The Financial Student

ING Direct: Awesome Deals for Independence Day!

I praise ING Direct all the time. With their great online savings and checking accounts, easy to use interface, and decent interest rate, it’s not hard to see why.

But I also like ING Direct because they’re always having kickass promotions. As part of the 4th of July festivities, ING Direct is pulling out all the stops with some great offers. What are the deals? Read on:

• Opening an Electric Orange checking account will net you a $76 bonus. This is an even better deal than when I opened mine and received $50.
• Need a mortagage? Receive $776 off closing costs!
• Want to start investing? Get started with a free $76 when you open a Sharebuilder account!
• Last but not least, receive $25 when you open an Orange Savings account and deposit at least $250. I’ll receive $17.76 for referring you. Use the text links below to open this account:

ING Direct Orange Savings Account!

ING Direct Orange Savings Account!

If you receive a message that says the link has already been used, send me a message using the this “Contact” link and I’ll get a link to you ASAP.

For the all the other offers, use this link: ING Direct Indepedence

Happy Saving!

Hell No I Don’t Want Your Crappy Overdraft Protection!

Well, that took long enough. For years, banks have made billions of dollars thanks to overdraft fees. It looks like those days are over (maybe). The Fed passed some new laws regarding checking accounts last year. One of them requires that banks actually ask customers whether or not they want overdraft protection. What’s this? Giving consumers more choice? I’m interested…

If you opt in to overdraft protection, your purchases will still be processed at the point of sale. But, and this is a big but, if your account balance can’t cover the entire purchase amount you will be charged an overdraft fee. My local bank’s fee is something ridiculous like $35. Your bank is probably similar.

If you opt out of overdraft protection, any purchases that exceed your account balance will be declined. Yes, this could be potentially embarrassing. But is saving face worth $35? That, I suppose, is a decision that everyone must make for themselves.

For new checking accounts, July 1st is the date on which banks can no longer automatically opt you in to overdraft “protection”.

For those of us with existing accounts, banks have until August 15th to ask us whether or not we want “protected”.

My own bank emailed me a few days ago telling me I needed to make a decision:

My excellent Photoshop skillz displayed…

As you can see from the screenshot, I chose to opt out of overdraft protection. I don’t use this account for day to day purchases anyway. I also always know how much is in my checking account so overdrafts simply aren’t an option.

Welcome to the 21st Century: Government Payments Go Electronic

Photo courtesy of dno1967 on Flickr!

The United States Department of the Treasury has some news for anybody who receives government benefits: you won’t be getting anymore checks!

Just kidding! Sort of.

You’ll still be getting your benefits, but in a different form. According to the White House’s Office of Management and Budget:

all payments from the US Government [will be delivered] to consumers electronically, thus eliminating the need for paper checks for all benefits payments.

In simple terms, all this means is that instead of our grandparents receiving Social Security checks in the mail, they will find the money directly deposited into their checking or savings account. The new policy applies to all government benefits, although the IRS is exempt – so I guess you can continue to receive a paper refund check if you’d like.

For those without bank accounts (???), a debit card will be provided. This is also helpful because people without checking accounts often go to those sleazy check cashing places that charge crazy fees just so you can receive your own money. Why do people go to these places? Honestly, I have no idea. They don’t know any better? They don’t trust banks?

There is something I’m wondering about however…

What the hell took so long? I don’t understand why this change wasn’t made years ago. It’s so simple with no significant downside. I know government (like any large organization) can move slowly, but come on! This was an easy switch and it’s not like direct deposit is new. 85% of those receiving benefits already made the switch years ago, so clearly there aren’t many, if any, problems with the system.

P.S. For those of you who are already receiving benefits, but love government waste and harming the environment: You won’t be forced to provide direct deposit information or use the debit card until 2013.

Are there any negative consequences I haven’t thought of?

A Review: 3 Months Into Using ING Direct’s Electric Orange Checking

Back in March, I decided to open up a checking account at ING Direct. I would have done it sooner, but ING Direct has some weird rule where they won’t allow minors to open a checking account – even when an adult will be on the account too. Now that I’ve been able to use the account for a while, I can give an honest (and unbiased!) review.

The Good

Ease of use is ING Direct’s main priority. Their website is incredibly easy to navigate and you’re never left guessing “How do I do X?”. In the unlikely event you get confused, there’s a handy “Help” button in the top right corner of the screen that will answer any common questions for those new to ING Direct and online banking.

Bill pay is fantastic. If possible, ING will try to pay the business electronically. If it isn’t able to, they will actually mail a paper check for you. For free. Even better, you can directly deposit money into someone else’s checking or savings account. I use this feature every month when my cellphone bill is due. Since I’m on a family plan, I simply transfer over my payment to my dad’s checking account.

A debit card is provided, as is standard with any checking account these days. ING uses MasterCard for their cards and the Allpoint ATM network for free cash withdrawals. Allpoint is a large network, with 37,000 ATMs around the world. You can check if one is near you by checking out Allpoint’s website. Even if you aren’t located near an ATM, you can always receive cash back when you buy something at a store. Just remember to select “Debit” on the PIN pad.

You get interest – on your checking! OK, the rate is minimal (0.25% as of this writing), but it’s better than 0%!

The Bad:

ING Electric Orange Checking does not have check writing privileges. You can go ahead and order checks if you’d like, but ING Direct will not process them. This is a completely electronic account. The only thing you will receive in the mail is a debit card. With all that said, I don’t consider this a con. I love not having to worry about a checkbook. On the rare occasion (it hasn’t happened yet) that I need to write a check, I have an account at my local bank.

You have to be 18. I briefly mentioned this before, but I think it’s an important point. ING Direct won’t allow a joint account to be opened if one of the individuals is under 18. I’m guessing this has something to do with random liability policies, but it’s still annoying. Ironically, kids and teens are the least likely to even need to write a check, but they can’t have an account at a bank that refuses checks. Even more puzzling – ING Direct Orange Savings accounts can be opened with a minor on the account.

If you’d like to sign up for the ING Direct Electric Checking Account, you can use one of the links below. If you use one of the text links, deposit at least $250 and you’ll receive a $25 signup bonus. I’ll receive $10.

*Use only if depositing $250 or more.*

ING Direct Electric Orange Checking

ING Direct Electric Orange Checking

If you can’t deposit that much cash right now, please use this link:
Learn about Electric Orange from ING DIRECT USA. Every dollar earns high interest.

ING Direct: What’s Up With Yo’ iPhone App?

I, as basically every other personal finance blogger, use ING Direct as my primary bank for savings. They have a decent, although not great interest rate, a clean and usable website, and great customer support. One of my favorite things about ING Direct though is that they’re one of the original online banks. They started out way back in 2000 and know what they’re doing. That’s why I was disappointed when I went to search for an ING Direct iPhone app.

I wasn’t even sure if they had one, but what I found was actually worse than them not having an app.

The “app” isn’t really an app. All it does is launch the iPhone’s own browser to ING Direct’s mobile site. It doesn’t do anything else – other than take up space on my screen.

In ING Direct’s defense, their mobile site (designed for devices with small screens) is pretty good. The only part I had a problem with was entering my PIN. With ING, you can’t actually type in your number. You have to click on a virtual phone-style numeric keypad. On my iPhone, this wasn’t super easy because my finger covers up about three numbers at the same time.

But still, it’s puzzling why a completely online bank would put out a half-assed “app” to their mostly technologically proficient customers. The Apple App Store has been in business for almost two years now – that’s plenty of time for an Internet focused bank to create a decent application. Even more interesting is that ING Direct knows that it’s crappy. They put a little message in the bottom of the screen that reads “We’ll be launching a new, full app soon.”

What are your thoughts about ING’s useless app? Am I being too hard on the company?

Update: Mint Adds Manual Cash and Check Transactions

I’ve been using Mint now for about 2 years. For those who aren’t aware, Mint.com is a web based financial management service. You connect it to your checking, savings, credit card, retirement, investment, etc. accounts and all of your information (transactions, balances, etc.) is presented to you on one page. The coolest thing about Mint though is that it has a great design. You can make some pretty cool charts and graphs that allow you to analyze your spending and the service will even text you when you’ve exceeded your budget for the month.

But there’s always been one thing that’s bugged a lot of people: No way to manually add transactions.

This was annoying because of a constant reporting delay. If you wrote a check on Friday, Mint might not know about it until Monday or Tuesday when it was finally cashed. The same problem presented itself for cash transactions. The only way to input purchases was to first deposit cash into a bank account and then go shopping.

No more!

They’ve rolled out an update and you can now enter cash and check transactions as you make them. This makes Mint quite a bit more functional for those who use cash and checks regularly.

To check out the new feature, just login at Mint and click “Transactions” and then “Add a Transaction”.

Have fun tracking!

Want $25 Bucks? Just Open a Savings Account from ING Direct

ING Direct is an awesome bank. They have great customer service, an easy to use website, and a decent interest rate. Even better, they offer account opening bonuses. If you use one of the links below (and open the account with at least $250 dollars), you will receive $25 dollars deposited directly into your account. I’ll receive $10 dollars, so it’s a win for everybody.

I have 50 referral invites available. I currently have 10 listed below. As they get used up, I’ll replace them with fresh links.

IMPORTANT

*Please do not use the links below if you are not funding your account with at least $250 dollars. You won’t get the bonus ($25) and you’ll waste a link that someone else could use. Instead, use this link:

IMPORTANT

If you are under 18 you will need to open a joint account with someone who is at least 18 years old. (Your mom or dad would probably be the best choice) This isn’t a big deal, but you’ll need that person’s name, address, and social security number in addition to your own.

ING Direct $25 Savings Account Opening Bonus

ING Direct $25 Savings Account Opening Bonus

Happy Saving!

I’m 18! What Should I Be Doing With My Money?: Learning The Basics of Money Management

Today’s post is a continuation of this week’s series: “I’m 18! What Should I Be Doing With My Money?“

Turning 18 is a good time to really get your finances in order. Whether your future plans involve college, trade school, or just simply entering the workforce, it pays to have your financial “house” in order.

Here’s the foundation:

• Savings account
• Checking account

These two accounts will form the basis for your finances. You might even have these already.

The savings account is the place where you will keep your money that you don’t need day-to-day. Your emergency fund should be here along with money you might be saving up for a car or college textbooks.

Your checking account will be used to store money that you need on a daily or weekly basis. You can pay bills out of this account using checks or a debit card. The part of your paycheck that isn’t used for savings should be deposited here.

These accounts can be opened up at your local bank or you can use an online bank like ING Direct. Wherever you decide to do your “foundation” banking, make sure it’s convenient and fee-free. Look for student checking and saving accounts; they don’t usually have high balance requirements, if any, and they rarely charge BS “maintenance” fees.

The purpose of these accounts is to allow you to run your finances with safety and efficiency. Keeping all your money in paper bills under your mattress is not safe. It’s just plain dumb. Writing checks or using a debit card will provide you with an easy to read record of how you’re handling your money.

Once these accounts are setup, you need to start:

• spending less than you earn.
• paying yourself first.

The first one is simple: don’t run up credit card debt. You can use a credit card for purchases if you’d like, as mentioned in the last post, just make sure you don’t swipe more than what you can pay for. Going into some student loan debt is acceptable, but should be avoided if possible. Exhaust financial aid like grants and scholarships before taking out loans.

The second is simple too, yet millions of Americans don’t do it. Pay yourself first means that you automatically save a portion of your income. You set aside this money before you start spending on other things. Think of pay yourself first as a bill you send out to your own savings account. This bill always gets paid. It doesn’t have to be much. Can you find $20 dollars a month to save? $50? $75? $100? Start small. As they say, Rome wasn’t build in a day.

Follow the ideas outlined in this post and you will be miles ahead of where other new adults (and many older ones) are.

If you’d like, you can jump back to the previous post in this series: Open a Credit Card or jump forward to the next post: Saving for Retirement.

Anatomy of an Overdraft

“That won’t happen to me”.

This statement rang out in my mind the day I opened up my 1st checking account. As I politely listened to the bank employee explain to me that if I spent more money than I had, I would overdraft and owe the bank 35 dollars, I decided that I would never need this piece of information.

I would never owe the bank 35 dollars because I wasn’t going to spend more money than I had. I was never going to fall behind on my checkbook register entries. And I was never going to buy stupid crap and waste money.

I was wrong.

Here’s the setup:

In June 2008, I went to Indiana for cross country camp with my teammates.

Throughout the week, I used my debit card to pay for food at the numerous fast food restaurants we visited. No problems there. Then, the Walmart trip happened. While there, I found a FM transmitter for my iPod that I had to have for the five hour car ride back to Ohio. And it was only 20 bucks. So I bought it.

I arrive back home on a Saturday afternoon.

On Sunday, I check my account balance. It’s something like 35 dollars. I go to Kohl’s and purchase a gift for Father’s Day. I knew this would bring my account down to just a few dollars.

On Monday, I call my bank’s automated phone system to check my account balance. The computerized voice tells me chillingly that “Your current account balance is neg-a-tive seventy dollars.”

Um…no. That is not possible. I know my balance is low…like single digits low, but absolutely not NEGATIVE.

But it was…so what happened?

Two fast food transactions I made with my debit card didn’t actually go through the system until Monday. So when I called the bank on Sunday, it told me I had around $35.00 dollars. Except I didn’t. $15.00 dollars had already been spent on food at Wendy’s and McDonald’s, the computer just didn’t know about it yet.

Then I spent 27 dollars on my dad’s gift. And the fast food  transactions were processed.

Banks process transactions highest dollar amount to lowest dollar amount, so I didn’t overdraft on the gift purchase. I over drafted on the two fast food purchases.

So now, there’s 70 bucks down the drain. (35 overdraft fee X 2=$70.00)

But wait, there’s more!

Once I knew my account was negative, I sighed heavily and said “OK. I messed up. I’ll make a trip to the bank in a day or two and withdraw some money from savings and put it in checking.”

My bank charges me 8 dollars per day that my account is negative. So by waiting a day to get off my ass and fix a mistake, I lost 8 more dollars.

Total damage= $78.00. Ouch.

Looking back, I realize that I made a few obvious mistakes.

Mistake #1:

Relying on mental math. I was going around the entire week adding up rough amounts that weren’t very accurate. Then, I went to Kohls like an idiot knowing full well that my balance was dangerously low.

Mistake #2

I wasn’t keeping up with my checkbook register. If I had been,  I would have known to stop using my debit card before I over drafted.

Mistake #3

Not knowing what fees my bank charged. I honestly had no idea that I would be charged extra fees for leaving my account overdrawn. Always read the fine print!

So there you have it, an overdraft from start to finish. Just how easy is it to overdraft?  Very. And yes, it can happen to you and it will if you aren’t careful.

The Benefits of Direct Deposit

Are you running to the bank every time payday hits? Filling out deposit slips and signing checks every two weeks?

Stop.

There’s a better way. It’s called direct deposit.

Direct deposit uses the Automated Clearing House system to electronically deposit your paycheck into any checking or savings account you choose. This has a ton of benefits:

Faster- you will almost certainly receive your funds sooner through direct deposit. At my last job, I received my “paycheck” a whole 2 days before the paper checks would arrive.

Safer- it’s incredibly easy to lose a paycheck, especially if you don’t get to the bank immediately. Thefts happen. Wallets are pick-pocketed and cars get broken into. No petty thief is going to be able to steal your direct deposit.

Frugal-direct deposit means no more gas wasted on trips to the bank.

High tech- I think it’s just plain cool that technology can do this. Using paper for paychecks just seems old fashioned now.

I think the biggest benefit is just the simplicity of it. No more driving to the bank. No lost checks. The money is there automatically. And even more important: there’s no temptation to cash out part of the check.

I know what you’re saying.  “This is awesome, how do I set it up?”

It’s simple.

You Need:

• Your bank account number
• Your bank’s routing number
• Employment at a company that offers direct deposit

You can find this information on a check or in the paperwork you received when you opened the account.

Simply give a voided check (you void a check by writing “VOID” in big capital letters on the front of the check in pen)  to your boss or whoever manages your company’s payroll. If you work for a large corporation, you may be able to do all of this online.  If you don’t have any checks, you can just write down the two numbers and your place of employment will know what to do.

Once that’s completed, you’re done. No more work is necessary. You’ll start to receive your paycheck directly in your bank account within a pay period or two.