May 8, 2009

4 Simple Steps To Start Managing Your Personal Finances

I started working full-time about 5 months back in December '08. As soon as paychecks came pouring-in I found that my bills are billowing unreasonably. At the end of each month I started to worry about the expanding leak in my pocket but couldn't do anything about it as I didn't know who's the culprit!

Well obviously you yourself give away the money you have and there's no one else to blame but you yourself; part of solution stands in the answer to these questions:

"Am I doing anything to manage my money?
Am I living paycheck-to-paycheck in the quest of paying my bills in the end?
Do I realize my needs or I just pay for what I want?"

Analyze your answers, act on them and once you are sure that you use your money intelligently in a planned and reasonable manner, you can spend your money, what Ramit Sethi says, the "guilt-free" way.

Step 1: Start Budgeting

The first and the most important step. My modified version of's definition of "budgeting" is "an estimate of expected income and expense for a given period in the future and past". Yes I strongly believe that you don't only budget your future but also track where you spent your money in the past.

Budgeting greatly helps you in deciding:
  • here should you cut spending
  • which are the biggest expenditures you are incurring on you
  • where did you over-spend
  • where and how much did you save after you start tracking your budget
  • whether your money is being used the way you wanted it to
  • any additional efforts for an anticipated purchase, etc.

Let's cut to the tools at hand now. There are many free Personal Finance software in market today. You can choose the one you like from below, or google their reveiws and decide.

I personally use Quicken Online. All these software require you to feed usernames and passwords of all your bank accounts, then the software will connect to the bank website and extract the transactions using the access info you provided.

Different software provide you with different features and services to help you budget efficiently but here are a few common reasons to start using one:
  • get yourself organized
  • see the snapshot of all your bank and credit-card accounts at one place
  • track where each penny of your money is going
  • analyze your spending using visual methods like graphs, etc.
  • set goals for monthly spending on different areas
  • plan and act ahead of time for any anticipated major expenditures
  • set alerts for billing due dates and other payment

If you are looking for free software, here are a few to start with (please leave name of any other free software in the comments):
You are now all set to get started with your favorite Personal Finance software there's only one thing you should keep in mind, "no one can automate you regularly keeping track of your budgets so it's your responsibility to keep checking accounts and restricting yourself to meet your goals for the month".

Step 2: Set-up your Emergency Savings Funds

As the name suggests, these funds should be set aside to be used in case of emergencies. At this point it is worth thinking of all the bad evil that might come to anyone any day: financial hardship like layoffs, etc., medical emergencies, heavy expenditures like car repairs, etc., natural disasters like flood, fire, etc. ....

Slight acute thinking is enough to realize the significance of emergency funds in one's life. Unfortunately not many people are even aware of emergency funds while, I believe, it must be one of the very first steps in managing your finances.

How much to save for emergency?

Obvious next question over which I spent a couple of hours for a few days myself. Primarily an emergency fund is supposed to support you for at least 3 (or
6) months in face of emergencies.

It's that simple:

(a) think what expenditures you usually incur every month
(b) sum-it up
(c) pad this sum to be on the safer side

To name a few areas which might help you in step (a):

1. House/apartment rent
2. Monthly grocery
3. Dine-outs
4. Clothes purchases
5. Other kinds of purchases
6. Cell-Phone bills
7. Landline phone bills
8. Internet service bills
9. Subscriptions (Netflix, Blockbuster, Rhapsody, etc.)
10. Auto loan (minimum) installment
11. Home loan (minimum) installment
12. Auto insurance (don't forget the deductibles)
13. Home/Renter's insurance (don't forget the deductibles)
14. Auto maintenance (gas, wash, wax, air pressure, repairs, etc.)
15. Vacation/road trips
16. Bank fees
17. Extra padding to stand strong winds (> $500)

This list is not exhaustive and depends on your life-style. Assuming a 3-month period, sum this up and multiply by 3 --> this is your emergency funds requirement. It's not unusual if you don't have this amount at present and you will need sometime to accumulate it; well that's an element of financial planning and you have already started.

With your budgeting software already in action, make use of its "Goals" feature and decide a limited period of time over which you may conveniently accumulate your emergency funds. Then start putting away a part of each paycheck aside to meet this goal.

What to do with the emergency funds?

This is your hard earned money and in no case it should be sitting idle. Said that you should try to get the most out of your money and one of the best places these days are the numerous Online Savings Accounts available. You can look for best rates for online savings account at and

I encourage you to shop around and while shopping for the best choice, try keeping following points in mind before making the final decision:

1) is the bank FDIC insured?
2) what is the minimum balance to earn interest?
3) what is the minimum balance to avoid incurring any penalties?
4) how (fast) can you access your money?
5) how long has this rate been constant?
6) how is the general reputation of bank?

You may also want to explore any additional areas you can think of before packing the deal;'s Safe & Sound Ratings may prove to be helpful in judging a bank's past performance. Another place to look might be your closest credit unions; read why you should also consider Credit Unions.

Step 3: Create CD Ladder

Certificate of Deposit or CD is known to be one of the safest and reliable options available today to park your cash reserves. When you put your money in a CD, you give your word to the bank that you won't touch your money for the term of that CD. It is this guarantee you give to the bank that results in higher interest rates for CDs than normal savings accounts. The longer the term of CD, the higher the interest you will earn on your money. (Principal amount of your CD also matters in some cases.)

In today's times of highly volatile savings interest rates, CDs could be premium tools to hedge against the rate fluctuations. Once you open a CD account with a bank, the bank will continue to pay you the promised interest rate for the term of CD. However, if in case you decide to cash-in a CD before maturity, be prepared to loose the interest you earned and/or (may be) additional penalties.

There are many websites that give you updated CD rates. To name a few, try,, BankDeals, etc. Also browse around websites of banks and visit your nearest credit union. Read why you should also consider credit unions.

As stated above, the fact that CDs with longer term earn greater interests can be utilized in your favor if you know of a technique known as CD Laddering. A CD Ladder is created by spreading over your money over different term periods and ensures periodic availability of your funds in case you need to use them. An example on nicely explains the concept with an example.

Finally Jim W (@ responded and here's the link to Jim's wonderful explaination of CD Ladder.

Step 4: Automate Yourself

I see several bloggers suggesting people that they should have their paychecks direct-deposited into their bank accounts. To be very honest, I really stand shocked because how could one:

(a) NOT prefer to get that paycheck automatically deposited but go to
bank for depositing the same in person
(b) NOT prefer the simple life when paycheck is automatically divided between
various bank accounts but do the same manually every pay-period
(c) NOT prefer to play electronic-safe but risk the live check or cash in
the pocket
(d) NOT prefer to utilize their time more productively but always worry
about timely payments of bills
(e) blah ... blah ... blah ...

All I am trying to say is "automate" your life. I couldn't find anything better than Ramit Sethi's 12-minute guide to automation; it's really worth it.

Once you know where all your money is going, your have developed a strong layer of safety cash blanket around you and you have a self-sustaining CD-ladder, you are in a pretty strong position and can certainly consider investing in stock market. It would be great to hear how helpful was this article for you and any suggestions you might have.

C++ Utility: Reverse a string

char* ReverseString(char* input)
if(!input) return 0; //null pointer

int length = static_cast<int>(strlen(input));

char* begin = input; //point to beginning of the input string
char* end = input + length - 1; //point to the ending of the input string

char temp;
while(begin < end)
temp = *begin;
*begin = *end;
*end = temp;
++begin; --end;

return input;

Last 7 Days To Win Free Gillette Fusion Razors

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Leave me a comment if you happen to be a lucky one :)

May 7, 2009

High Yielding Online Savings Rates: May 4 - May 10

Bank Rate Min. Deposit
------ ------ ---------------
3.05% $25
EverBank 2.51% $1(first 3 months)
1st Constitution Direct 2.50% $100
ShoreBank Direct
2.45% $1
First Trade Union Bank
2.32% $2,500
Heartland Bank Direct
2.30% $500
Valley Community Bank
2.30% $0
GMAC Bank 2.25% $1

Source: MoneyRates Please contact the bank for most updated details.

May 5, 2009

Haggling Works: Try It, Save Money

As per, many people aren't usually comfortable with haggling. Call it negotiation or something else but fact remains that haggling does save you more green. I was inspired to give it a try by Ramit Sethi's constant corroborations for haggling and to my surprise it worked. Let me share the stories with you:

I recently bought my new car and in the process I negotiated with 12 auto dealers. My strategy was to negotiate a price to lowest possible with a dealer and take this lowest price to the next dealer. Like this I saved approximately $2000 on my car.

Second incident happened today, saving me just $3 but this is an example that the service providers and business owners are out there to consider any negotiations put forth; only thing keeping it back is customer's hesitation to take the first step.

I recently tried HSBC's CreditKeeper program and liked it.
After 30 days of trial period I gave customer service a call this evening and said "I am calling to cancel my membership". The rep said "I will certainly be able to assist you with this but would you mind sharing the reason so we may keep your business?" Once I heard this I knew that the ball is in my court and I fired it right away, "I know other services currently available in the market which provide similar products at reduced costs, do you think HSBC would be able to do something regarding this?" And then the rep said "Certainly, if we can keep your business by reducing the monthly charges from $9.99 to $6.95, I would be very happy to do this". Bingoooo ;)

All I want you to realize is your 2-3 minutes call can save you some real good money then why not give it a try. This technique has also (indirectly) decreased my auto loan interest rate by 2.70%.

All you got to do is
  • speak up and be confident
  • be proud and prepared to walk out of store if it takes to melt the sales rep down
  • while negotiating always be polite
  • survey the product/service you are haggling at other providers in the market
So let it be your showtime next time you shop for something. Be a victorious haggler :) Leave me a comment if you save even a penny, I would be happy to use your tips.

I'm in aBlog Carnival: This post was among the ones exhibited in Carnival Of Money Stories 2 at PT Money. Being part of the carnival and having yourself here today, have greatly boosted my energy. I would be glad to know about your thoughts on this post and my blog, hope to see you around :)

May 4, 2009

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Deals - Chase rewarding $20 for paying 3 utility bills with Chase Debit Card

Yes if you are an existing Chase customer and have a checking account with them you might want to pay any three utility bills with the Chase Debit Card by July 31. Contact Chase's customer care center for more details. Also keep watching the free-money around you!

Here's Chase's original promotion message:
"You're already paying bills, so why not get cash for it?

Just use your Chase Debit Card to pay any 3 Phone, Cable/Satellite TV,
Insurance and Utility bills. You couldhelp avoid late fees, save hassles - and
receive $20.It's that easy.Here's all you need to do:

ENROLL your Chase Debit Card, withyour personalized 16-digit
Coupon Code
2. PAY 3 or more bills using your Chase Debit Card by contacting your
service providers in the qualifying categories by July 31, 2009.*
$20 deposited to your Chase account.**"

High Yielding Online Savings Rates: Apr 27 - May 3

Bank Rate Min. Deposit
------ ------ ---------------
3.05% $25
Darby Direct 3.00% $1
Centennial Bank
2.79% $500
1st Constitution Direct 2.50% $100
ShoreBank Direct
2.45% $1
First Trade Union Bank
2.32% $2,500
Heartland Bank Direct
2.30% $500
Valley Community Bank
2.30% $0
GMAC Bank 2.25% $1

Source: MoneyRates Please contact the bank for most updated details.