Archive for the ‘Finance’ Category

Every dollar matters – Cry baby Cry – Bargain Bank Accounts – Part II

June 16th, 2009 Vijaianand

Last week, I started a blog series title Cry baby Cry sharing few real life stories to save/get back the dollars I truly deserve by my money management.  In the previous blog post, I wrote how I was able to get credit card financial charges refunded back to my account. This blog post, I am going to share an interesting story on how I got stuck in string of cross product sales during my hunt to find a good business banking service.


Bank Account -A Search for Free Business Banking


Large bank chains have a habit of throwing a small fly at you to lure you in for a big catch. They entice customers advertising free offers with free cash bonus. To be charged later with big account service fees and maintenance charges. Once you step inside their door, customer reps will try to sell products with all attractive free add-on services, valid only for limited period.  In my case, the bank was Bank of America(BOA) and add-on service was Payroll processing service. Here comes the story.

I needed  payroll processing service for my consulting company. As a bargain hunter, I was looking for an affordable service. Charges from many payroll servicers in the market,  start with minimum $20/month for just simple service. I felt $20 was bit on the higher side to process just my paycheck. 

At that time, I was referred by a CPA to check on BOA’s free payroll processing service. Obviously, thats was a good deal. I can save $20/month which is $240/year. So I decided to stopby at nearby BOA branch to check it out. After talking to the Customer Rep, I found out there are lot of strings attached to this free offer. First, I needed to start a business checking account in order to use their payroll processing service. (1st catch) That I expected.  It didn’t stop there. 

Payroll processing is only free if the salaires of company employees  get deposited dierctly to their BOA checking account. If the employees don’t have BOA checking account, they needed to open new one. That is practically impossible for any small business asking their employee to open new checking accounts. (2nd catch).  Since I don’t have any employees, they needed me to open a personal checking for myself in order to get the business checking free. (3rd catch) They went still further. I also need to make my paychecks direct deposited to my personal checking account. (4th catch). It was too many strings but  I am getting what I wanted except few new accounts to maintain than I realized. I signed up without any second thought, hoping to save some money.


What happened next?

Six months passed, I found out that I don’t need to process my payroll. I was doing it wrongly to start with. So I immediately stopped using BOA payroll service. As I soon as I stopped processing payroll and direct deposits to my checking account, BOA started charging $5 as account maintenance fee to my personal checking account from the next month. I visited the branch and asked, how can I maintain my business and personal checking accounts without payroll service. They said, I needed some form of direct deposit to my personal account to both accounts free. Otherwise the fee will be charged as per terms.


I am self employed for my own LLC, I don’t get any other income to direct deposit. I asked for any other option but they couldn’t find anything to suit my need. They didn’t want to lose me as a customer as well, so they gave me 3 months of fee waiver until new offers arrives at later time. I also got the fees for 2 months refunded to my account. After 3 months, they started charging again.  I called and talked to the same rep one more time. She found a different offer this time. That 2nd offer, I need to use my check card to make atleast one purchase a month. I don’t purchase regularly for my business. I can’t avail that offer. So she gave me 3 more months of fee waiver. I was living in the grace of the rep with just fee waivers and don’t like to call every 3months. Next time fee waiver elapsed, I just went ahead and closed the accounts to avoid future trouble.


No Free lunch


My CFP Certification course has taught me clearly, there is no concept of free lunch. There is always cost associated in making even the so called free lunch. It is not actually free even if they offer it free. Similarly, there is always an opportunity cost associated with any free service. You either pay for the service as fee upfront or pay by giving them business. You are keeping your money in their bank which is similar to lending your money. They are using your money for their business. Either way, they are winning. You better find the common ground to make the best of the situation to get something you wanted which is well worth your time.

I like to conclude with few lessons to learn from my story:


1. Avoid opting for offers with too many strings attached.  It will work only if your situation stays constant. That is not always the case in our ever changing lives. Always try to open accounts or signup  for services without too many obligations or limitations.

2. Special deals are not always best for all situations. Try negotiating if your situation changes to get most out and reduce your cost. If it doesn’t work out, just get out as soon you can find a way out.

3. Finally, not all free offers are real deals. Avoid your impulse purchase or signup’s on accounts if you even get $100 bonus credit. It always comes with strings attached in fine prints, we often overlook.  

You time is also a very valuable commodity. Go for bargains if it worth your time and money without too many strings.

Happy and Careful Bargaining !!! More stories to come…

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Every dollar matters – Cry baby Cry… – Part I

June 8th, 2009 Vijaianand

Many times we end up paying financial charges or late fees on our credit card and utility bills, even after being extra careful in paying them on time. It may be an one time affair and rare mistake from our part. Still we feel hesitant to ask for credit. Because, we don’t want to embrass ourself to hear the answer “NO” since it’s our mistake.

“Only crying baby gets the milk”  – Author unknown

Did you ever heard of this saying? It is a more common phrase used back in my native place(south India).   Babies cry when they are hungry to get the attention of care giver, so they are feed them milk. But not all babies are smart enough to cry out of milk. Some babies just don’t cry or cry enough to catch the attention of care giver who assume the baby is alright.

I want to use this phase for adults to make some money sense.  Being human, we all are prone to make mistakes. If it’s one time thing or rare one, I feel the mistake should be forgiven and charges should be voided. I sure, No company will do unless you ask for it.

You need be expressive enough to request or ask for credit when you are charged with fees  by your service providers after being loyal to them.  I don’t mean to literaly cry out like baby instead express your concern in words. Just try to ask for credit in a good way and you will get money back most of the time. If you hesitate to ask at first place, you are going to miss out on those dollars wasted on fees and charges. 

Let me share few of my real stories on how I “Cried like a baby” asking for credit when I really deserve.

Credit card Financial charges
Usually I pay my bills on time and never charged with any financial charges. I always like to walk my talk. As I money mentor, I better follow my own advice and be an example first. In many years, I didn’t pay a penny as fees/charges. That’s the big reason for my FICO score to be in upper 700’s.

I guess there is always an end to any pride. My proudest moment came to an end last month. I was slacking on paying bills because of my unplanned trip to India in March. When I got back, I wasn’t paying attention messing up my payment schedule. 

First on the list was my credit card bill. I paid my credit card bill wrongly. Instead of March amount due, I paid the Feb amount due. I didn’t notice until I got my April month bill with a financial charge of $9.32. (Below is my original statement)



Always call the bank/service provider

I wasn’t sure why I was charged the financial charge. I wanted to email rather decided to call. It is always better to have personal conversation either by phone or going to the bank if you need any credit back. Emails doesn’t work well because it doesn’t express your emotions properly.  So I called my credit union and seeked for explanation. Customer rep checked my accounts and came back to sayg, “You paid the amount less than amount due for Mar bill”. I was surprised because I never paid less amount and always paid full.  I myself checked the statements and found that I made the mistake. I did confused with amount due from March and Feb. 

Accept your fault if any

I realized my fault and I accepted it. I told her, it was the first time it ever happened. I asked her to check  my account history. Afterwards I kindly requested her, “Is there any way possible to get the credit of the financial charges? if I pay the balance”. She took her time to check my account history and said, “Yes, you do have a good history of paying on time full. So we are going to give your credit of the financial charges. Just go ahead pay the next month bill full. You will see the credit month after next bill”. I was happy and Thank’ed her for the kindness.

Do your job right

Next month, I paid my full bill including the financial charges since its added to the bill to avoid any more charges for not paying amount due. The month after next(May), financial charge was credit in my bill as shown below.

You sure worth more than you think. You deserve, what you are worth. It is always good to pay bills on time whether you are paying minimum or full amount. It builds a rapport with your service provider which helps at times to negotiate deals or requesting for credits. 

It is always good to cry means ask for help instead of expecting things to happen on its own. It is nothing to be embrassed when it comes to money.

More stories to come on your way…

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DOES PACKING LUNCH REALLY WORKS?

May 19th, 2009 Vijaianand

You hear this slogan very often these days in many websites and blogs. The matra is strong and clear, “PACK YOUR LUNCH“. I am a full supporter of this saving money strategy and the idea works great to save good amount money of your money which can help fund for your kids education over the years.

Are you jealous of Indian collegues who works with you bringing lunches from home everyday? Let me reveal the truth behind it. First, their wife don’t work so they cook very good food. Secondly, they are money conscious folks who like to save and finally they are used to carrying lunch packs from their school days. It becomes a habit over time so they don’t like to eat outside very much.  If you can try packing lunch frequently, it can become a habit which is good for your health and as well for your pocket.

What do you exactly mean  by “Pack your Lunch”?

Packing your lunch doesn’t have to be a time consuming task. Many of you think packing lunch means preparing the lunch in the morning and pack when you are trying to hurry and get to work on time. It is surely not going to happen and you eventually loose the interest of packing lunch.

No, you don’t have to prepare and pack the lunch fresh all the time. It not about preparing fresh food for lunch which is just one motive. Pack your lunch just means bring lunch from home saving the expense of spending outside. It can be a healthy frozen food which you bought from grocery stores, home made leftovers, freshly made salad or quick sandwich. It can be anything which makes you savior and satisfy your hunger during lunch time. If it doesn’t satisfy you, you will again go towards searching for junk food.

How do I start?

You can start by doing few days a week so you don’t miss out on your restaurant or fast food. By starting slow, you are making a smooth transition helping your body to get used to this new habit. This way, you avoid any upset effect to your body. Just start with leftovers  2 days a week like Monday and Wednesday. Then add one day per month until you are satified with your arrangement to have 5 days from home or keep friday as a going out lunch day.

I bring lunch 3 days a week – 3 day left overs, 1 day frozen food and 1 day submay 6 inch sandwich. Once a month, I go out with friends on friday.

Why many don’t like to pack their lunch?

Many people think that packing their lunch is a shame and crime. They don’t want to heat up or make their food for lunch. They just want to be fed. They also think, it shows your are frugal. Let me tell, there is nothing wrong being frugal. You only should avoid being cheap. There is a lot of difference between being frugal and cheap. According to dictionary.com, frugal means  “prudently saving or sparing; not wasteful.”  cheap is defined as “stingy; miserly.”

I know its more wordy explanation. To be simple in my terms, frugal people spend rightly(for needs), save wisely(for wants) and give graciously. But cheap people, they don’t like to spend even for their needy things. Even if they spend, they tried to save money buying cheap items. They also don’t

So being frugal is not a bad thing at all. Don’t give silly excuses like others here in the website.

Is it really worth packing my lunch?

Yes. It is really worth saving time, money and your health. You save time atleast an hour going out which can be spend efficiently. It helps you to eat healthy and good. Finally the important factor, saves you money. Even if you go out for lunching in cheap chinese buffet, you end up paying min. $10 with tips. For 5 days, its 5 * 10 = $50/week * 4 weeks = $200/ month * 12 = $2400 a year. Thats apx 3-5% of your gross yearly income.

If just reduce to start going out only once a week, it will only cost you $40/month and $480 a year which is a saving of $1920. Thats a good amount to be save up for your kids education or put away for retirement. You can check out how much you can save by packing lunch using our calculator.

If you are bored of getting lunch everyday, you can try going to sandwich place like Subway  once a week. Subway now offers $5 foot long. You can save $2 by bringing your own chips and drinks by buying it bulk from Walmart or wholesale stores.  

If you a reasonably family of 3 or 4, you can consider becoming a member in wholesale clubs like SAMS or COSTCO. Costco is my favorite because of its Quality products and reasonable price range. You might have to pay the membership of $50 but you will sure end saving 2-3 times of the membership cost or even more every year by buying things in patties, sandwich buns and so forth. Be careful and don’t get tempted to buy new items introduced every week in these clubs. 

Food is an important entity in our life which we tend to spend money every day. So it is easy to spend wisely and rightly and see quick savings at this tough times, helping to keep more money in your bank account. 

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Need more budget advice? Visit this moneyreallymatters.com approved friendly website: www.GivingGrinch.com

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