Category Archives: Personal Finance

Be Wary of Convenience! (The ATM bomb)

I just saw on a CNN news ticker that some bank ATMS (ticker didn’t specify) are going to begin offering $1.00 and $5.00 withdrawal options.

At first glance, you may think “it is about darn time!”  Sometimes you just don’t need $20.  I can even see the benefit from a safety issue – less money withdrawn, less of a target.  Finally, you may not have $20.00 in the bank, but are in desperate need of cash –in-hand for a myriad of reasons.   All of these rationales and many others are logical. But BE WARY OF CONVENIENCE!

An article on referenced the total amount Banks made in 2010 from ATM Fees. The results:  $7 Billion! (source:

Side note: Interestingly enough, only 9% of the 1,000+ respondents knew that figure as well.

In August of 2012 CNN Money released an article that stated: “The fee banks charge non-customers for using their ATMS had edged up from $2.37 to $2.40, while the fee banks charge their customers for using out-of-network ATMs has climbed from $1.10 to $1.28.” (source:

So what does this mean to you, the prudent fee-adverse consumer?

ATMS allow withdrawals in $20.00 increments & say charge a $2.50 fee to withdraw money from them if you are using a competitors ATM.  Let’s do the math:

Current Options*

  • $20.00 Withdrawal + $2.50 Fee = $22.50, that’s a 12.5% (INSTANT) interest charge to withdraw YOUR MONEY.
  • 10.00 Withdrawal + $2.50 Fee = $12.50, 25% (INSTANT) interest charge to withdraw YOUR MONEY.

New Options*

  • $5.00 Withdrawal + $2.50 Fee – $7.50, 50% (INSTANT) interest charge to withdraw YOUR MONEY
  • (I don’t think I need to calculate the interest on a $1.00 – You get the point)

More Comparisons v. $5.00 Withdrawal Fee (50%)

I listed all of these examples in order to make one point: Use the ATM, BUT use it wisely!

You may be paying out in interest more than what financial/investment accounts are earning on an annual basis!!!

Here are some tips to keep a little more dough in your pocket:

  1. Withdraw a larger amount.  (in the case you NEED to use an ATM)
  2. Plan ahead. If you may need cash in hand in smaller increments, go to your bank for a withdrawal at the window.
  3. Find a bank that does not charge an ATM fee for using out-of –network ATMs and reimburses you the “service fee” charged by competitor ATMS.

Happy Banking!!


*Banks do not charge “interest” to withdraw your money. They charge a flat fee that can be up to $5.00 or more depending on the Bank.  I converted the fee to a percentage to make it easier to compare Apples-to-Apples (and hopefully make a bigger impression).

A Vision Worth Planning For: Live at Water-Front Property in Belize For Under $1500 a Month

$1500 dollars a month can get you a maid, gardener,  and water-front property in a Santa Fe adobe-style home with gardens all around in the beautiful country of Belize.

Something worth planning for

Here is a simple monthly budget for a couple living an expatriate life in Belize:

  • Rent: $300
  • Utilities, telephone, and Internet: $500 (Your biggest expense in this country.)
  • Groceries: $150
  • Health insurance: $50
  • Entertainment: $100
  • Car expenses: $300

Understanding Personal Finance and how to effectively manage your finances at home is crucial to not only improving your present livelihood, but can also allow you to plan for a comfortable lifestyle after you retire – Be that at 40 or 65 years old!

Read more about the Belize Life Style Here

Better Financial Habits, Better Financial Results:How to Improve Your FICO Score | Personal Finance

How do you improve your FICO credit score?

So first we covered, What is your FICO score? Part 2 of this FICO series, I will share how to improve your FICO score.

I have found that the way to improve your credit score is pretty consistent. This is a good thing in my opinion.  The reason being, there is some what of a set standard on how to do it.  You won’t be taking a shot in the dark and, in addition, you will be utilizing a type of “shared” opinion and/or solution from financial professionals.  But just like in health care, there is a pro-active and reactive approach.  This post will cover both.  I will share the most repetitive answers I saw, but also share certain lifestyle changes that will help support and promote your new ambition towards a better FICO score.

Top 5 Ways of Improving Your FICO:

  1. “Think of credit as a privilege to be used sparingly.” — THIS IS HUGE! Sparingly DOES NOT mean not at all. (See Improvement #3)
  2. Pay on your bills! — You have to cover your expenses and them some in order to begin paying off your debts as well.
  3. You must use credit to improve credit — switching to a cash only lifestyle is pragmatic, but not financially conscientious.
  4. Pay your credit balances on-time. — Myth: keeping a balance on my credit card improves my score.  Truth: Using your credit improves your score, paying off your balances immediately, improves it even more.  You DON’T have to pay a lick of interest if you pay your balances off.
  5. Have patience — you may see your credit improve if you being paying off large chunks of your debt.  But if you have accumulated many negative marks on your accounts, your score will improve as time passes or those marks drop off your credit report completely.


So imagine, you wake up in the morning, run 5 miles, do push-ups and stretch. Then, you cook a breakfast with: eggs, bacon, toast, cereal, pancakes (with powdered sugar and butter), syrup, cheese, etc. etc. The run was made POINTLESS!

You may be asking yourself, what is my point? Simple, you may be trimming down your debt and credit balances, but if you are out accumulating more debt and adding to your balance each month, what’s the point! Habits take time to build, but they also take time to break.  I don’t want to get into the psychology of it, but in order to improve your credit score, you must also change your life stlye and spending habits.  BECAUSE THAT IS WHAT GOT YOU THERE IN THE FIRST PLACE!

I read this great article on Yahoo! about a couple who were able to reduce their debt by $30k dollars within 3 years, here are the highlights:

  • They were inspired by books and blog entries that they read about living simply.
  • They begin to reduce their possessions to under 100 items. Idea came from a blog post the couple read.
  • After 3 years, they have reduced their $30k debt and are now living Debt Free
  • Life improvements:
    • Debt Free
    • Money to Travel
    • Able to Contribute to Education Funds for Family
    • Involved in Volunteer Work

You goals in life may be different, or more grandiose, but do not let your fiscally waning life style keep you from them.


Additional Tips

  • Know your score! — If you don’t manage it, you can’t measure it.  Go to to get a free credit report.
  • Use an older credit card! — history is a factor when evaluating your FICO score.  An older card has an older credit history. Best way is to use it once a month or so and pay off the balance immediately, in order to keep it active.
  • Good Will Adjustments! — If you have been on top of your game, and slipped at one moment and missed a payment, you may be able to get a lender to agree to erase that late payment.


If you need more information or are inspired to research the FICO score a bit more, I have listed my references below.


Your FICO Score: What It Is and How It Is Calculated | Personal Finance

The Fair Isaac Corporation Score a.k.a.


Who is the Fair Isaac Corporation?  That is a good question to know the answer to because they created the numeric system that a majority of lenders use when deciding to extend you credit or not.  They are the masterminds behind the FICO score.

Now that you know who created it — You need to know What it is, How it is measured, and Where improvements have been made in calculating your FICO score.  This is step one in improving your credit as a part of getting in control of your personal finances.

What is the FICO Score?

FICO stands for Fair Isaac Corporation.  They are the corporation that created the standard for credit scores that are used by almost all lenders.  The Fair Issac Corporation has been in business since the 1950s and actually began building the FICO score around the mid 1980s.

In simple, your FICO score is a number assigned to you after reviewing your credit report. It represents your potential credit risk.   It ranges from 300, being the lowest score, to 850, being the highest.

Your FICO is a tool of measurement not only when applying for credit cards or major loans like mortgages, but it can also be used by an employer to determine your potential as a new employee.  So monitoring your credit score is doubly important.

How is your FICO Calculated?

  • 35% Punctuality – Are you paying your bills on time?
  • 30% Debt vs. Total Available Credit –  Amount of outstanding debt

ex:If you have 3 credit cards with $1,000 each on them.  2 of your cards are maxed out (i.e. no credit available) and one has a balance of $500 dollars. That means you have $2500 in debt of a $3000 Total Available Credit.  You have spent about 83% of your available credit. Not good.

  • 15% Length of payment history – How long have you been using credit?
  • 10% Installment Accounts vs. Revolving Accounts – How many & what types of credit accounts do you have?
  • 10% Number of Credit Checks, Credit currently applied for – Have you applied for new credit?

How the FICO Formula Improved

Sometimes the most responsible borrower may slip up and miss a payment on a utility bill after moving and it went into collections or maybe there is an old library fine or parking ticket sitting in collections that has haunted you since high school?  These collections could be appearing on your credit history and negatively affecting your FICO score.

The newest version of FICO, the ‘FICO 08’ addresses these minor delinquencies  and are now overlooked when calculating your creditworthiness.  Under the new model:

  • Small missed payments with original amounts of $100 or less will no longer damage your score.
  • You are less likely to be penalized for any single missed payment if it occurred 2 or more years ago AND if your credit history is clean.
  • BUT if you have a pattern of habitually paying your accounts late, your chances increase of being penalized for that.



The only authorized online source for a free credit report:


Additional Facts

  • Average credit score in the United States is around 680.
  • If your credit usage is high, it will more than likely hurt your credit score with FICO 08 (Remember Debt vs. Total Available Credit?)
  • Getting close to your credit limits, EVEN IF YOU PAY ON-TIME, hurts your FICO score in some way.


If you need more information or are inspired to research the FICO score a bit more, I have listed my references below.


Fico Scores, Credit Cards, and Online Banking: what finance class never taught you.

  • Do you know how your FICO score is calculate?
  • Did you know that Credit Card Companies cannot raise your APR within the first year?
  • Do you know there is only ONE government backed website that allows you to check your credit score annually, FOR FREE?  (Like really free. Not sign-up for this program and then it’s free)

I didn’t know the specific answers to these questions until recently and there are a number of policies, processes, and formulas that I wish I had educated myself on, or been taught while in high school or during undergrad.  For example, a financial adviser informed me recently that:

  • If your balance is 50% above your credit limit, it can adversely affect your credit.
  • So as a benchmark, it is best to not go above 30% of your credit limit.
  • I thought you just had to pay your bills on time and never go over your credit limit.  (sneaky credit agencies)

Due to my education in finance — I can read a balance sheet & income statement, recite ratios that determine if a company is leveraged, understand cash flow, and depreciate capital assets (MACRS or Straight Line). Anything you need financially to operate a business, both digital and brick and mortar.

What my institutions of education failed to teach me were the rules that govern personal finance. I had to self educate myself on that.   So if I had to educate myself, then how many other people are out there financially burying themselves (according to most news sources, A LOT)?

Over the next couple of months, I’ll share with you some finance issues and topics that effect your every day life and mines as well*. I’ll simplify and cover topics like:

  • What is your FICO (Credit) Score and how do credit bureaus calculate it?
  • New Credit Card Laws
  • Cautionary tales with Online Banking
  • How to build your credit WHILE IN SCHOOL
  • and more!

If you choose to pay attention to the rules of personal finance or not, you still exist in its world and follows its rules.  But if you take the time to understand the rules, it’ll make budgeting, planning, accounting, and improving your personal finances that much easier.

*I am no expert nor am I certified, so I will not be giving out investment advice or suggest any particular bank or recommend one particular investment vehicle over another.  This is strictly for educational purposes. My hope is to inspire an exchange of ideas and provide a great resource of facts that will help improve management of personal finance.