or by state, to locate specific malls in your area. I love this site!
• ValPak asks for your zip code, and your ready to roll.
• Custom Coupon offers hundreds of coupons on everyday items, like cereal and yoghurt.
• Coupon Surfer is a great resource for coupons on groceries, children's items, books, clothing, music, and much more.

This coupon list is by no means comprehensive. There are many sites out there geared toward helping you save on everyday items. Looking for dining coupons? Plug your area and "discount dining" into your favorite search engine and see what can be dug up.

This ABCNews article offers great advice on online shopping codes for even more savings. And another article from MSN Money shows consumers how to optimize savings to the max. With all these great resources at your fingertips on the web, you no longer have an excuse not to take advantage of nifty savings whenever possible.

Sales are also a great way to beef up your savings. If you find a coveted item, make sure to stock up during sales.

Comparison Shopping and Auction sites. Take advantage of comparison shopping and auction websites, which help find the best deals on an item. I'm in the process of putting together a more comprehensive list of resources, but here are two of my favorite sites to start.

• eBay is now the world's largest auction site. I use eBay for just about everything. I can find many items for much less than at traditional stores, even with the shipping costs, and it saves gas money to boot.


• mySimon is a great comparison shopping engine which lists the online prices for a given product at many different stores. Compare prices and watch the savings roll in.

Learn to be a gourmet chef and eat in more. You'll be amazed at the ridiculous amounts you'll save just by not eating out so much. Buy foods in bulk when possible for even more savings, or find dining coupons when you do decide to treat yourself.

Avoid impulse buying. This is a great incentive for bringing cold hard cash along on your shopping sprees. Have a clear idea of what you're looking for and stick to it. If you stumble across something you're absolutely salivating to buy, give it a day or two before going back to make the purchase. Impulse buying used to be a huge money-waster for me, and it was usually on crap I didn't even need.

Buy generic brands. Most stores are psychologically set up so that the most expensive brands are placed eye-level to the customer on the shelf. Consider looking upward or downward for cheaper generic brands. They cost less, but are just as effective.

Consignment shops, second hand stores & yard sales. Gently-used clothing stores can save you big money. I once bought a great hoodie for $1, and it's still my most comfy one! Consider selling your gently used clothing to some of these places for an added bonus.

Library. Your local library is an often overlooked but valuable resource as well. A good library is stocked with loads of books and DVDs that can be borrowed for free. For a tiny fee, my library will also request titles from other branches if they don't carry it themselves. The desired books or movies usually arrive for pickup at the nearest convenient location within 2-3 days. The fee here for this service is 25¢ per book, or $1.00 for a special Video or DVD request.

I ♥ my library.

~†~ Baby Steps are Key ~†~ 

Take advantage of great deals and start "earning" more on your savings

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Advantages and Disadvantages of Online Bank Savings Accounts

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

Baby step #8 - Online savings accounts can help stretch your dollars further

Here’s a look at some nifty Online Savings Accounts and their Current Rates as of December 10, 2006

iGObanking    5.30% APY (no minimum, no fees, FDIC insured)

E*Trade    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

EmigrantDirect    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded daily)

HSBC Direct    5.05% APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

ING Direct    4.50 % APY ($1 to open, no minimum, no fees, FDIC insured, compounded monthly)

Does the thought of online banking make you a wee bit squeamish? So why is everyone raving about online savings accounts?

I haven’t tried one yet personally, but here are some of the advantages others have been kind enough to pass along to me:

1. The ridiculously high APY compared to traditional physical banks. Traditional banks have 2% or lower APY, as compared to online banks with 4.5% and higher. Because they exist solely in cyber space, they can forego the expensive overhead of buildings and tellers. Your Annual Percentage Yield (APY) is the interest earned in one year, taking into account the effect of compounding interest.

2. The convenience to bank anytime you want, 24 hours a day, even in your jammies. Just click your mouse and you’re ready to roll.

3. The ability to bank anywhere in the world, as long as you have access to the internet.

4. FDIC Insured. The online banks listed above are all insured by the Federal Deposit Insurance Corporation. This means your bank deposits are insured by the federal corporation up to $100,000 per Social Security number. This is important because not all banks or account types are insured. When you start investing later in life, you'll be taking much more risk with your assets. But for now, this is a very safe place to put money you absolutely don't want to lose.

Some disadvantages I've heard:

1. Not as immediate as traditional savings account. I personally see that as a huge incentive not to be so eager to touch money but hey, some peeps may view that as a disadvantage. Expect an average of three to five business days between transactions.

2. Switching banks may be more cumbersome.

3. Lack of ATMs. You’ll need to either mail your checks or transfer your funds from another account.

4. Lack of tellers. You’re more at the mercy of an 800 number when you lack the convenience of talking with someone in person. If a problem arises, it’s a gamble. You could either receive friendly and knowledgeable help, or really crappy customer service.

5. Technical difficulties. Since there’s no physical branch to visit, always keep an alternative stash of money handy somewhere in case the website temporarily goes down.

With all that said, I still feel an online savings account is the best option for my small emergency savings. I need the money fairly liquid because my goal is to first and foremost eliminate my car loan debt. But since I've established a small safety cushion to fall back on in case of an emergency, an online savings account seems like the perfect place to get the most bling for my buck right now.

With all this money zipping through cyberspace, the options can be confusing.  iGObanking is currently on top with the highest rate, but that will fluctuate over the coming weeks. I'm leaning strongly on EmigrantDirect. If anyone has experience with iGObanking, let's here it.

Looks like it's time to get off my tushie and get started!

~†~ Baby Steps are Key ~†~

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Recognizing the Credit Card Trap; Ensnare Yourself Out of Debt

(Broke-Ass Student has moved to a new home! Please visit www.brokeass-student.com for further adventures and content)

Baby step #6 - Use a 'save first and buy later' approach to avoid spending money you don't have

Are you struggling paycheck to paycheck and there never seems to be enough money at the end of each month, like I was? Is it a constant struggle to make your bill payments on time? Do you ever wonder why?

Money is a force which arrives into our lives and seems to leave just as abruptly. We all work hard - sometimes unbearable and monotonous hours - for our paychecks. Therefore, watching our money repeatedly drain away can be an extremely arduous and frustrating process. We know we need money to afford necessities and buy the luxuries we desire. Yet it seems we are constantly trying to catch up on our bills or finding ourselves in some type of debt.

Unfortunately, the system is designed to keep the majority of consumers in a constant debt cycle. Credit card companies are banking (quite literally) on the fact they can tantalize us with appealing opportunities and we’ll jump at the chance to purchase a juicy item we desire – regardless if we have the necessary funds saved or not.

"Well", you might reason with yourself, as I did, "even if I can’t really afford it now, I’ll slap it on my credit card and do small minimum payments every month." Sound familiar?

This mentality of 'charge now, pay later' is contributing to our inclination to spend money we don’t have. For the majority of us, this results in a mountainous cycle of debt. Thus we continually and desperately try to struggle out of the same hole. We get one debt paid off, but we're immediately charging the next item. See where I'm going with this? So where will it end?

Since the credit card was introduced in the 1950’s, the past few decades have evolved us into a credit card using ‘n’ abusing, debt-clad nation. Is it any wonder credit companies issue cards to young people, without a thought to how irresponsible teens might utilize them?

Credit companies make millions billions off our hard-earned money each year – all in interest rates from consumers who buy massive purchases they can't afford. Consequently they're forced to pay the bare minimum amount each month when the bill rolls in. Remember the beauty of compound interest? Well, this is compounding interest working against you, and it gets ugly.

How does it feel to be paying interest, and then interest on top of interest? Do you know the interest rates on your current credit cards? Are you disturbed yet? I am.

One of the best ways to build a strong financial foundation is to eliminate unnecessary credit card spending unless you're able to pay the card off in full each month. (There are a few exceptions to this, such as starting your own business, but that's irrelevant to a broke-ass student charging a new iPod and taking forever to pay it off).

I keep one credit card handy for emergency purposes only and make all other transactions with cash. My monthly expenses are drawn directly from my checking account each month via online payments.

The added benefit of using cash is that it has really helped in cutting back my impulse buying. For some reason, it's much harder to part with actual money as opposed to signing a credit card receipt. We tend to be more emotionally attached to money. This is a good thing because it ensures that every purchase I make, I really want it.

Using cash for purchases is an extremely productive way to reduce random spending tendencies. The time to change the vicious cycle of accumulative debt is now. Stop allowing credit card companies to profit off you.

~†~ Baby Steps are Key ~†~    Get angry and fight back!

Oh yeah, and go visit Cap over at StopBuyingCrap.com. Maybe you'll learn something useful.

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