Nancy Kvamme

With direct deposits and auto payments that are available now, you may not be checking your accounts like you used to. It is important to either check your bank statements monthly or check it more often if you have online access to your bank accounts.

This morning I happended to check my bank account, after making a deposit of my paycheck yesterday. I was surprised to see it had not been posted yet. I called the bank to check the balance to make sure it was right. The deposit had not been recorded yet.

After some research they did find the deposit and it had not been posted. It is also important to check your accounts to make sure debits are not taken from your account also by mistake.

Several years ago, there was a quite large deposit made to my savings account. It turned out that it was supposed to be added to someone else’s account.

If a deposit it not posted to your account, you may be writing checks or making other purchases that will casuse your account to be overdrawn. If it is the bank’s fault, they may refund overdraft fees but it would still be a hassle.

Even if you have bills paid automatically, it is also important to take a look at your monthy statement to make sure you are not being billed for items you no longer need or use. There may be membership fees on your credit card that you know longer use but are still paying for.

Nancy Kvamme

There may be circumstances that come up where it is necessary to take money from your emergency fund or borrow money but in most cases it is important to live within your means. If your financial circumstances have changed it is important to change your spending to match your income. The longer you wait, the more financial trouble you will get into.

There were a couple of guests on a recent Suze Orman Show that had a problem living within their means.

One of the guests and her family were going into debt by $3,000 each month for a number of years. Usually, in cases like this, Suze goes through their expenses and tries to find areas they can cut back on. In this case, she could not find $3,000 worth of expenses without the family making major changes in their lives. They have a son that is getting ready to go to college and she was shocked to find out that she would likely not be able to help him get financing for college.

One of the segments on the Suze Orman Show, is “Can I Afford It?” where callers call in with their financial information and something the are thinking of purchasing to see if they can actually afford to purchase it. One of the callers was a 57 year old woman who wanted to take her daughter who was graduating from college on a safari. The cost of the trip would be $28,000. Her monthly income is $1,961 and expenses are $2,095 so she is spending more than she brings in each month. She has $29,000 in liquid savings and no money saved for retirement. So needless to say she was denied. She is spending more than she makes and wanted to spend all of her savings on the trip.

Trying to get Suze to change her mind she said she wanted to take her daughter on this trip because she had worked so hard at school. And she is getting $80 a month rent from her son since he uses her garage or something for his band to practice in.

While dining out recently I overheard the conversation at a nearby table turn to credit card use. One diner, a young woman in mid 20s was talking about a friend who used credit cards mainly to get the reward points and could not afford to pay off the balance in full each month. She had tried telling him it was a bad idea to do this unless you had the money to pay it off or knew you would be getting the money soon. Another diner agreed that you should only use your credit card if you could afford to pay it off after the grace period.

Credit cards may be a convenient way to make purchases but it is important to keep in mind what your balances are and if you are able to pay the balances in full to avoid interest charges which may minus out any rewards you may have received.

If you do have credit card debt you may be considering transferring your balances to a credit card with a lower interest rate. There are some things to consider before transferring your balances.

Here is a recent article I wrote about Reasons not to Transfer credit card balances to other cards

Following are some other articles I have written about using credit cards.

Save money with good credit

Reasons to stop using credit cards

Why credit cards are a slippery slope to heavy debt

Pros and Cons to living debt free

Advice on using credit cards

Nancy Kvamme
Nancy Kvamme
Nancy Kvamme

In the December 2012 issue of Money magazine there is an article title ” 35 Money Leaks and How to Plug Them”.

Even if you follow a budget there may be ways that you are spending more money than you need to be spending.

They break it into three differnet categories.

You Set it and Forgot it.
There may be some expenses that you have set up to be automatically deducted from your account. There may be membership fees, storage unit fees, and subscriptions that you set up and may not use anymore but are still be charged for them.

You Overlook Cheaper Options
Instead of purchasing items that you will only use once or twice consider borrowing or renting instead of purchasing the item.

Consider if there are lower priced plans for cellphones, internet service and other services. Many people are dropping their land lines since they can get by with just their cell phones.

You Just Don’t Get Around to It
See if you could pay less for home insurance. Redeem all of the loyalty rewards, points and miles you have racked up. YOu may use you credit cards and other cards to get the rewards. But they are worthless if you don’t redeem them.

The artlce ends with ways to stop spending leaks when you are shopping.

It may be convenient to have your bills automatically withdrawn from your account on a certain date, but it is still important to look at your statements to keep an eye on you spending.

Nancy Kvamme

There has been a reduced Social Security payroll tax rate for the past 2 years. It was reduced from 6.2% to 4.2%. At this time it is scheduled to revert back to 6.2% January 1, 2013, unless Congress decides not to let the payroll tax holiday expire at the end of 2012.

It may not seem like a big deal, but if you are living close to paycheck to paycheck any dollar can make a difference.

With the tax rate increase, someone making $50,000 a year would pay an extra $1,000 in taxes in 2013, reducing the monthly take-home pay by $83.33. If you have stretched yourself thin with holiday bills, this reduction of your pay will be even more painful.

Here is a link to a calculator to figure how it will affect your paycheck.

There was an article on with more information on the tax increase.

Nancy Kvamme
Nancy Kvamme