Comments on: Jonathan Clements: Nickel-and-Diming Your Way to Riches

By: WearyTraveler

WearyTraveler — Sat, 24 Mar 2007 04:11:42 +0000

I set up numerous ING subaccounts. Now I have bi-monthly payments automatically transferred from my checking account into these subaccounts.
For example, I have an $500 yearly HOA (which I hate). Rather than try to pay all $500 from a single paycheck, I have $20 transferred into the HOA subaccount every payday. Over the year, I get great interest, and I’m basically spreading the yearly payment out over the entire year. I do the same with about 10 other yearly bills, from income tax to auto and homeowner’s insurance.
It’s automated and works great.

By: Robby

Robby — Fri, 23 Mar 2007 15:35:18 +0000

I do something like this as well…it helps me budget my money. I deposit all but $200 of every paycheck into ING. The $200 in my checking account forces me to budget my money wisely (if I need more money, I always have the credit card). At the end of the month, I pull out however much I need to pay all the bills. It’s great cause I get the forced budgeting and interest that I would not normally get.

By: tinyhands

tinyhands — Thu, 22 Mar 2007 16:48:32 +0000

Ok, this may be good CASH management, but not necessarily good PORTFOLIO management. Everyone’s circumstances are different, but a good rule of thumb is that, beyond emergency funds, having more than 10% of your portfolio in cash is inefficient.

My accounts are set up such that I could easily make these transfers worth my time (1 minute). But don’t forget that taxes take a bite out of interest earned.

By: Wayne

Wayne — Thu, 22 Mar 2007 13:34:08 +0000

In this day of identity theft, one should check his accounts regularly. It probably adds only 2 minutes to make the transfer. It just takes more self discipline than most of us have (myself included). He is spending a few minutes every day looking at his accounts instead of some TV program. And he has financial gain from his effort.

By: plonkee

plonkee — Thu, 22 Mar 2007 12:04:04 +0000

I’m definitely too lazy and undisciplined for this to work for me, I’d just forget to transfer the money in time and pay a ton of interest on my overdraft. I’m just trying to make my money work harder by picking the highest interest current (checking) account and savings account.

By: Gaming The Credit System

Gaming The Credit System — Thu, 22 Mar 2007 03:36:04 +0000

To me, the benefit of earning interest really only happens with (1) compounding over long periods of time and (2) having large amounts of money earning interest. For me, it’s not worth the time and hassle to try to get the “float” between my paycheck and when the credit cards (paid in full every month) are due. I transfer money to my savings account on a semi-regular basis, and that’s good enough for me. Even at $85/month I don’t think it’d be worth the hassle.

By: Money Saving Links: 3/22/07 | Online Savings Blog

Money Saving Links: 3/22/07 | Online Savings Blog — Thu, 22 Mar 2007 01:13:55 +0000

[...] Nickel-and-Diming Your Way To Riches, if That's Your Thing – The Wall Street Journal (via AllFinancialMatters) Consider Dan Goldzband, a cost accountant in San Diego. He has his paycheck deposited directly into a high-yield savings account, where the money sits until he transfers it to his checking account to pay bills. His reward: $35 to $85 in interest each month. [...]

By: thefeeonlyplanner

thefeeonlyplanner — Thu, 22 Mar 2007 00:47:11 +0000

There is a fine line between simplicity and making $ sense. The specific example Jonathan mentioned seemed a little too high on the complexity/maintenance side for me. I have been with the same bank down the street for over 20 years now and would not do an online checking account. Having said that, all excess short term cash goes to an ING savings and Citibank esavings account.

I know a friend who has the 0% credit card rate down to a science and makes a lot of money each year doing it. I just could never do that; you need to have an accounting/engineer type mind to stick with all the details and one screw up could set you back where you started or worse!

But I must admit that I do the frequent flyer & hotel guest points thing. I ‘ve been doing it for a while now and have earned an excess of 3 million miles/points and counting which have afforded us to have several great travel experiences. I also just sent my client who has cancer to Hawaii on First Class with his wife, they loved it! I learned lots of what I know in http://www.flyertalk.com and http://www.freefrequentflyermiles.com/index.htm

Almost everything goes on a rewards credit card (and of course you NEVER carry a balance!), paying cash is a no-no!

Some people collect stamps or coins, I like collecting miles and points:-)

I also consult with clients on such matters too, talk about going above and beyond in service:-)

By: samerwriter

samerwriter — Wed, 21 Mar 2007 22:51:59 +0000

In my case, I prefer having a local checking account. Over the last 10 years I’ve had several occasions when I needed personal attention to my checking account.

With an internet bank, you may go back and forth over email for weeks before getting the problem solved (I just dealt with this problem with Ameritrade).

With a local bank, I can go sit in front of a customer service agent, and not leave until the problem is resolved.

Besides, I prefer having my savings separated from my checking. Less incentive to spend the savings that way

By: SG

SG — Wed, 21 Mar 2007 22:29:15 +0000

Why not use a high interest checking account like ING Electric (currently yielding 4% for balance