Of course, what you plan on doing and what you end up doing may change quite a bit if there's enough marketing aimed at you, and this sounds a lot like shoppers throwing down the gauntlet to retailers.

"Many U.S. consumers turn permanently tight-fisted: survey" [Reuters]
(Photo: Lee Nachtigal)

A few years ago, I signed up for Bank of America's "Keep the Change" program. With Keep the Change, every charge to your debit card is rounded up to the nearest dollar, and the difference is automatically deposited in your savings account. The idea is that you save a small amount with each purchase without even thinking about it, which gradually adds up over time.

So far, so good. However, somewhere along the line, Bank of America started charging a $5 monthly maintenance fee on the account. I was never formally notified of this additional fee, and so I didn't even realize it until I noticed one month that my savings account balance had gone DOWN instead of up. It turns out that I wasn't even accruing $5 worth of change per month, so I was losing more money due to the maintenance fee than I was saving via Keep the Change!

I called Bank of America and they explained that I could avoid the maintenance fee either by making a minimum deposit of $25 into the account each month, or by maintaining a minimum balance of $300 (I had $250). Of course, these terms aren't detailed anywhere on their website (at least not that I could find); Keep the Change is described as a "free service," and the only stipulation is that your savings account has an initial $25 balance.

In summary, if you prop up your savings account by depositing more money into it than you'll ever realistically save with Keep the Change, you'll avoid the fees - but then you might as well not even bother with the program in the first place. And if you don't, you'll never even reach the $300 balance on a new account as the maintenance fee could well end up costing you more than what you're saving!

The easy solution: find out what you need to do to avoid maintenance fees on your savings account, and if you agree to the requirements, follow them every month.

In this case, scheduling a $25 transfer from checking to savings every month would suffice, but James never intended to use the service in that manner. Not every bank product is designed to eat up your money, but if you're not careful you can get hit with unnecessary fees, so always take the time to look for ways the bank can charge you and then make sure you're willing to do the opposite—or walk away from the offer.

Update: I failed to address James' real issue, which is that he says BofA never told him about the fee. If your bank institutes a new monthly fee and doesn't tell you about it, contact them and request a refund. If they refuse, tell them you plan on reporting them to the appropriate agencies, and then follow up on that threat. (You might also want to move your business elsewhere just on principal.) Banks do make mistakes whether they like to admit it or not, especially when they're "too big to fail" and running themselves ragged trying to find new ways to generate revenue.

(Photo: Nieve44/La Luz)

I signed up for Wachovia's Way2Save program, which gives you 5% interest on your savings the first year. You can only deposit $100 a month into the account. The only other way to put money in is by account activity (paying bills, etc). So I scheduled a lot of $1 bill payments to my credit cards every day to try to get as much money in the savings account as possible.

Wachovia put a temporary hold on my checking account without telling me. There was no phone call, email, or online notification. So imagine my horror when I got emails from their billpay service saying they couldn't withdraw the money from my checking account and were reversing the bill payments. I had deposited several hundreds in cash (in person) into the checking account, so I knew it couldn't be because the funds hadn't cleared. And the bill payments totaled only around $200 anyway.

When I called, it turns out that Wachovia had put a temporary hold on my checking account, freezing the funds. No one was able to explain why, but they said the hold was gone. They weren't able to stop the payments from reversing.

The end result? My credit cards are charging me over $5000 in reversed payment fees (150 reversed payments * $39 average per returned payment, you do the math). In particular, Chase has canceled all my cards because of the multiple returned payments. I called my Chase small business card account, and the specialist at Chase said they could not do anything, or even waive *some* of the returned payment charges, unless I could get Wachovia to send a letter saying the returned payments were the result of bank error.

I called Wachovia, and they refused to do anything. Their stance is that it was not a bank error because I scheduled the bill payments, not them. There were no notes on my account (because I had talked to someone in bill pay, which apparently is a contracted out service, not part of their own system). They had no record of any hold on the account, and even if there was a hold, it wasn't their responsibility because I had scheduled the bill payments myself. They also mentioned deposit availability, though I pointed out that I had deposited cash. I'm going into a branch on Friday, but I don't think they will write anything for me either.

I haven't called the other credit cards yet. I'm dreading calling my other credit cards to see if they will waive anything. So in the end, I am stuck with this fiasco. At least Christopher's problem was caused by the same bank charging him the fees. They have the power to waive the fees. What happens when the problem is caused by a different bank, and that bank won't help at all, not even write a stupid letter?

I hate Wachovia. I don't have problems with it if the problems were caused by my scheduling bill payments, and there wasn't money in the checking account. I do have problems when the checking account says I have several hundred dollars available, I had deposited more than enough cash to cover the bills the previous week, and there is NO notification that a temporary hold had been put on the funds. How is that my fault and not the bank's???

Do you have any EEOB-type email addresses I could possibly use to write to the service departments at Chase, Bank of America, Discover, Amex, and Citibank?

Or any advice on how to handle the situation? Ways I can convince Wachovia to write the freakin' letter? Or am I stuck sucking it up?

The wildest thing about this is the idea that Wachovia would have no record of the minute-to-minute status of your accounts, including your deposits and when funds became available. You should go into a Wachovia and have a nice long sit-down with someone there, where you both go over the account item by item if necessary, until they have to admit that there is not a single reason those payments should have been reversed. After all, if they don't have a reason for—or even a record of—placing the hold, it should be easy to determine that you always had the funds necessary to cover your payments.

For now, keep this with Wachovia. It's on them to correct their mistake, and to provide you the necessary evidence you need to get your other creditors to reverse the charges and re-open those accounts. Unfortunately our Wachovia contact info is getting pretty dated (although now there's a Twitter contact), but maybe you can get somewhere if you EECB Wells Fargo. (Tell them you're a dirty telemarketer who wants to rip off old people and they should prick up their ears.)

For other Wachovia customers, you might want to find a less dangerous way to save your money. Tying it to bill payments is pretty risky, and you don't have to have an exceptional case like Susan's to wipe out your gains—a single error, whether by you or Wachovia, could easily do it.

(Photo: suburbandollar)

Flexo writes:

Step 1. When you purchase an item, make note of the cost of the extended warranty. Don't buy it.

Step 2. Transfer this amount to a special savings account that you will not touch until one of your "protected" items needs to be repaired. ING Direct lets you create sub-accounts, one of which you can name "My Extended Warranties" or "Warranty Fund."

Step 3. Repeat steps 1 and 2 for all products you buy that might break or are associated with an extended warranty. This will build up a sizable Warranty Fund in your own name at your own bank earning interest for you.

Step 4. When one of your self-insured products breaks or otherwise needs repairs, dip into your Warranty Fund. Try to avoid using your Emergency Fund unless the Warranty Fund doesn't cover the full expense and the product must be fixed or replaced.

Online banks ING Direct and Emigrant Direct both offer savings accounts with 1.3 percent APR. Wells Fargo, by comparison, generously gives you a whopping 0.16 percent interest on savings.

How to Create Your Own Extended Warranty [Consumerism Commentary]
(Photo: pashasha)

Revolving credit debt, mostly through credit cards with balances that are not paid off immediately, dropped by an annual rate of 13.1 percent in August to $899.4 billion, the Federal Reserve reported.

[...]

Indeed, the personal savings rate climbed to 4.2 percent in July, according to government data, up from the near-zero levels of just a few years ago.

"Consumers Keep Paying Off Credit Cards, Building Up Savings" [Washington Post]
(Photo: leafy)

Some highlights:

• Hide money from yourself. - By direct depositing money into a secret checking account or his 401(k), Corey could pretend that he never had that money in the first place.

• Only get cash once a week. - By taking out $100 a week and either stretching that cash or not going out once it was gone, he was able to limit entertainment expenses.

• Use a coin purse - Whatever, Grandma. This is actually good advice - either to keep from wasting that pocket change (as Corey did) or saving the coinage, rolling them up, and depositing it in the bank. Money earns more interest in a savings account than between your couch cushions.

• Keeping busy through side gigs - Constantly working not only earns extra cash, but keeps you too busy to spend the money you already have.

Millionaire By 30: How He Made It Happen [Mainstreet]
Amazon.com: A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty [Amazon]

(Photo: Shika Kaoin)

You can apply online at USAA.com or over the phone at 1-800-531-USAA. Unfortunately, cool features like depositing checks via iPhone or scanner are only available for full-fledged USAA members. Fortunately, however, cool features like the best customer service in the business are open to all.

You also get free checks and up to $15 in ATM fees/month covered. To apply for online banking, all it takes is a $25 initial deposit. Here is the list of USAA products available for non-military members:

USAA's investment products, most bank deposit products, life insurance, and shopping and discounts are available to other individuals. While auto and property insurance policies are not available due to membership eligibility requirements, we can still help. USAA's General Agency has a 20-year relationship with Progressive Insurance.
The following products are available to other individuals:

Insurance -
Life insurance
Auto insurance not available through USAA. Please call 1-888-870-8096.
Property insurance not available through USAA.

Banking-
Checking
Teen Checking
Savings
College Checking
Certificates of Deposit (CDs)
CD IRAs
Youth Savings
Prepaid Card

Investments - All products
Shopping and Discounts - All products

Former Consumerist and decidely non-military affiliate Carey Greenberg-Berger got himself a USAA account this way and loves it. He flashed his card at me recently like it a rare hologram collectible trading card - because we're just consumer nerds like that.

Become a Member [USAA] (Photo: jeku arce)

The biggest deterrent to rate chasing, which is the shuffling around of your money between savings accounts, is the transfer time. If you have to transfer your funds from an online savings account to a regular brick and mortar checking account and then to another online savings account, it will take well over a week. One simple strategy is to link your two online accounts together and cut that transfer time in half.

All you need is the bank's ABA routing number and your account number. If you have a check, you can find the ABA routing number, a nine digit number, at the bottom of the check. Usually, the ABA routing number is the left most number, followed by an account number and the check number. If you don't have a check, you can look up your bank's ABA routing number at this website or call and ask. If you search online and find the number, you can confirm it by using a reverse ABA routing number lookup too. Some banks have several ABA routing numbers, the result of mergers and acquisitions, so double check you have the correct one.

Some banks require a voided personal check to link up accounts. This is mostly to ensure you don't enter in the wrong numbers and cause a big headache, but it's usually not a requirement. You can always call and say you don't have any checks, they may acquiesce and link an account without the check.

To save you a bit of time, here are the ABA routing numbers of a few popular online banks:
Ally Bank - 124003116
Dollar Savings Direct - 226070403
E*Trade - 256072691
Everbank - 063000225
FNBO Direct - 104000016
HSBC Direct - 022000020
ING Direct - 031176110
WTDirect - 052173464

This may be one of those "head smacking" type of ideas but still worth mentioning.

Jim writes about personal finance at Bargaineering.com.

Photo: mundane_joy

Also, heavy coupon users tend to live in affluent suburban areas or in "comfortable country areas" on the fringes of large cities.

Coupon use on the whole has increased after our economy went to hell, but the Nielsen study seems to show that affluent, suburban (or "country spread") customers are the ones most smitten with coupons.

So do low coupon users not use them because they don't offer savings on the sorts of products they buy? Or is it just harder to find the coupons, make time to sort them, and then find a store to accept them? Or is coupon clipping a cultural activity that poorer homes don't participate in? We have no idea, but we suspect the first reason, partly because Nielsen points out that the survey shows that there are "real benefits to companies deploying coupons in their marketing mix"—meaning it's a great marketing tool to drive more purchases, whether it creates real savings or not in your household.

"Nielsen: Affluent Consumers More Likely to Be Heavy Coupon Users" [Reuters]
(Photo: eschipul)

One of the biggest risks to saving with a CD is that you may need the money before it matures. On CDs with maturities of less than twelve months, the penalty is usually between 30 and 90 days of interest (one to three months). On CDs with maturities of twelve months or more, the penalty is usually 180 days (six months) of interest. If you close a CD within three months of opening it, you could end up losing money.

The solution? Divide your savings into multiple CDs so that if you do need access to the funds, you don't have to withdraw the full amount of your savings all at once. This lets you take advantage of CD rates while mitigating one of their biggest risks.

For example, let's say you have $5,000 to save. You should open five $1,000 CDs so that if you need the money before maturity, you only have to cash in CDs in $1,000 increments (and thus pay penalty in the smaller increments). There is no additional financial cost to opening up multiple CDs, it'll just cost you time.

Have you used this strategy?

Jim writes about personal finance at Bargaineering.com.

Photo: paulcarnevale

(Thanks to G.S!)

We are, to borrow from Seinfeld, "careful with money." We see people buying and spending and traveling and bingeing, and we have to wonder: are they better or worse off than we thought? Are they funding their retirement accounts, loading up the credit cards, or something else all together? It's not a topic that can be easily broached unless you somehow stumble upon common ground, often to commiserate. Sometimes it's necessary though, and can even help put your own financial house in order.

For the last seven years, I've had a particular friend repeatedly ask me about my retirement planning. I'm 28. These regular inquiries have had their desired effect, and I now give considerably increased thought to my retirement planning, which has led to a series of new conversations with other friends, who wonder why I talk about the topic so much these days. But those conservations have led to knowing how a friend, who recently finished the Peace Corps and then worked for two years, was able to buy her new five-bedroom house. Or knowing the income ranges, savings plans and rent or mortgage payments of dozens of my friends.

The recession might have made our country more open to having honest discussions about personal finances, at least in relation to the political conversation about the economy, but the recent economic crisis also highlights how important it is that these discussion become more regular and widespread. At the same time, all these conversations I've had have highlighted how rare it still is for people to feel safe to regularly engage in such discussions.

You can talk about money with accountants, brokers, and the occasional human resources manager, but they rarely appreciate your full financial picture; they're also not always the people you'd want to sit down with for a deeper conversation about your financial health.

So who do you talk to about your finances?

Talking about Personal Finances — the Final Taboo? [The Huffington Post]
(Photo: *clairity*)

This unusual CD is federally guaranteed by the National Credit Union Administration and pays between 1% and 1.5% annual interest, a bit lower than conventional rates. In 25 weeks, the program has attracted about $3.1 million in new deposits, often from people who have never been able to set money aside.

[...]

People love to gamble and hate to save. With Save to Win, says Communicating Arts Credit Union President Hank Hubbard, "You are sort of betting, but there's no losing." If we are to become a nation of savers again, we will need more innovations like this — and the regulatory flexibility to allow them.

The program, developed by a Harvard Business School professor, is aimed at people who have trouble working out probabilities and wouldn't otherwise have a CD. What do you think? If the program was expanded beyond eight Michigan credit unions and offered a better interest rate, is this a type of gambling you could get behind?

Using the Lottery Effect to Make People Save [The Wall Street Journal via Freakonomics]
(Photo: Jeremy Brooks)

1. Pay Yourself First: No, not with an Xbox, but by saving religiously. Finance your emergency fund, retirement accounts, and general savings account before buying toys.

2. Harness The Power Of Compounding: J.D. over at Get Rich Slowly writes, "I wish somebody had shown me a chart demonstrating the difference between paying a credit card company 18.9% a month on $10,000 versus a bank paying me 3% interest on the same amount."

3. Avoid Lifestyle Inflation: More money should mean more saving, not more spending. When you get a raise, resist the urge to live a better life, because once you start, it's impossible to go back.

4. Avoid The Chains Of Debt: Again, J.D. says it best: "Debt is slavery." For young people, there is no such thing as "good" debt. Unless you're buying a house or earning a career-making degree, you should not be in debt, period.

5. Save On Things Big And Small: Scrutinize the big buys, yes, but also the little ones. They add up faster than you would expect. Consider your grocery list—you do shop with a list, right?—it's not a series of huge line items, but lots of little missed chances to save.

What We Wish We Knew When We Were Younger [Get Rich Slowly]
(Photo: Material Boy)

Blogger Boston Gal has gone without central air for the past two years, and considering doing away with it altogether because it's saved her more than $150 some months. It's a bold move to sacrifice physical comfort for financial gain, but one the writer says is well worth it. Her tips for staying cool without electrical help:

High thread count sheets like these - 600 Thread-Count Sheet Set. If you look around you can find affordable sets (like the one I linked to). The tighter the weave of the sheets the cooler they feel. I also find changing your sheets more frequently really helps.

Having a pitcher of ice water and a glass handy at all times. Keeping yourself well hydrated helps beat the heat. If ice water is near at hand you will keep drinking. You can also position the ice filled pitcher between yourself and the fan to give the air a bit of a cool kick.

Of course, this advice doesn't apply to anyone in the Sun Belt. Any savings in electric bills would be negated by funeral costs.

Thinking about banishing central air from my home [Boston Gal's Open Wallet]
(Photo: Hesweptlime)

Bloomberg says:

Confidence among U.S. consumers fell in July for the first time in five months as mounting unemployment and depressed wages shook households.

The Reuters/University of Michigan final index of consumer sentiment decreased to 66, in line with forecasts, from 70.8 in June. A preliminary reading was 64.6.

So far, the economy has lost 6.5 million jobs and unemployment might reach 10% by the end of the year. Meanwhile, housing prices haven't yet stabilized.

According to the article, consumers are saving their money and shopping at discount retailers such as T.J. Maxx, Marshalls, and 99 Cents Only Stores, while cutting back on eating out — even at fast food joints.

Yum Brands, the parent company of Taco Bell and Pizza Hut, cut its outlook for same-store sales growth this year.

Consumer Sentiment Index in U.S. Decreased in July (Update2) [Bloomberg]
(Photo:glory_box829)

Ominously emblazoned with Chase and Visa logos, the pamphlet gives you a rundown on money-management nuts and bolts, such as saving (pay yourself first), budgeting (question your needs and wants), managing debt (admit you've got a spending problem), caregiving (establish power of attorney) and credit cards (load up on those tasty Chase Visa cards!)

That last one was a joke, but watching your parents — or especially yourself — barrel into retirement headfirst with no clue as to what they're doing is just sad. So forward the link to anyone in need of a financial summer school crash course.

50 Ways To Love Your Money [AARP via San Antonio Express-News]
(Photo: DCvision2006)

"Do you get a deal at the dollar stores?" [Blogging for Change]

• Choose Lunch Over Dinner: Skip past dinner plans and instead meet your friends for lunch. The meals are almost always cheaper, and you can usually find worthwhile deals.
• Hunt For Specials: Look for local places with lunch or brunch specials, or two-for-one entrees.
• Free Bread = Leftovers!: Our father used to warn us that we were going to ruin our appetite gorging on bread, and he was right—though we didn't care, and he certainly didn't mean it as a saving tip. Load up on whatever freebies you can get—bread, chips, salad—and bring part of your meal home as leftovers.
• Skip Appetizers And Dessert: Both are usually overpriced and unnecessary, considering the size of most entree portions. Skip them and save.

The good thing about keeping your money in a bank is that it's insured. If you're not sure whether to trust the bank or credit union, look it up at Bankrate.com to see how it's rated.

"Tel Aviv search for mattress containing $1M life savings" [CNN]
(Photo: oddsock and i'm george)

You may have asked yourself, how the heck does this happen? How do you forget to redeem a bond?

It's actually quite simple. Back in the days before TreasuryDirect, you would buy your bonds at your local bank. You would be issued a paper certificate. Most people filed these away in a safety deposit box or stuck them in with their other financial files. Series EE and Series I bonds earn interest for thirty years. After 30 years, they stop earning interest and you have to redeem them. People simply forget they have them!

With TreasuryDirect and electronic bonds, you don't have to worry about that. After thirty years, the bonds automatically convert into a Zero-Percent Certificate of Indebtedness. C of I is simply their fancy name of a certificate that earns nothing. From here, you can withdraw the funds into your bank account or use it to buy another bond. You can always convert a paper bond into an electronic bond.

If you've located a paper bond and don't know how to redeem them, TreasuryDirect has some great resources explaining it:
- Redeeming Series I Bonds
- Redeeming Series EE Bonds
- Special situations for both - Children's bonds, deaths, residency outside the United States

Jim writes about personal finance at Bargaineering.com.

(Photo: blitzcat)

Lynn Lawrance of the Financial Network Investment Corp. in Dallas told the paper that answering the following questions will help you get a feel for where you stand financially:

• Divide your current gross annual salary by $10,000—the result is how many months, on average, it will take you to find a job with an equivalent income should you lose your current one.
• Now divide your emergency savings by your monthly expenses to see how many months you can pay for everything. Do you have enough months covered?

That's just a quick summary of the stress test, however. You can complete the whole thing at the Dallas Morning News website, and even get a final score between 0 and 100 that will help you get a clearer picture of how worried/smug you should be.

"Face the numbers with personal financial "stress test"" [Dallas Morning News]
(Photo: stuartpilbrow)

The U.S. Treasury Department has a site called TreasuryDirect where you can enter a person's SSN and see if there's any record of unredeemed bonds issued since 1974 under that name.

If you don't want to go that route, check out this page for deatils on when each series matured.

TreasuryDirect [U.S. Treasury Department]
(Photo: tao_zyhn)

UPDATE: Actually, this is just the second conversion. The third and last conversion will happen in the fall.

(Photo: mr.hodgson)

"30 Deal Hunters to Follow on Twitter" [Savings.com]

According to the article, the employees called the police, "who ran a background check on the owner and checked the serial numbers on the bills stashed inside the tower." Nothing suspicious turned up, so they returned the money.

What kind of person stashes his savings in his computer tower and then forgets about it? The same kind who takes his computer to Best Buy for repair. Hooray! We were wondering how to spin this into something snarky and we managed to do it!

Pete, who sent us the tip, notes that there's an important lesson here: "Before you take your computer in for repairs, please remove your money."

"Best Buy employees find cash inside computer" [St. Louis Post Dispatch]
(Photos: karindalziel, AMagill)

My Money Blog raises this issue when he highlights quotes from the latest Warren Buffett book. Specifically, he notes how Charlie Munger, Buffett's right-hand-man, took an hour each day and worked on side projects. Eventually this time and effort built up until Munger had developed a very profitable business and found himself a rich man. Here's a quote that summarizes his rationale for taking time for himself:

Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, ‘Who's my most valuable client?' And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.

Just think what we could all do if we took some time each day and set it aside to write that book, develop our hobby into something profitable, or work on that one idea we've had for the past five years. Over a long period of time, the impact to our personal finances could be quite dramatic.

It's an issue worth considering. What would you do if you took an hour (or maybe even less, as long as it was consistent) and worked on improving your finances? What would the results be five, ten, and twenty years from now?

Buffett on Charlie Munger: Work For Yourself An Hour Each Day [My Money Blog]

FREE MONEY FINANCE
(Photo: risastla)

One of the tips has advice for creating your own pet food, which might be useful to those contemplating the BARF Diet. Another tip warns not to fall for expensive food with fancy labeling or a well-known name, which probably won't impress your pet—if it were up to our dogs,they would just buy Butts 'N' Trash and eat that every day.

Feeding Bo Doesn't Need To Break The Obamas' Bank [Consumer Reports]

That's probably because fewer respondents are receiving refunds this year. In 2008, 20.0% said they did not receive a refund, while this year 33.9% said they didn't. It's also probably because 56.74% agreed with the statement, "I have made a concerted effort to cut back in the past few months because of the weakening U.S. economy," compared to doing nothing or saying that they save money regardless.

PriceGrabber also asked those who are spending their refunds just what they plan to spend them on. Here were the responses:

Note: Whenever we post survey stuff like this, a lot of you ask for details about how the survey was constructed. We're one step ahead of you this time—we asked for the same info, and here it is.

2009 Tax Rebate Survey Methodology

For the 2009 PriceGrabber.com Tax Rebate Survey conducted between April 7, 2009 and April 22, 2009, PriceGrabber.com designed and fielded a Web survey to reach each consumer who recently made an online purchase from one of our 13,000 retailers and sellers. After completing an online purchase, each online consumer received an email confirmation, which included the URL to the Web-based survey. Of a total of 359,233 US online consumers invited to take the survey between April 7, 2009 and April 22, 2009, up to 1,574 adequately completed the survey. The online survey was comprised of 7 close-ended questions. Respondents were asked about their plans for their tax refund money, their situation in the current state of the economy, and additional demographic data.

The sample set reflects the online consumer population by age, gender, neighborhood type and total income level over the 15 days the survey was administered. Of the total respondents that opened the survey, 86.5% completed the survey and 13.5% partially completed the survey. The final 1,574 respondents used in this study were controlled for quality. Respondents that incorrectly answered a trick question and/or completed the survey considerably faster than the average respondent speed were removed from the sample set. The maximum sampling error for the survey data based on the sample of 1,574 respondents is +/- 3 percentage points at the 95% confidence level.

(Photo: NickStarr)

Originally, Orman's goal was maintaining a high FICO score by having paid-off credit cards on your account. This served a second purpose, too: your active, paid-off cards provided a source of quick cash in case of a huge life emergency.

Now that credit card companies are slashing credit limits and unexpectedly closing accounts on customers—even ones with stellar payment histories and low debt-to-credit-limit ratios—Orman says all bets are off.

So here is the problem. If you do not have a stash of cash in an emergency fund and you have been using all your extra money to pay down your credit card debt and they keep closing your cards down-what are you going to live on if you lose your job? Chances are you may not have any available credit, or too little credit, to use in the event you are laid off. Nor will you be able to get a new card if you are unemployed.

So what's the right size for an emergency account? Orman says 8 months of living expenses, and even if it takes you a couple of years to build that up, this is no time to trust that your credit cards will be there for you in the months to come. Once you've hit that magic number, go back to clearing off those credit cards.

What do you think is the right amount of an emergency savings to build up, especially if you remove the safety net of open lines of credit from the picture?

"A Change in Credit Card Strategy" [SuzeOrman.com] (Thanks to Greg!)

There was a bird-like lady in front of me, clad in soft designer blacks. The Penny Arcade counted up her change. "You won!" I said. "Not really," she replied flatly. She got $19. When I took my ticket up to the counter to get my money, I looked back and there were at least seven people lined up to use the Penny Arcade. The woman at the front of the line was dumping an entire purse of change into the machine. It was the busiest I've ever seen the Penny Arcade. Don't know whether that's just what people do on a Sunday or the R-word, but people are cracking open their piggy banks and scrounging under their couch cushions. Above is is the crappy glarey cellphone picture I took. All those people on the right (plus the dog) are waiting for their turn at the spare change counting machine.

General Housekeeping

• Batteries: Toss new ones in your smoke and carbon monoxide detectors. If your smoke detector is more than ten years old, replace it; same thing for any carbon monoxide detector more than five years old. If you rent, your landlord may be required to pay for new detectors.
• Vehicle Lights: "Inspect the entire lighting system in your car to ensure that all lights are working properly. Clean headlights and make sure they are correctly aligned according to the owner's manual."
• Update Your Family Disaster Plan: What, you don't have one? Well write one! You need to know where you'll meet and where you can find necessary supplies. 2009's special edition disaster plan can also include likely locations for bread lines and tin can fires.

• Adjust Your Thermostats: Taking advantage of the extra sunlight can shave up to 20% off your heating and cooling costs. Lower the thermostat by a few degrees at night, and if nobody's home during the day, take advantage of your thermostat's scheduling features for even greater savings.
• Replace Old Bulbs With Compact Fluorescents: Yeah, yeah, we know you think their light is too harsh and they take too long to warm up. Those might have been valid objections back when people had money to burn, but now the bulbs are better and passing up the chance to save more than 25% on your lighting bill just seems dim.

Boise beautician Heather Wood has traded haircuts and pedicures for years of day care, kids' clothes, a paint job for her car, an oil change, a set of professional portraits for her family and dental cleaning.

"It's fun, and it builds a whole different kind of a relationship," said Wood, who has five children. "They're getting what they want and I'm getting what I want. I would much rather do that than make cash most of the time."

These days, making cash isn't always an option, so many have decided it is worth the effort to trade, say, an outgrown kid's bike for a neighbor's lawnmower, or a massage for some gardening supplies.

"I'm finding it a little bit difficult to sell anything right now," said Jeremy Kildow of Nampa, who chose bartering when he decided to get rid of a $1,000 camera, a kayak, a stainless steel kitchen range and other items.

Kildow put his stuff on the Boise-area Craigslist site under "barter" and suggested horses, pack mules, a four-wheel-drive truck, a computer or a flat-screen TV in exchange. So far, he's had an offer of a truck, some computers and a wedding ring.

The AP brings us a few tips for successful bartering agreements from the University of Illinois, which apparently has some sort of experience in bartering...

• 
  In General
• Figure out who's buying what in advance.
• Assume nothing. Agree on the specifics of everything in advance, in writing if needed, and make sure that nobody is walking around with unreasonable expectations.
• 
  When You Provide A Service
• Please, don't offer to do things you can't do or you'll ruin bartering for the rest of us.
• Provide regular and clear updates on your end of the deal, especially if something is going wrong.
• Don't forget to pay taxes on any income earned. Tax Cat tells us more information is listed in IRS Publication 525, Taxable and Nontaxable Income.
• 
  If You Receive A Service
• Make sure the other person is qualified to do the work.
• Go over everything in advance so you understand exactly what you're getting and if anything is required from you.

A reader wrote into the March issue of Real Simple:

Rather buying the same items separately, my friends and I buy in bulk from warehouse clubs and share the cost. We buy chicken, bags of fruit and vegetables, packs of hair products and condiments. (Yes, we have bought a gallon of mustard and separated it into smaller containers.) Not only do we save but we also get to spend time together, even if it's just running errands.

You get the bulk rate discount but don't have to have an institution-sized drum of mayo. Great idea!

(Photo: miss_rogue)